[UPDATE: 30th March 2012. The text of both the Fianna Fail Bill, Landlord and Tenant (Business Leases Rent Review) Bill 2012 and the Sinn Fein Bill, Landlord and Tenant (Business Leases Rent Review) Bill 2012, is now now available - both are pretty light on detail for what would potentially be a serious interference in property rights]
The most fractious issue in the Irish commercial property world last year was the uncertainty created by the incoming Government’s commitment to abolish Upward Only Rent Review (UORR) clauses in commercial leases created before February 2010. Although commercial property covers a wide spectrum including office blocks, hotels, pubs, and industrial factories/warehouses, it was retailers who were most vociferous in promoting the need for a mechanism to allow rents to be reduced to current market levels which are 50% less than peak in 2006/7. The uncertainty was ended on 6th December 2011 when Minister for Finance, Michael Noonan announced to the Dail that “it has not proved possible to develop a targeted scheme to tackle this issue that would not be vulnerable to legal challenge or require compensation to be paid to landlords” Following the announcement, landlords were ecstatic, tenants were crestfallen and the property industry generally was pleased that the uncertainty had been removed.
Well today, a measure of uncertainty returns with the tabling of a Bill by Fianna Fail to abolish Upward Only Rent Reviews. The Bill is called the Landlord and Tenant (Business Leases Rent Review) Bill 2012 and it should be published shortly on the Oireachtas website here. Fianna Fail deputy Dara Calleary, who introduced the Bill, sets out more information about its contents and objectives here. Fianna Fail presently has 19 deputies in the 166-member Dail though it is likely to find support from other elements of the Opposition, but ranged against a Government which holds a decisive majority with 109 even after deducting the four who have lost the whip, the Bill seems unlikely to get off the starting blocks.
Elsewhere Sinn Fein has said that it will introduce a similar Bill, the Public Interest (Reviews of Commercial Rents) Bill 2012. Retail Excellence Ireland has predictably welcome the Bill though it appears not to have been tabled in the Dail just yet.
Will the whole UORR debate be re-ignited? Difficult to say, the Government took nine months last year before announcing its abandonment of any changes on constitutional grounds which was apparently after receiving advice from the Attorney General so you might think these Bills will not progress for both legal and political reasons. But you never know…