In terms of top prize for political incompetence in 2011, you’d be hard-pressed to find a better example than the farce that has surrounded the issue of Upward Only Rent Reviews (UORR) in commercial leases; remember both Labour and Fine Gael had promised to abolish UORR terms in existing commercial leases so that tenants would no longer have to pay rents which were set in better economic times, and particularly at the peak of the Celtic Tiger when commercial rents were twice today’s levels.
The commitment stymied the commercial property market where transactions dried up as neither buyer nor seller knew what rental terms would apply after the Government’s intervention. And Minister for Justice, Equality and Defence Alan Shatter issued frequent updates where he re-affirmed the commitment, and for many months the stock response to requests for updates from the justice ministry was that a bill would be brought before the Oireachtas before Christmas 2011. And a framework including detailed legislative provisions went to the Attorney General in October 2011.
Then on 6th December, 2011 it was Minister for Finance, Michael Noonan who announced the Government was abandoning the proposed changes. Minister Shatter skulked around the Oireachtas avoiding the justified criticism of what looks like legal amateurism. So UORRs in pre-February 2010 commercial leases look set to remain, though there is a Supreme Court case, Kidney v Charlton, which is set to be heard on 27th January 2012 in which the constitutionality of UORR provisions in older leases is set to be tested.
Commercial tenants are not happy; Retail Excellence Ireland issued a particularly bad-tempered criticism of the Government’s decision. And today, a new banner has been unveiled atop Korkys shoe shop on Dublin’s Grafton Street. The new banner (old version can be seen here) is self-explanatory and givenGrafton Street is only a couple of blocks from the Dail, it is likely to be seen by many politicians including those who made the ill-fated commitment earlier this year.
UPDATE: 22nd December, 2011. Tenants on Grafton Street have produced a video to accompany the launch of the new banner.