Commercial Building Due Diligence in Uganda

What should I check before buying a commercial building?

An income-producing building is bought for its rent, so you must check the paper behind the rent as carefully as the bricks. Use this table as a starting list and give each line to the right professional.

For a smaller block of flats rather than shops or offices, see Buying a Rental Building. For an overview of shops, offices and warehouses, see Commercial Property in Uganda.

How do I check title and permits?

Start at the registry. The seller must be the registered owner, and any caveat, mortgage or court order must be cleared or made a condition of the sale. Land & Property offers land-title checks at the registry as a paid service, and you should also use your own lawyer.

Then check permits. The Physical Planning Act, 2010, section 33(1), says a person shall not carry out a development within a planning area without development permission from a physical planning committee. Under section 33(3), dealings connected with a development carried out without permission are null and void, and the development shall be discontinued. Section 33(4) requires the developer to restore the land as far as possible. In plain terms, a building put up or extended without permission can put your purchase at risk. Ask for the approved plans and compare them with the building. Any extra floor, extension or change of use needs its own paper.

The National Environment Act, 2019, section 92(5), says commercial buildings, including markets, and hotels shall have specific emergency preparedness and response systems or contingency plans. Ask the seller for the building's plan. If the plot sits near a wetland or lakeshore, read sections 53 and 55 of the same Act and our page on Commercial Land Near Kampala for Development.

Do leases pass to the buyer?

Assume they do until your lawyer tells you otherwise. The Landlord and Tenant Act, 2022 applies to business and residential premises, and it says a tenancy shall not be terminated except in accordance with the Act or the tenancy agreement (section 34). A sale is not listed there as a way to end a tenancy. Where the landlord changes during a tenancy, section 30(6) says the tenant's security deposit shall be transferred and the successor landlord shall notify the tenant. So you inherit the tenant, and you should make sure you receive the deposit.

Read each lease for these points:

• Term and renewal. BusinessTimes Uganda reported typical office leases of three to five years, with landlords applying annual escalations of three to five percent. Check what each lease says and whether it matches the rent roll you were given.
• Rent review. Section 26 requires sixty days' notice of a proposed rent increase, and bars an increase at intervals of less than twelve months. Rent that was raised without notice may be invalid (section 26(5)).
• Writing. A tenancy agreement of twenty-five currency points or more is enforceable by action only if it is in writing or a data message, or if the other side admits it (section 4). Verbal tenants are a risk.
• Sub-letting and assignment. A tenant needs written consent to sublet or assign (sections 31 and 32).

Compare the lease terms with our page on Commercial Lease Terms in Uganda.

How do I check arrears and service charges?

Ask for a ledger for every tenant, covering at least the last twelve months, and match it to bank statements. Under section 29, a landlord whose tenant is in arrears may apply to court to recover the rent, and if the default continues for more than thirty days the landlord may re-enter and take possession in the presence of an area local council official and the police. Do not assume that arrears owed to the seller pass to you. Say in the sale agreement who gets them.

Check service charges too. Section 46 allows a landlord to charge a service fee for extra services, such as security and sanitation, and says it varies according to the relevant costs. Section 28 requires the rent to be reduced in proportion where the landlord stops providing an agreed service. A building with unpaid service charges or unspent service-charge money has a hidden cost. See our guide to service charges in malls and offices.

What about VAT and tax?

Ask the seller whether the building is VAT-registered and whether VAT is charged on the sale and on each lease. PwC's tax summary, current to October 2026, gives the standard VAT rate as 18 percent and the registration threshold as UGX 300 million of annual turnover from 1 July 2026. It lists leases and sales of certain residential property, and unimproved land, as exempt, but it does not say how commercial property is treated, so get a written ruling or advice from the Uganda Revenue Authority or a tax adviser, as of November 2026. The same summary gives stamp duty of 1.5 percent on transfers and lists a 1 percent rate for leases. Ask which applies to your deal.

If you are paying from abroad, read our guide to Source of Funds Checks for Uganda Property before you transfer money.

What should an engineer and a valuer check?

An engineer should inspect the frame, roof, lifts, electrical and water systems, fire exits, drainage and, for older buildings, cracks and damp. Knight Frank Uganda reported in H1 2026 that parking has moved from a preference to a prerequisite for office occupiers, and that well-managed modern assets outperform ageing stock. A building with too little parking or a weak service record can lose tenants.

Use a licensed valuer for the price. Knight Frank reported that the Valuation Act, 2026 came into force in March 2026 and introduced licensing for valuers and national standards.

Finally, test the market. In H1 2026, Knight Frank reported Grade A office rents of US$17 per sq m at 87 percent occupancy and Grade AB at US$14 at 83 percent, and about 65,000 sq m of new office space delivered in 2025. BusinessTimes Uganda reported in February 2025 that more than 100,000 sq m was expected between the first and second halves of 2025 and that vacancy had risen by about one percent compared with the second half of 2023. Business Daily, citing Knight Frank, reported Kampala prime warehouse yields of 13 percent in H1 2025. A yield is annual rent as a share of price, and it is not a promise of what your building will earn.

Once you have the reports, you can browse commercial listings, see Shops and Commercial Buildings for Sale in Kampala, or ask our team on WhatsApp or by email. Our hub for this section is commercial property.

Frequently asked questions

Related guides

• Commercial Property in Uganda: Shops, Offices, Warehouses
• Commercial Lease Terms in Uganda
• Shops and Commercial Buildings for Sale in Kampala
• Commercial Property in Uganda: An Investor's Guide
• Buying a Rental Building: Due Diligence
• Source of Funds Checks for Uganda Property