Peadar Tóibín
Question:31. Deputy Peadar Tóibín asked the Minister for Justice and Equality the steps or proposals that are under active consideration by him to address the issue of the operation of upward only rents. [41613/12]
View answerWednesday, 24 October 2012
Questions (31)
Written answers
The primary responsibility which I have in relation to this matter relates to possible legislative intervention to ban upward only rent reviews in existing commercial leases. The Deputy will recall that following extensive consideration of this matter, the Government announced in December last that it had decided not to proceed with such legislation. There was 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. 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. The Government was strongly of the view that payment of compensation to landlords in such circumstances could not be justified in the current economic climate.
Although legislative intervention may not be feasible, NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties, and since the start of the year has approved cumulative rent reductions of over €6 million. I would also mention that I have commenced the Property Services (Regulation) Act 2011 which, amongst other matters, provides for the establishment and maintenance of a Commercial Leases Database by the Property Services Regulatory Authority. This Database will assist in providing readily accessible, accurate information in order to determine the market rent payable in respect of comparable commercial properties. Work is underway to ensure that the Database will be operational at an early date.
Finally, I wish to highlight the existence of a rent review arbitration code which was drawn up by a group of experts whose membership was drawn from all stakeholders in the commercial property arena. The code, which can be found on www.justice.ie, provides a mechanism to deal with the resolution of rent review disputes in the commercial property sector.