State ties firms to upward rents

Hundreds of businesses are locked into upward-only rent reviews with the same landlord: the Government.

According to figures obtained by Sinn Féin’s Peadar Tóibín several hundred tenants renting from the State are locked into the same unsustainable rents that have been the cause of business failures such as HMV.

State bodies in the Department of the Arts, Heritage and the Gaeltacht, in particular Údarás na Gaeltachta, have several hundred tenants locked into upward-only rent reviews.

The Department of Jobs, Enterprise and Employment has more than 100 tenants tied to upward-only rent reviews, IDA Ireland has 64, while Shannon Development has 43.

The Department of Agriculture, Food and Marine has 60 tenants who cannot secure a reduction in their rents.

Mr Tóibín said that the Government’s failure to act was a scandal.

“It is apparent that the Government has sided with landlords and developers as opposed to small businesses and retailers. They have hidden behind the unseen and unpublished advice of the attorney general to support their friends in property against those creating jobs in the real economy. It is a scandal that Government has not led by example, ended these clauses and gave small business, employers and workers a break,” he said.

The Department of Agriculture said it will not be increasing rent in the foreseeable future. A spokesperson said: “In light of the prevailing economic climate the Minister for Agriculture, Food and the Marine decided to apply zero rent increases in the cases of leases that were scheduled for a rent review in 2012.

“The minister has decided that a similar approach will be taken in relation to leases where a rent review is scheduled in 2013,” ” he said.

However one business man, John Shine, who has been attempting to secure a reduction on a lease on a property in Killybegs, said that dealing with the Department of Agriculture is impossible. “It is like Wall Street doing business with Sesame Street,” he said.

Mr Shine took over a lease on a building with the intention of creating a seafood restaurant but he is paying nearly four times the rent of a similar property in Howth.