AG urged to tackle rent reviews
Such a move, according to IBEC-affiliated body Retail Ireland, is urgently needed and should be accompanied by the establishment of a commercial rents assessment board, something which should be chaired by a High Court judge and have statutory powers, where tenants could seek rent reductions to reflect economic circumstances.
“As it stands, there is no self-correcting mechanism available for inflated commercial rents. Over the last decade rent as a percentage of turnover has doubled from 10% to 20% for retailers. Upward-only rent reviews have not only contributed to this inflation, but have contributed significantly to the loss of over 50,000 jobs in the retail sector since 2008,” according to Retail Ireland director, Torlach Denihan.
Mr Denihan added: “The previous government would not remove upward-only rent review clauses from existing leases because their Attorney General said to do so would be unconstitutional.
“The new Attorney General should, as an immediate priority, review this decision, with a view to introducing new legislation to remove these clauses from existing leases. Apologists for upward-only rent reviews are unwilling to contemplate solutions. They fail to grasp that Ireland’s economy would be best served by managed rent reductions, rather than the closure of perfectly good retail businesses with the consequent unemployment for staff, bankruptcies of owners and losses for creditors.”
Mr Denihan added that “a major adjustment” throughout the economy via prices, pay rates and social welfare payments is underway resulting in “a painful process” and that commercial rents need to be added to this list.
“Landlords should participate in this adjustment, too. Unless this is done, jobs will be lost and otherwise viable businesses will have to close,” he added.
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