Law N°2021-02 of 01 February 2021 amending and supplementing law N°2018-12 of 02 July 2018 on the legal regime of the lease has brought two new elements to the use of domestic dwellings in the Republic of Benin. These include the lease of property with the option to purchase and the capping of the real estate agent’s commission to a maximum of 50% of the rent paid by the service applicant.

The National Assembly adopted on Thursday 7 January 2021, the law n°2021-02 modifying and completing the law n°2018-12 of 02 July 2018 on the legal regime of lease for domestic use in the Republic of Benin. The text comprises a total of six chapters and 42 articles devoted mainly to the issue of lease contracts. It addresses several points, including the preliminary principles and general rules, the preliminary contract for lease purchase. But also, the lease purchase contract itself, the change of the tenant or the seller and the exercise of the purchase option and the transfer of ownership. There are two new features: the leasing of buildings with an option to purchase and the capping of the real estate agent’s commission at a maximum of 50% of the rent paid.

Leasing a building with the option to buy

In this respect, the law gives the tenant the possibility to buy the residence or building he has rented.  Indeed, this novelty is quite remarkable. For José Didier Tonato, the Minister of Living Environment and Sustainable Development, this bill aims above all to promote the construction of 20,000 social housing units, which will be built in large part by private developers. Hence the need, he stressed, to readjust the old law to facilitate the realization of this project already included in the Government Action Programme (Pag).

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However, temporary accommodation such as hotels, motels, hostels, tourist rooming houses or other similar accommodation is not covered by the law.

The estate agent’s commission at a maximum of 50% of the rent paid.

The law has also reframed the real estate agents commonly known as “agent” with regard to the commission they must receive. Indeed, according to the law, the commission cannot exceed 50% of the monthly rent. When the estate agent manages the rental unit on behalf of the lessor, the commission cannot exceed 10% of the monthly rent. Thus, the law gives credibility to the profession of real estate agent in Benin. Under the terms of the new Article 27, real estate agents may carry out their activities by forming a real estate company in the form of their choice, either as sole partners or as shareholders in a company with other real estate agents or other persons who are not real estate agents.

Nevertheless, Article 29 specifies that the real estate commission is freely fixed between the parties. When the real estate agent only brings the parties together for the conclusion of the lease, this commission is paid by the applicant for the service, who may be the owner of the property or the tenant. A bill that allows Beninese tenants to enjoy good confidence.