Rental Management in Senegal: Legal Framework and Practices

The Lease-management is a common practice in Senegal, allowing a business owner to entrust the operation of his business to a third party, called a tenant-manager. This mechanism offers flexibility for both the owner and the operator, but it is governed by specific legal provisions. This article explores in detail the legal framework of lease-management in Senegal, its advantages, its obligations, as well as the procedures to follow for its implementation.

What is Lease-Management?

The Lease-management is a contract by which the owner of a business (the lessor) entrusts the operation of the business to another person (the tenant-manager) in return for a fee. The tenant-manager operates the business in his name and on his behalf, thus assuming the risks and profits of the activity.

Legal Framework for Lease Management in Senegal

In Senegal, lease-management is governed by the OHADA Uniform Act on General Commercial Law. Key provisions include:

• Prerequisites : The owner must have operated the business for at least two years before leasing it, unless an exemption is granted by the competent court.
• Advertising : The lease-management contract must be published in a newspaper of legal announcements within 15 days of its signature to inform third parties.
• Matriculation : The tenant-manager must register with the Trade and Personal Property Credit Register (RCCM) as a trader.

Advantages of Lease-Management

Lease-management has several advantages for the parties involved:

• For the owner : It allows you to retain ownership of the business while delegating its operation, which can be useful in the event of absence or inability to manage the business.
• For the tenant-manager : It offers the opportunity to manage a business without having to invest in the purchase of a business, thus facilitating access to entrepreneurship.

Obligations of the Parties

Obligations of the Owner

• Guarantee : The owner must guarantee the tenant-manager the peaceful enjoyment of the business.
• Information : He is required to provide all necessary information on the state of the fund, including any outstanding debts or disputes.

Obligations of the Tenant-Manager

• Exploitation : The tenant-manager must operate the business diligently and in accordance with its purpose.
• Payment : He is required to pay the agreed fee to the owner according to the terms defined in the contract.
• Maintenance : He must maintain the fund in good condition and carry out the necessary repairs to ensure the continuity of the activity.

Procedure for setting up a Lease-Management

1. Drafting the Contract : The parties must draw up a written contract specifying the terms of the lease-management, including the duration, the amount of the fee and the respective obligations.
2. Advertising : The contract must be published in a newspaper of legal announcements to inform third parties of the lease-management of the fund.
3. Matriculation : The tenant-manager must register with the RCCM as an independent trader.

Tax Consequences

The leasing of a business has tax implications for both parties:

• For the owner : Income from lease-management is subject to income tax.
• For the tenant-manager : He is subject to the same tax obligations as any other trader, including the declaration and payment of VAT, as well as corporate tax where applicable.

Termination of the Lease-Management Agreement

The lease-management contract may be terminated in the following cases:

• Term Expiration : At the end of the period defined in the contract.
• Early termination : By mutual agreement of the parties or in the event of a serious breach of contractual obligations.
• Judicial decision : In the event of a dispute, the court may order the termination of the contract.

Points d’Attention

• Debt Solidarity : For a period of six months after the publication of the contract, the owner and the tenant-manager are jointly and severally liable for the debts contracted before the lease-management.
• Non-Competition Clause : It is recommended to include a clause prohibiting the tenant-manager from creating a competing company during and after the term of the contract.

Conclusion

The Lease-management is a flexible legal tool allowing the temporary transfer of the operation of a business in Senegal. However, its implementation requires special attention to the legal provisions in force to protect the interests of both parties. It is therefore advisable to consult a lawyer specializing in business law to accompany the process and ensure compliance with legal obligations.

For more information on business law in Senegal, you can consult our dedicated page: Business Law .

FAQ on Leasing Management in Senegal

1. What are the conditions for renting a business in Senegal?

The owner must have operated the business for at least two years, unless there is a judicial exemption, and the contract must be published in a newspaper of legal announcements.

2. Does the tenant-manager have to register with the RCCM?

Yes, the tenant-manager must register as an independent trader with the Trade and Movable Credit Register.

3. Who is responsible for the debts of the lease-management business?

For the first six months after the contract is published, the landlord and the tenant-manager are jointly and severally liable for previous debts. Subsequently, the tenant-manager assumes the debts related to the day-to-day operation.

4. Can a lease-management contract be terminated before its end?

Yes, early termination is possible by mutual agreement or in the event of a serious breach of contractual obligations, possibly by court decision.

5. What are the tax advantages of lease-management?

The owner receives a royalty subject to income tax, while the tenant-manager benefits from the profits from the operation after taxation according to the applicable tax regime.

In short, rental management is a complex and very formalistic subject in Senegal, and that is why it is important to use a lawyer to handle this situation.

The role of the lawyer in leasing management matters is to advise and assist his client in the negotiations and implementation of a lease management contract. It is important to ensure that the contract complies with local laws and regulations, and that the rights and obligations of both parties are clearly defined.

The lawyer can also help to resolve disputes that may arise between the landlord and the manager, and to defend the interests of his client in court if necessary.