In Panama, a promise to sell or buy real estate must be in writing and must fix the property, the price and the date or condition for the final contract (Civil Code, art. 1221). If a deposit or señal (arras) was given in the sale contract, art. 1224 lets the buyer walk away by losing it, or the seller by returning it doubled. So how the paper words the deposit decides what you can lose. Read it with your own lawyer before you pay anything.

Checked November 6, 2026 against the Civil Code of Panama (Justia and legal-tools copies), a Supreme Court ruling and a civil court ruling published by ACODECO.

The situation

You have agreed on a price and the seller asks you to sign a promesa de compraventa and pay a deposit. This is the first moment money leaves your hands, and in most purchases it happens before the registry has been checked. The wording of the promise and of the deposit decides what happens if either side changes its mind.

What the Civil Code says

  • Art. 1221, the promise. A promise to sell or buy, with agreement on the thing, the price and the term or condition that fixes when the contract is to be made, gives the other party the right to demand that the promise be fulfilled. For real estate it must be in writing. If it cannot be fulfilled, the general rules on obligations apply.
  • Art. 1221, registration. A promise to sell real estate made by public deed and registered in the Registro Público limits the owner's title: the promisor cannot sell the property while the entry stands, and the article also restricts encumbering it without the other party's consent.
  • Art. 1224, deposit or señal. If arras were given in the sale contract, the contract can be rescinded: the buyer accepts losing them, or the seller returns them doubled.

Several commercial websites split deposits into "confirmatory" and "penitential" types and cite other article numbers. We read art. 1221 and art. 1224 in the Civil Code copies listed in the sources. Have your lawyer confirm the text in force and how it applies to the words of your paper.

What it means for you

  • If the paper says the deposit is the price of walking away (a señal under art. 1224), the buyer's risk is the deposit and the seller's risk is paying it back doubled. Make sure that is what you want.
  • If the paper is a binding promise (art. 1221), the other side can demand that the final deed be signed, not only keep a deposit. Read the deadline and the conditions.
  • Conditions count. In a 2001 ruling the Supreme Court (Sala Civil) held that a condition the parties added to a promise had to be met for the promised contract to be made. A condition you write in your favor, such as an approved mortgage or a clean title certificate, can protect you. One you did not read can work against you.
  • One-sided penalties. In a 2012 ruling published by ACODECO, a civil court declared void a clause that let the seller end the promise and keep every sum paid if the buyer did not hand mortgage documents to the bank within 30 days, noting that no equal penalty applied to the seller. That is one first-instance ruling, not a rule for every paper, but it shows what to look for.

Before you pay a deposit

  1. Get a fresh finca certificate and read the owner, liens and pending entries (how).
  2. If the owner is a company, check who can sign for it (how).
  3. Ask who holds the deposit and when it is released. We found no legal percentage for a deposit; market sources describe around 10% held by a lawyer, notary or trustee, which is custom, not law.
  4. Put your conditions in writing: title, taxes, paz y salvo, financing, and the date of the deed.
  5. Check the broker, if there is one (how).
  6. Have your own lawyer, not the seller's, read the paper (how to check a lawyer).

How Proper looks at this

Proper does not sell real estate or any property product, and today it does not receive payment from the professionals it refers you to; if that changes, we'll tell you before it affects you. If a deposit is about to leave your hands, the Clarity Session helps you work out what the paper has to say and who should read it.

Sources

Checked November 6, 2026.

Please read: this is general information, not legal advice. We read the Civil Code copies and the rulings cited; they may be outdated, and the effect of any paper depends on its exact words. We did not verify deposit percentages or the status of the rulings.