Dáil Éireann Debate, Tuesday - 21 May 2013
514. Deputy Michael Healy-Rae asked the Minister for Justice and Equality the action he is taking regarding upward only rent reviews and high rents to assist struggling businesses; and if he will make a statement on the matter. [24206/13]
View answer516. Deputy Alan Farrell asked the Minister for Justice and Equality his views on the feasibility of establishing an independent regulator or register for commercial tenancies, landlords and tenants; and if he will make a statement on the matter. [24381/13]
View answer538. Deputy Pearse Doherty asked the Minister for Justice and Equality following the enactment of the Irish Bank Resolution Act 2013 and its provision to suspend property rights in the common good, and in view of a raft of recent examinerships in which reductions in commercial rents in so-called Upward Only Rent Review leases to market levels, have led to several high-profile businesses being saved, if he has considered consulting with his colleagues to re-examine the possibility of abolishing UORR leases; and if he will make a statement on the matter. [24131/13]
View answerI propose to take Questions Nos. 514, 516 and 538 together.
As I have indicated in my replies to previous Parliamentary Questions on the subject of upward only rent review clauses, there are no plans to re-examine the decision which was taken in 2011 not to proceed with legislation to abolish such clauses in commercial leases which were entered into prior to 28 February 2010. Neither of the matters to which Deputy Doherty refers impact upon the considerations which resulted in the Government taking the decision which it did. It will be recalled that those 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. 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.
With regard to providing assistance to businesses in relation to this matter, absent legislative intervention, NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties. I have been advised that, by end-April 2013, the Agency had granted 222 applications for rent abatement with an aggregate annual value of about €14 million which represents the annual value of rent due to NAMA that it has agreed to forego in order to help businesses survive. A further 52 applications were under review at that date. Of the 284 eligible applications received only 10 have been refused representing a 96% approval rate by NAMA. 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.
More generally, the importance of supporting the retail sector is widely recognised across a range of Government Departments. I would draw the attention of Deputy Healy-Rae to the Action Plan for Jobs which lies within the remit of the Minister for Jobs, Enterprise and Innovation. I would also note the continuing action which is being taken to reduce the costs for doing business for all businesses and which is intended to have a positive impact on areas such as energy, local authority rates, and the administrative burden involved in companies complying with Government regulations and tax systems.
Regarding the feasibility of establishing a register for commercial tenancies, the Property Services (Regulation) Act 2011 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 shortly.
