Rent reform expected by the end of this year
Minister for Justice and Law Reform, Alan Shatter, expects to have new legislation on rent reform passed into law by the end of 2011
Print19 April 2011
New legislation to allow flexibility in existing leases with upward only rent reviews will be published by this July.
Minister for Justice and Law Reform, Alan Shatter, subsequently expects to have this new legislation on rent reform passed into law by the end of the year.
Questioned on possible legal challenges to legislation which can change the terms of existing legal contracts, Shatter highlighted Section 43 of the Constitution. This allows retrospective changes to occur if they can be shown to be in the interest of the common good.
However members of the Society of Chartered Surveyors (SCS) have highlighted how the government proposals have frightened off investors from purchasing commercial property with existing tenants; creating an impasse in the market.
The National Asset Management Agency (Nama) has also warned that the proposed changes to rent legislation would “significantly impact” on its ability to repay the debt it has issued.
In a letter to the Department of Finance reported on in The Irish Times, Nama chief executive Brendan McDonagh and head of portfolio management John Mulcahy said that the loans being transferred to Nama are done so on the basis of their valuation in November 2009, and that they were “assessed and valued on the assumption that existing contractual lease terms prevail”.
Any change in the law “would mean that Nama would have effectively overpaid” and would be “required to continue overpay (sic)” for these assets, the letter added.
Meanwhile Retail Excellence Ireland (REI) welcomed Minister Shatter’s announcement.
REI chief executive David Fitzsimmons also called on the Minister to introduce a register of leases so that all parties can see the terms of leases in order to ensure there is a transparency in benchmarking of rents.
He also called for criminal proceedings to apply for non-disclosure or distortion of information for the register, to help to guarantee a fairer system for arbitration of rents.
According to REI, an average of 14 new positions per company could be created and 45 positions secured (over 20,000 new jobs) in those retailing firms currently affected by upward-only rent reviews if they are abolished.
Related Articles
M&S launches ‘Farm to Foodhall’ campaign with chef Mark Moriarty →
Sweet disposition →
Tesco opens new Limerick store, creates 33 jobs →
Fans 0
Followers