Overview of retail lease agreements in Morocco

Retail lease agreements are governed by Dahir No. 1-16-99 of July 18, 2016, promulgating Law No. 49-16 on leases of buildings or premises leased for commercial, industrial, or craft use and Dahir No. 1-04-134 of November 30, 2007, promulgating the law n° 07-03 on the revision of the rents amount of the premises for residential use, or premises for professional, commercial, industrial or craft use.

Duration of lease agreements is not legally defined. It is left to the parties’ discretion. In practice, most retail leases are entered into for an initial term of nine years.

The tenant benefits from the right to renew the lease when if he can prove that he has used the premises consecutively for at least two years.

The tenant is exempt from the duration condition if he has paid a sum of money in return for the right to the lease.

Termination by the landlord with reason and eviction period (15 days if non-payment of rent or if the premises are in threat of collapse and 3 months if recovery for personal use, demolition and reconstruction, extension, or elevation, or if breach of contract).

The termination by the tenant is not provided by the law on retail leases. In practice leases agreements provide for such possibility subject to a prior notice to the Landlord. In addition, the tenant could apply to the court for early termination based on persistent breach by the landlord for instance.

The tenant benefits from the right to renew the lease when if he can prove that he has used the premises consecutively for at least two (2) years. The tenant is exempt from the duration condition if he has paid a sum of money in return for the right to the lease.

In case the landlord refuse to renew the lease, he must pay an eviction indemnity to the tenant.

The eviction indemnity corresponds to the prejudice suffered by the tenant as a result of the eviction.  This eviction compensation shall include at least the value of the goodwill estimated on the basis of the Tenant's tax returns for the last four (4) financial years, in addition to the expenses incurred for renovation and restoration work, fitting out, equipment, as well as the elements of the goodwill lost by the Tenant. It also includes moving expenses.

The rent for retail leases is revised by a 10% increase every three (3) years.

However, the parties cannot revise the rent before the expiry of a three-year period.

There are no mandatory provisions for fitting-out work. The matter is broadly left to the discretion of the parties. 

If the lease agreement does not specify the party responsible for the fit-out, it is deemed to be included in the rent.

There are no mandatory provisions on the reinstatement of the premises.

In practice, the reinstatement of the premises is dealt with in the framework of the agreement.

Sub-lease possible unless otherwise stipulated in the lease agreement. 

Transfer of lease allowed notwithstanding any stipulation to the contrary.

The lease agreement continues to be binding and enforceable between the new owner and the tenant in the same rights and obligations provided for in the lease agreement.

The tenant has no right of pre-emption unless specifically agreed in the lease agreement.

There are no mandatory legal provisions regarding the form or duration of a rental guarantee. However, it is usually provided for in retail leases agreement.

The Landlord is responsible for major repairs and maintenance of the premises and for repairing any defects or damage that may affect the Tenant's intended use of the premises, unless otherwise agreed in the lease agreement.

20% VAT if the premises are rent equipped. 

There are no other important legal provisions or practices.