Up Again Morocco: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

Employers must implement social distancing measures. Social distancing includes the prohibition of any kind of physical contact such as shaking hands, hugs and kisses. In addition, social distancing involves the employer ensuring spacing of 1 metre around each person.

Employers must limit access to communal facilities such as locker rooms and toilets by staggering their access and by communicating the maximum number of people that could be allowed in at the same time. If needed, employers must replace benches with chairs to facilitate 1 m social distancing.

Regarding canteens, employers should encourage employees to bring their own prepared food. Employers must prohibit temporarily the use of coffee machines, drinks dispensers, microwaves and shared refrigerators.

Employers must temporarily close rest spaces, prayer rooms and nursing rooms.

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

The prevention measures the employer must take to ensure a safe workplace are as follows:

  • Clean and disinfect all premises before returning to work with products suggested by the Health Ministry.
  • Clean and disinfect regularly all surfaces touched regularly, such as door handles, light switches, elevator knobs, and handrails.
  • Disinfect and clean regularly surfaces and objects touched several times a day, such as photocopiers, printers, and coffee machines.
  • Disinfect common areas, such as canteens, food areas, meeting spaces and locker rooms.
  • Ventilate the premises several times a day through traditional means and avoid using air conditioning;
  • Prohibit the use of individual fans, to prevent propagation of the virus.
  • Use step-pedal trash cans with a regular garbage collection.

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to the use or re-use and decontamination of premises; care, cleaning and maintenance of the exclusive and common areas; reporting requirements and/or measures in case of identified infections; health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing. remodulation of fire prevention strategies (entrance/exit routes)? Is any distinction made between asset classes?

Yes – see questions 1 and 2 above.

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

As of today, there is no law in force suspending rent. The Moroccan economic watch committee (comité de veille économique) implemented measures in favour of small and medium-sized enterprises to deal with this crisis and enable them to fulfil their commitment.

One measure is the new exceptional Damane Oxygen cash credit guarantee mechanism with the Caisse Centrale de Garantie for companies affected by the COVID-19 crisis.

Where the lease includes a termination clause, the lessor may, in the event of non-payment of three monthly instalments by the lessee and after notification by a bailiff of a formal notice that has remained without effect for 15 days, refer the matter to the summary proceedings judge (juge des référés) to record the termination of the lease and order the return of the leased premises. However, in view of the current closure of the courts, it would be impossible at present for lessors to refer the matter to the competent judge.

To avoid overburdening the Moroccan courts when the crisis is over, a Moroccan political party, the Socialist Union of Popular Forces (l'union socialiste des forces populaires or USFP), has submitted to the government a bill amending Law No. 49-16 on leases of buildings or premises leased for commercial, industrial or craft use, to introduce an exemption prohibiting the eviction without compensation of tenants in the event of non-payment of rent during the state of health emergency.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

No.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

The Moroccan government has not taken any specific measures in relation to the private real estate sector to frame the obligations of its actors during the state of health emergency.

Consequently, the classic provisions of the law allowing a contracting party to suspend the execution of its contractual services or to rebalance the content of the contract in these circumstances should be used:

Force majeure

The concept of force majeure is defined in article 269 of the Dahir forming the Code of Obligations and Contracts (the D.O.C).

The Court of Cassation has affirmed that to constitute a case of force majeure, an event must be essentially unforeseeable and irresistible.

These characteristics appear to be met in that the current health crisis and the measures taken to deal with it are beyond the control of the debtor of an obligation who could not have foreseen such an event at the time of the conclusion of the contract. The classification of an event as force majeure is assessed by the merits judges on a sovereign basis.

Thus, a party to a contract might be tempted to invoke the current crisis or the governmental measures taken in this regard as constituting a case of force majeure, and request the suspension of the performance of the contract in the event of temporary impediment or even automatic termination of the contract in the event of definitive impediment.

However, article 268 of the D.O.C. seems to limit the theory of force majeure to the non-application of damages only. In any event, the defaulting party has to prove the existence of force majeure to be released from liability.

Generally speaking, government measures to fight against COVID-19 would tend to result in a temporary impediment that could justify only a suspension of performance of the obligation in question, and not the termination of the contract.

However, each case must be analysed on its own merits, taking account of the provisions in the contract in question.

Plea of non-performance

The concept of the plea of non-performance (exception d’inexécution) is set out in article 235 of the D.O.C. According to this text, the debtor of an obligation could decide to suspend performance of the contract if the other party does not perform its own obligations, subject to compliance with the conditions of formal notice.

7. Are there any credit facilities in place to mitigate loss of income for landlords?

Yes - the new exceptional Damane Oxygen cash credit guarantee mechanism with the Caisse Centrale de Garantie as described in question 4 above.

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

Yes - a system of deferring the maturities on housing and consumer loans until the end of June 2020 for customers who suffered a loss of income during the COVID-19 crisis.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

Yes.

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

Electronic signature

Since 2007, electronic signatures and certification are possible for private deeds. Barid Al-Maghrib (Moroccan Post) is the only entity approved by the state to issue electronic certificates.

Nevertheless, it seems that for acts that need to be legalised, a visit to the competent administration is always necessary. Likewise, the option of the electronic signature does not seem to be possible with regard to notarial deeds.

Relationship with administrations

With regard to the granting of authorisations, while public administrations remained open to the public during the period of the public health emergency, local authorities have set up a platform to dematerialise the procedures for granting town-planning authorisations and economic authorisations.

In a circular issued on April 1, 2020 by the Minister of the Economy and Finance, all public administrations were asked to adopt digital solutions to avoid the need for Moroccans to travel. For example, the Municipality of Casablanca has launched a digital office.

Conditions precedent

With regard to the unfulfilled conditions precedent provided for in the terms of promises and contracts, the automatic postponement of the deadline for the fulfilment of these conditions precedent does not seem to be possible at this stage.

This would need to be examined on a case-by-case basis depending on the nature of the condition precedent to determine whether its fulfilment within the prescribed time limit was made impossible by the COVID-19 crisis and the government measures taken in this regard.

In general, it will be in the interest of the parties to agree on an amicable extension of the deadlines for the fulfilment of the conditions precedent or the non-fulfilment of the resolutory conditions.

11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

Public contracts

The Ministry of the Economy and Finance published a press release dated 14 April 2020. Under this, the impact of the declared public health emergency and the measures to confine people on contract execution times would be considered to be beyond the control of the companies holding public contracts, thus falling within the scope of cases of force majeure.

Private contracts

No specific measure has been enacted for the private sector. Though only public contracts are directly concerned by the press release mentioned above, private builders will tend to avail themselves of it in the execution of private contracts, because building sites are not expressly covered by the closure obligations applicable to all public places deemed nonessential.

Indeed, many companies have had to close down building sites, particularly because of the ban on any meeting, encounter or activity involving more than 50 people in a closed or open environment.

Also, the practical difficulty for construction workers to ensure social distancing and preventive measures imposed by the authorities against COVID-19, combined with the criminal liability of the project owner for compliance with safety measures, make it necessary to analyse the situation site by site and to take into account the provisions of the contract (and/or before completion in the case of a construction commitment made to a tenant), as well as to negotiate amicably.

However, force majeure will be difficult to demonstrate regarding obligations of an intellectual nature in development contracts and in works contracts, in particular because of electronic working, which makes it possible to ensure continuity in the performance of this type of service.

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

Sales before completion (ventes en l'état futur d'achèvement), leases before completion (baux en l'état futur d'achèvement), real estate development contracts (contrats de promotion immobilière), and works contracts generally provide for the obligation to complete the work within a certain period of time, with penalties to be paid in the event of delay, unless the delay is due to legitimate reasons (i.e. events that affected or halted the work).

If provided for specifically in the agreement, force majeure could prevent the application of penalties for delay and the contractor's liability for delay or non-performance.

The level of precision and specificity of the clause on legitimate causes of delay will need to be assessed on a case-by-case basis, which in practice varies from a simple reference to the legal provisions on force majeure to a reference to an epidemic or pandemic.

Finally, under the provisions of article 264 of the Dahir forming the Code of Obligations and Contracts, which are of public policy, courts would have the option of reclassifying to requalify the clause on penalties for delay as a penalty clause. In this case, courts could either increase or reduce the amount of the delay penalties provided for contractually.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

Article 6 of Decree-Law No. 292-20-2 of 23 March 2020 provides that all time limits prescribed by the laws or regulations in force are suspended during the period of the declared public health emergency, and their calculation will resume on the date following that of the lifting of the public health emergency.

The suspension provided for by the Decree applies to the duration of validity of administrative authorisations regarding development or construction of real estate assets.

However, it is advisable to remain prudent regarding the interpretation of this text, which has a very general scope and which may need to be taken in conjunction with other standards or the possibility of using digital solutions implemented in Morocco a few years ago and reinforced in the context of the current crisis.

Litigation and Regulation

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

Though such disclaimers could be useful, and may be taken into account by courts in the event of litigation, they will not, in most cases, discharge the business from its liability (in particular, regarding physical injuries). Disclaimers should specify the risks incurred by visitors or others.