Minister for Justice Alan Shatter has confirmed that Nama has agreed annual rent reductions totalling €14m from businesses “in order to help businesses survive”.
In a written Dáil response, he confirmed that the agency has granted 222 applications for rent reductions and a further 52 are under review.
He said: “Of the 284 eligible applications received only 10 have been refused, representing a 96% approval rate by Nama.
Mr Shatter said: “The practice of Nama in this area is one which I would commend to landlords in the commercial property market and in the retail sector in particular.”
In replies to questions by TDs Pearse Doherty (SF), Michael Healy Rae (Ind) and Alan Farrell (FG), Mr Shatter said “Nama is playing a role in dealing with problems caused by upward-only rent reviews applying to Nama properties”.
However, he said there are no plans to revisit the 2011 government decision not to proceed with legislation to abolish upward-only rent review clauses in commercial leases which were entered into prior to Feb 28, 2010.
Mr Shatter said that the Government considerations “involved a substantial concern that any legislative scheme involving interference in the contractual relationships of private parties would find it extremely difficult to survive a constitutional challenge”.
He also pointed out: “In addition, the Government was advised that any model proposed would require the payment of compensation to landlords whose rights were infringed in order to ensure that the proposal would be compatible with the Constitution and with the European Convention on Human Rights.”
Businessman and restaurateur, Jay Bourke, who has been vocal on the need to abolish upward-only rent reviews, said yesterday: “A rent reduction of €14m by Nama in the context of its overall property portfolio doesn’t sound like a lot.
“The real question to answer is what has been the scale of the Nama rent reductions? Have the rents been reduced to market value?”
Mr Bourke said that “it is an absolute disgrace that the Government didn’t proceed with abolishing upward-only rent reviews. I was really convinced that they would as the upward-only rent clauses have resulted in monumental jobs loss.”
Mr Bourke said he doesn’t accept Mr Shatter’s legal advice.
The minister did confirm that work is under way to ensure that a commercial leases database by the Property Services Regulatory Authority will be operational shortly.
© Irish Examiner Ltd. All rights reserved