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Upward only rent reviews to be banned

UPWARD only rent reviews are to be banned by the Cabinet within weeks in a bid to stop the haemorrhaging of retail jobs due to demands from greedy landlords.

More than 30,000 workers have been thrown onto the dole in the past three years because their employers couldn’t afford to keep paying rents that were being ratcheted-up in the recession, industry insiders estimate.

Ministers are set to radically revise the law before the Dáil rises later this month by endorsing new laws which will radically rebalance the relationship between commercial landlords and tenants.

Property owners will face court action if they fail to be flexible with businesses under the legislation which will be pushed through the Oireachtas when it returns in September. The revised legislation will retrospectively abolish the increase-only provision in rental contracts so that “market sanity” can return.

Previous Labour attempts to reform the law were questioned as unconstitutional by Fianna Fáil when they were in power. To address those concerns the new Bill will have a “sunset clause” meaning that it will cease to be law after five years unless it is renewed.

Under the shake-up, five yearly upward-only rent hikes will be thrown out and tenants will be able to trigger talks on a new rate as soon as the proposals become law.

If landlords fail to agree to a rent decrease, commercial tenants will have the right to force them to arbitration and if that fails to secure better terms, property owners will face action in the circuit court under the new law.

The move was welcomed as long overdue by chairman of the Dáil’s influential Environment and Housing Committee, Ciarán Lynch.

“These upward-only rent rise clauses only exist in Ireland and Britain and I am glad to see the Government taking a robust approach on such a significant issue.

“This reform will protect retail workers’ jobs and normalise the commercial market creating a fair system for both tenants and landlords.

“The retail sector is the single biggest employer after the state sector and people working in it need to know they are getting a fair deal.

“Businesses cannot keep paying rent rates that were set during the property bubble and then be expected to pay even more when the upward only clause of the agreement is triggered,” Mr Lynch said.

The 2009 Conveyancing Bill abolished upward only rent hikes for all future contracts, but the then Fianna Fáil-Green administration said it would not be able to act retrospectively in this area.

Under the new proposals, which may go to Cabinet as soon as tomorrow, tenants will be able to request a review at any time.

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