Commercial Leases in Morocco: Your Rights as a Business Tenant (Law 49-16)

For a trader, the premises are often the most valuable asset: they hold the customers, the location and the reputation. For the owner, they are an investment that must produce income and stay under control. Since 2016, Law 49-16 has governed leases of premises used for commercial, industrial or craft activities in Morocco. It clarified many rules, yet many leases signed in Agadir, Inezgane or Ait Melloul still ignore its requirements. Here are the essentials, for tenants and landlords alike.

A written lease and an inventory of condition

The law requires a commercial lease to be in writing, with a certain date. It is strongly recommended to attach an inventory of condition signed by both parties, which will serve as the reference at the end of the lease. An oral lease or a mere rent receipt creates legal uncertainty for both sides: it makes the agreed terms harder to prove and may deprive the tenant of certain protections.

The lease should at least specify the premises, the permitted activity, the rent, the payment date, how charges and works are allocated and what happens to any key money paid.

Key money: prove it to protect it

Paying key money (known locally as “halawa” or “the key”) is common practice. The law now takes it into account, provided it is recorded in writing. Key money paid in cash without any trace is very hard to rely on in a dispute. If you pay it, have it stated in the lease or in a separate document.

The right to renewal: the core of the tenant’s protection

A tenant who actually operates their business in the premises for the minimum period set by law, or who has paid key money, enjoys a right to renewal of the lease. In practice, the owner cannot take the premises back at will: if they refuse renewal without legitimate grounds, they must pay the tenant eviction compensation covering the loss suffered.

This compensation includes in particular the value of the business, assessed notably on the basis of the tenant’s tax returns, as well as moving and relocation costs. Hence an important tip for traders: accurate, regular tax returns also protect the value of your business in the event of eviction.

Eviction without compensation or under special conditions

The law provides for situations in which the landlord can recover the premises without compensation, or under a specific regime:

• failure to pay rent despite a formal notice that went unanswered within the legal time limit;
• alterations to the premises or a change of activity without the landlord’s consent;
• premises in danger of collapse;
• recovery for demolition and reconstruction, which gives the tenant specific rights (provisional compensation, right to return to the new building).

Each ground follows a precise procedure. A badly drafted or improperly served notice can defeat the landlord’s claim; conversely, a tenant who lets the cure period lapse risks losing their business.

Rent reviews

Rent can be reviewed, but within a legal framework: in principle no more than once every three years, with a capped rate of increase (10% for commercial, industrial or craft premises). The court can be asked to decide in case of disagreement. A sudden increase imposed without respecting these rules can be challenged.

Assigning the lease and changing the activity

The lease forms part of the business: the tenant can in principle assign it together with the business, subject to notifying the landlord. Subletting and adding new activities are subject to stricter rules and often require the owner’s consent. Before selling your business or changing what it does, have your lease checked.

Practical tips

For tenants:

1. Never sign without a written lease stating the permitted activity.
2. Have any key money recorded in writing.
3. Pay by bank transfer or against a receipt, and keep everything.
4. Respond immediately to any formal notice.

For landlords:

1. Check the tenant’s solvency and ask for security.
2. Draft a lease that complies with the law: any clause contrary to its mandatory provisions is deemed unwritten.
3. In case of arrears, follow the formal notice procedure scrupulously. For residential lettings, see our article on unpaid rent and eviction.

A lawyer for your commercial leases in Agadir

The office of Maître Said Laachili advises and represents traders and landlords in Agadir, Inezgane and Ait Melloul: drafting leases, negotiating key money, rent reviews, renewals, evictions and compensation, as part of its commercial law and real estate law practice. To secure your business as a whole, also see the guide to setting up an SARL in Agadir and the essential clauses of a commercial contract.

A dispute or a lease to prepare? Book an appointment.