Government plan to ease rent is not enough
7 July 2009 | 0
The Labour Party has put forward a proposal for Financial Emergency Measures in Public Interest (Review of Commercial Rents) Bill 2009, designed to address the serious burden of upwards only commercial rent reviews. Following the Labour announcement, Minister for Justice Demort Ahern has told the Dáil that he intends to tackle the issue by creating a provision to eradicate upwards only rent reviews for businesses.
Responding to the move by Minister Ahern, Labour spokesman Ciarán Lynch TD said that while he extends “a guarded welcome” to the proposal, he believes it “falls short of what is required.”
“His proposal would have no retrospective impact whatsoever, and in reality, it will take 20 years or so to have any effect,” he commented.
According to the Labour Party, its bill, if passed, would empower the Government to grant temporary relief from the operation of upwards only rent reviews by providing that such reviews cannot result in a rent higher than the current market rent. Lynch said that he will put forward an amendment to the minister’s proposals which stipulates that companies who may already be in such rental agreements should be included in the provisions of the new legislation.
Following the announcement of Labour’s proposed amendment, Retail Excellence Ireland chief executive David Fitzsimons said that he welcomed the move that would do away with “out-dated lease law legislation” that is having a detrimental effect on the retail industry.
“While the global property cost average is 6.9% of turnover, the Irish retailer currently bears an unsustainable fixed cost of 20%, or more, of turnover,” Fitzsimons said.
According to Retail Excellence Ireland, the Irish retail sector in Ireland has suffered 40,000 job losses over the past 15 months and it is estimated that a further 36,000 jobs will be lost by January 2010.