A commercial lease can bind an investor longer and more heavily than its company documents. Before signing, the landlord's title, planning use, operating permits, co-ownership rules, works, taxation and exit route should be reviewed. Law No. 49-16 protects business goodwill, but only where its scope and factual conditions are met.
Scope and form of the lease
Law No. 49-16 principally covers premises in which a business is operated and certain expressly listed premises, including some private schools, commercial cooperatives and clinics. Particular contracts and temporary occupations remain outside the regime.
A commercial lease should be written and bear a legally reliable date. A condition report should be prepared when possession is delivered. The contract should identify the title and unit, permitted use, ancillary areas, term, rent, taxes, deposit, works, insurance and notices.
Tenant renewal rights
A tenant generally acquires renewal rights after operating its business from the premises for at least two consecutive years. The period does not apply where payment of key money is evidenced in writing.
Refusal to renew or eviction may require the landlord to compensate the tenant's loss, including goodwill value and relocation costs. Compensation may be excluded or adjusted for statutory reasons such as serious breach, unsafe condition, rebuilding or permitted repossession. The stated ground, notices and challenge deadlines are crucial.
Tenant rights and duties
- Receive premises suitable for the agreed use and enjoy them peacefully.
- Operate the authorised activity, pay rent and agreed charges and preserve the unit.
- Require landlord repairs and promptly report defects and incidents.
- Carry out alterations only under the lease, permits and co-ownership approvals.
- Claim renewal and, where applicable, statutory eviction compensation.
- Transfer lease rights with the business under the statutory notice process.
The tenant should not unilaterally change use, alter structural elements or occupy common areas. Rent unpaid for at least three months after a formal demand remains unanswered within the statutory period can expose the tenant to termination and loss of eviction compensation.
Landlord rights and duties
- Collect rent, clearly recoverable charges and proportionate security.
- Enforce permitted use, co-ownership rules and alteration approvals.
- Pursue payment, termination or eviction through the proper procedure.
- Deliver the premises, ensure peaceful enjoyment and perform landlord repairs.
- Evidence authority to let and disclose constraints materially affecting operation.
- Respect renewal rights or pay compensation unless a statutory exception is proven.
Rent review and security
Initial rent is negotiated freely. Law No. 07-03 regulates later review: generally no review before three years, and commercial, industrial or professional rent increases are capped at 10%, subject to the applicable procedure. Indexation clauses must be reconciled with mandatory rules.
The lease should state whether rent is exclusive or inclusive of tax and distinguish a refundable security deposit from non-refundable key money, which has different legal and tax consequences.
Rent taxation: what the tenant must do
The tenant must identify the landlord's tax status and determine whether it is legally required to collect tax at source. Withholding is not a negotiated rent discount: the tenant pays the net amount to the landlord, remits the tax by the applicable deadline and issues the withholding certificate.
| Practical situation | Tenant treatment | Key point |
|---|---|---|
| A company rents from an individual receiving private property income | It withholds from gross rent at 10% where annual gross taxable property income is below MAD 120,000 and 15% where it reaches or exceeds MAD 120,000. | The company must obtain the information needed to select the rate and review exemptions. It should not automatically apply 15% without testing the threshold. |
| The individual landlord elects for the final-rate regime | The relevant property income may be taxed at the 20% final rate under the landlord's valid tax election. | The tenant does not make the election and should obtain the appropriate tax evidence before changing its withholding treatment. |
| A company with turnover excluding VAT of at least MAD 500 million rents from a company subject to corporate tax | From 1 July 2026, the corporate tenant withholds 5% of gross rent excluding VAT, remits it and provides the landlord with a certificate. | The threshold tests the paying tenant's turnover for the last closed financial year. The corporate landlord credits the withholding against its corporate tax. |
| A company rents from an individual under the RNR or RNS regime | Professional rental proceeds are subject to 5% withholding on the gross amount excluding VAT under the 2026 rules. | This business-income regime must not be confused with the 10%, 15% or 20% private-property-income rates. |
A bare property lease is not taxed in the same way as an equipped business establishment. VAT depends on the precise operation, equipment and services and landlord status. The lease should use “exclusive of VAT” where tax may apply without attempting to override the Tax Code.
Municipal services tax
Municipal services tax is assessed annually on qualifying property, buildings and equipment by reference to rental value. Standard rates notably include 10.5% in urban municipalities, delimited centres and equivalent areas, and 6.5% in certain peripheral areas.
The statutory taxpayer is the owner, usufructuary or relevant right holder. A lease may require reimbursement by the tenant, but that does not change liability toward the authority. The assessment should be produced and an allocation formula included where the unit forms only part of the property.
Co-owned buildings: Law No. 18-00 also applies
Before signing, the tenant should review the co-ownership regulations, division statement, recent meeting minutes, charge position and rules on signage, hours, deliveries, extraction, air conditioning, generators and common areas.
The co-owners' association claims common charges from the owner. The lease may allocate certain costs economically to the tenant, but it does not bind the association. The parties should distinguish operating services from structural repairs, major replacements, pre-existing works, reserve funds and owner arrears.
Landlord consent never replaces a co-owners' resolution or public permit where required. A lawful activity may still conflict with the building's designated use or regulations.
Works, compliance and handback
The lease should allocate initial works, repairs, regulatory upgrades and replacements and state who owns alterations and whether reinstatement is required. Commitment should be conditional on necessary planning, operating, fire, signage and co-ownership approvals.
A joint condition report with photographs and meter readings protects both parties. On exit, the tenant is responsible for attributable damage, not ordinary wear or repairs allocated to the landlord.
Termination, transfer and exit
Termination should not be implemented through informal repossession or utility cut-off. Demands, notices, cure periods and court procedures must fit the breach. Resolutory clauses and guarantees must be reviewed against Law No. 49-16.
A transfer of the business may carry the lease rights under the law, subject to notification. Subletting must be checked against contractual restrictions and statutory notice and rent-adjustment rules.
Pre-signing checklist
- Verify title, landlord identity and authority.
- Confirm use against planning, permits and co-ownership regulations.
- Attach an accurate condition report, areas, parking and common rights.
- Create an unambiguous rent/VAT/withholding/tax/charge/work schedule.
- Use conditions precedent for permits and fit-out funding.
- Model renewal, review, transfer, subletting and exit.
- Allocate insurance, incidents and business interruption.
- Secure registered office use, signage, connections and mail access.
Frequently asked questions
Can the landlord freely refuse renewal?
A refusal is possible, but eviction compensation is generally due once renewal rights exist unless a statutory ground removes it.
Can the tenant simply deduct 15% from every rent payment?
No. It must classify the landlord, test the MAD 120,000 threshold, check for a 20% final-rate election or the 5% professional rate, and then file and remit the withholding correctly.
Who pays municipal services tax?
The statutory taxpayer is generally the owner or legal right holder. The lease may require tenant reimbursement if the basis and evidence are clearly defined.
Is landlord consent enough for signage or extraction?
No. Co-ownership approval and public permits may also be required.
Official sources: Law No. 49-16 — commercial leases · Law No. 18-00 — co-ownership · 2026 General Tax Code.
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