“I am fully aware of the difficulties that upward only rent reviews are causing for some businesses. Despite exhaustive work in recent months by my colleague the Minister for Justice, Equality and Defence, Deputy Alan Shatter, including the preparation of draft legislation, 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. I do not believe the Opposition would want us to compensate landlords for any losses in their rent.” Minister for Finance, Michael Noonan announcing the abandonment of attempts to reform Upward Only Rent Review legislation, during the Budget 2012 announcement on 6th December 2011.
Earlier today, the Governor of the Central Bank of Ireland told RTE’s “The Week in Politics” that the IBRC Bill – available here - had been signed off by the Attorney General before the end of 2012. For those of us, patiently waiting for the Bill last Wednesday night, the feeling was that the Bill was still being finalized. The Bill itself contains some draconian terms, and one which has piqued the interest of retailers in Ireland who have been campaigning for the abolishment of Upward Only Rent Review leases was the statement in the preamble to the Bill that “In the common good may require temporary or permanent interference with the rights, including property rights, of persons”
It remains unclear how this will affect the liquidation of IBRC property but the stated suspension of property rights in the common good will be latched upon by struggling retailers whose hopes in the Government delivering on its election commitments to abolish UORR terms in pre March 2010 leases was so cruelly abandoned in December 2011.
It seems bizarre that in the context of winding down IBRC that the suspension of property rights is considered appropriate whilst in the context of promoting competition and allowing a major sector of the economy to operate without distortion, which can only boost the economy and jobs, that the Government is unable to deliver on its commitment because it would “be vulnerable to legal challenge or require compensation to be paid to landlords”.
Wishful thinking! How is property defined – i.e. does it include savings? Reckon they are preparing to seize and freeze anything they can get their hands on.
I’d be far more worried were I a member of the civil service. The property right to their pay and pensions is very thin indeedy.
As to the UORR, there are a few things connected. If it was the requirement of the state to take over a building/land/area of seas to provide a military base. That’s simple enough. Or even to buy an entire street and hand it over to the tenants. That’s been established with the Land Acts. But what whats happening here with the UORR’s is stepped and would have the state interfering between parties on a contract both entered willingly.
Mind you, what they could do is provide a mutual out. Say three years at current rent to quit.
There is no chance of the UORR legislation being changed to enforce downward rent revisions on existing leases, unless landlords are paid compensation.. The country would be seen as a banana republic from an financial investment perspective – somewhere akin to Zimbabwe. It just is not going to happen. We would become an economic pariah.
Having said that, this is the country that guaranteed all the bondholders in its insolvent zombie banks. Our politicians’ stupidity knows no boundaries.
+1, it’s tiresome at this stage. No doubt some will be in to wave around Hogan’s waver-thin, bought-and-paid-for letter of advice any time now.
The parallel argument to changing UORR is debt forgiveness for mortgage holders. Changing UORR to benefit tenants is akin to debt forgiveness – i.e. one party benefits. Debt restructuring on the other hand allows the debt holder to have some sort of potential future upside – and I’ve not heard any such similar suggestions for landlords.