In an interesting article titled «Property owners on the spot for ripping off tenants on ’caution money’», The New Times raised one of the many problems faced by tenants in Rwanda. From the unilateral termination of the lease agreement to the undue appropriation of the security deposit (caution money) and the unjustified increase in rent, the disregard for the rules is quite astounding. Although tenants are not always the most honest, as mentioned above, most of the time it is the landlords who abuse their «dominant position», generally due to the absence of a lease agreement, or poorly drafted or inadequate lease agreements. The difficulty is exacerbated by the legal loophole regarding the specific rules concerning leases. Indeed, in the entire Rwandan legal arsenal, only Article 231 of the law relating to the civil, commercial, labor and administrative procedure establishes a specific rule for leases, and that is to protect the landlords by granting them the right to seize movable or other property belonging to the tenant who owe rent. Without questioning the fact that a contract is certainly the business of the parties and follows the principle of contractual freedom, it is essential to establish specific rules for leases, both for residential and commercial use, in the common interest of tenants and landlords. In practice, the damage resulting from this legal loophole may be relatively minor for residential leases, but it becomes considerable when it comes to commercial leases, almost bordering on bankruptcy since the commercial lease is crucial for businesses.

What is a commercial lease?
A lease is a contract that generates a personal right, offering the tenant the exclusive and continuous use of a property in exchange for the payment of rent. Like any contract, a lease follows the principle of contractual freedom, which means that everyone is free to contract or not to contract, to choose their contracting partner, and to determine the content and form of the contract within the limits set by the law. Specifically concerning commercial leases, it can be defined as a rental agreement that governs the lease of real estate used for commercial, industrial, artisanal, or any other professional activity. It is a contract concluded between a landlord (usually the property owner) and a tenant, who can be an individual or a legal entity (a company or an association, for example).

What is the purpose of a commercial lease?
Historically, the main purpose of specific rules for commercial leases was to protect business tenants who «had no right to lease renewal and could be evicted at the end of the contract». Yet, rental stability is necessary for the prosperity of a business due to the damage that could result from losing customers following a change of premises. Thus, in France, a law of June 30, 1926, forced landlords to pay eviction compensation if the refusal to renew the lease was not based on a legitimate reason. Since then, legislation has evolved, and there are, for example, specific regulations for commercial leases in France. In OHADA law (Organisation pour l’Harmonisation en Afrique du Droit des Affaires), the Uniform Act on General Commercial Law sets out specific rules for commercial leases in its Book 6, titled «Lease for Professional Use and Business Assets». Unfortunately, as mentioned earlier, there is a legal loophole in Rwanda that benefits those who understand the importance of hiring a competent lawyer to draft contracts (not only the lease contract but generally any contract intended to be signed).

Indeed, as indicated above, the commercial lease is crucial for tenants. It allows the tenant to benefit from various advantages: the right to lease renewal, the payment of eviction compensation in case of non-renewal, and the right to assign the lease. The right to lease renewal means that the landlord can never refuse the renewal of the commercial lease. In fact, no contractual stipulation can defeat the right to renewal. The objective is to provide the tenants with the necessary protection and stability for their commercial activity, which they can then carry out serenely. Thus, the right to renewal has as its corollary the payment of eviction compensation in case of non-renewal. Indeed, if the lease renewal is refused, the landlord is generally required to pay eviction compensation to the tenant. Moreover, the tenant benefits from the right to assign the lease. For example, in OHADA law, Article 118 of the AUDCG states that: «if the tenant assigns the lease and all the elements necessary for the activity in the leased premises, the assignment is binding on the landlord.»

Alongside these specific rules for commercial leases, other rules are common to residential leases, including the obligation for the landlord to provide premises in good condition, ensure the peaceful enjoyment of the premises, and carry out necessary repairs. Without being exhaustive, the rules explained above are sufficient to demonstrate the importance of having a well-drafted lease contract, especially in the absence of a well-defined legal framework for leases.
In a previous legal brief, we had already called for the modification of the current law governing contracts due to its insufficiencies. Therefore, we can already rejoice at the existence of a draft law relating to contractual and non-contractual obligations, which, despite the absence of a specific regime dedicated to commercial leases, devotes its Title VII to rental contracts, including leases in general. We therefore eagerly await the adoption and promulgation of this draft law, which will mark a revolution since the repeal of the civil code.