In Morocco, the main forms of leases are the following:
- Commercial leases — These are required to run a business in Morocco and are governed by Dahir 1-16-99 dated 18 July 2016, promulgating Law No. 49-16.
- All other leases — Residential leases, professional leases without any commercial purpose, etc. are governed by the Obligations and Contracts Code regulating the general rules of contract law dated 12 August 1913 (as amended from time to time) (except for specific cases).
Generally, lease provisions are not regulated and are freely negotiable. According to Moroccan law, there is no requirement that a lease agreement must be in writing. Therefore, the lease agreement may be verbal.
However, commercial leases are subject to specific regulations that prohibit certain provisions. For instance, the contract cannot remove the tenant's renewal right, the minimum termination notice period is six months and indexation of the rent is capped.
In Morocco, the maximum term of a lease, including renewals, is 99 years. These leases are called emphyteutic leases and they are deemed to be ownership.
Usually, leases are for a five-year or a 10-year term, with an option to extend the term for another five years.
For commercial leases, from the moment the tenant has occupied the premises for more than two years, the tenant is entitled to lease renewal, notwithstanding any agreement to the contrary. The landlord can refuse renewal only in very specific and limited cases. If the landlord refuses to renew outside these cases, compensation is payable to the tenant based on the value of its business.
The landlord may terminate the lease agreement at the end of the period agreed between the parties where the tenant breaches certain terms of the lease, such as unauthorized subletting or alterations.
Where the lease contains a termination clause and the tenant has not paid rent for three months, Law No. 49-16 provides that the landlord is entitled to apply for a judicial termination of the lease. The landlord must serve notice on the tenant, giving it 15 days to settle the outstanding rent, before termination can take place.
This will depend on the agreement of the parties. Rent is usually paid on a quarterly basis for commercial leases and monthly for residential leases, at the beginning of each quarter or month.
Rent is sometimes fixed for the initial term.
However, the landlord or the tenant may request that the rent is fixed at the rental value at the end of each three-year period. This increase should not exceed 8% for residential premises and 10% for other premises (per three-year period). Commercial leases are often subject to indexation but still restricted by the 10% cap.
In general, the landlord is responsible for major repairs (repair and maintenance of the structure of the property, insuring the property, etc.) whereas the tenant is responsible for minor repairs (keeping the property in good order, etc.).
The landlord must ensure the tenant's peaceful enjoyment of the premises, and the tenant must comply with the intended use of the premises.
Tenants are sometimes allowed to assign the lease or sublet the premises but always subject to the landlord's prior consent. The head tenant will remain liable for due performance of the subtenant or assignee.
However, where the tenant wishes to sell the business operating in the premises, the tenant is entitled to assign the lease to the purchaser of its business. Any provision to the contrary is null and void.
If the premises are substantially damaged or destroyed by an act of God, the lease is often terminated, unless the premises can be repaired within a reasonable timeframe (usually less than six months).
If the premises are damaged or destroyed due to causes attributed to the tenant, then the tenant may be liable for repairs or replacement.
Moroccan law does not provide any requirement about insuring the leased premises. However, the landlord often requires that tenants insure the premises against the most common risks.