There is a statutory ban on upward only rent review clauses in leases entered into after 28 February 2010. No equivalent ban was introduced for pre-28 February 2010 leases.

Retailer-led pressure to ban upward only rent reviews in pre-28 February 2010 leases has led to the introduction of a Private Members’ Bill that seeks to render unenforceable upward only rent reviews in pre-28 February 2010 commercial leases.

The Government’s stance has long been that applying the ban to existing leases would be unconstitutional. In the Explanatory Memorandum to the Bill, Senator Fergal Quinn asserts that the Bill is compatible with the Constitution and argues that it is proportionate to the social and economic objective which it seeks to achieve.

In 2010, a Dail vote rejected a Labour party Private Members’ Bill seeking to extend the ban in certain circumstances.  Instead, a Working Group was set up to address the issue which recommended the establishment of (a) a non-statutory code of best practice for the governance of arbitrations and (b) a statutory public commercial lease database. The second recommendation was implemented with the establishment of the commercial lease database Click here and here for previous articles on this. This database is now operational.

Given the Government’s stance, it is thought to be unlikely that the Bill will be enacted.

Contributed by Tara Rush.

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