While purchasing a commercial property may be a great option to give your customers an avenue for physical contact, it is not cheap as the growing presence of multinational businesses seems to be encouraging the purchase of commercial spaces, thereby driving up prices.

Nevertheless, investing in a commercial property comes with freedom and flexibility similar to owning your own space. Properties in high traffic areas: Accra, Dzorwulu and East Legon are the most sought after due the busy nature of such committees.  

In addition, renting a commercial space as a business owner enhances your reputation and the perception of the business. If you are a business owner looking to rent a commercial space, the following tips may be of value.

15% GOVERNMENT TAX

There are two main types of rent taxes in Ghana: 8% for residential premises and 15% for non-residential premises. Commercial properties fall under the non-residential category. As such, it is a requirement to pay 15% withholding tax to the government.

This tax applies to property owners who lease their properties to companies. This is to ensure that these buildings and properties are adequately taxed according to what they are used for, thus, the owners of these commercial properties are to pay a 15% statutory tax to the government.

Always demand that this tax (by the owner) is paid to avoid future problems and penalties from the Ghana Revenue Authority (GRA) as not ensuring all taxes are paid which includes the building or space in which your company operates is seen as a criminal offence.

Always ensure that your landlord is aware of all government policies and taxes before you go ahead to rent the space. Failure to pay this tax draws penalty payments and, thus, could potentially affect more of your company than the landlord. As an entrepreneur looking to rent a property, you should beware of property owners who refuse to pay these taxes as it can cost your company.

FREEHOLD LANDLORD AND LEASEHOLD LANDLORD

Let’s dive into the freehold and leasehold contract. As you may already know from your experience with tenancy agreements in Ghana, the majority of lands are leasehold properties.

A leasehold property entails that an owner of a property grants ownership rights to another person over the land/property for an agreed upon period of time after which the ownership of the property reverts to the original owner. Whereas in the case of a freehold property, the company or person who owns the property owns it in perpetuity.

Now food for thought, if you have a long term contract with a leasehold landlord a few months or days before the lease with the freeholder ends, (contract between the freeholder and the leaseholder) what happens to the contract you, as an entrepreneur, have with the leasehold landlord?

NB: It’s always important to know the leaseholder’s contract with a freeholder and if it’s in line with what you want for business at that moment before you go ahead to seal the deal and rent a property! It is not out of place to ask to see the headlease.

PROPERTY MAINTENANCE

Similar to residential properties, the landlord is required to be and is responsible for only the exterior of the building. That is, the garden, exterior painting, handiwork etc., whereas, with the interior, except for where it involves permanent fixtures to the property, the tenant is responsible for what happens in there.

Therefore, as an entrepreneur renting a commercial property, you are within your rights to demand some work done on the exterior if it does not meet your requirements prior to concluding the rent agreement. Doing this successfully could boost your business since a good reputation and a great front view to welcome clients could not hurt at all.

Ensure that your workers do not mishandle anything that has to do with the interior as the cost of fixing that is likely to come back to sit as a weight on your company’s finances.

Many businesses spend so much money fixing things. The landlord is not supposed to fix your broken office tap, water closet and the like, so use them with care and save all that cost of repairing or replacing.

If you are new to renting a commercial space, have a lawyer go through the tenancy agreement in order to make sure there are no surprises. A tenancy agreement is a necessity for every landlord who seeks to rent his/her property and equally a must for the tenant to have a copy. Stay on this page to get familiarised with all the basic requirements for leasing your office space.