Dáil Éireann Debate, Wednesday - 3 June 2020
427. Deputy Imelda Munster asked the Minister for Business, Enterprise and Innovation the status of proposed solutions to address the matter of commercial rents for businesses affected by Covid-19 closures; and if she will make a statement on the matter. [8365/20]
View answerI asked my officials to raise the matter of commercial rents and leases across a number of Government Departments. An inter-departmental discussion has taken place and there has been further engagement with a range of stakeholders, including groups representing businesses and landlords, to gain additional insights and gather intelligence to inform any further discussions. I have also asked my officials to look into the different responses from other countries and to identify possible options to address the issues involved.
While different options are being explored, I would point out that any support to business in respect of rents alone would ultimately end up as a support to the landlord. Not only would it be difficult to estimate the costs involved for such a scheme, but the offering of support, or even the perception that such supports will be forthcoming, may affect the market and lessen the impetus for landlords to renegotiate with tenants.
Engagement between the landlords and tenants should be the first route taken. Tenants and landlords are encouraged to engage with each other on this matter and come to some arrangement, as it is in everybody’s interest that terms are amicably agreed. Mixed reports from stakeholders have been received on the extent to which commercial tenants have been able to negotiate with landlords. Many landlords are being constructive at the moment with informal, temporary arrangements being agreed with tenants. There is, understandably, some reluctance by landlords to disclose such arrangements due to commercial sensitivities. However, it appears that other landlords have been less flexible.
I have also raised the matter of legal protections for businesses who are unable to pay their commercial rents with the Attorney General. Specifically, I asked about the potential for legislation to prevent the eviction of commercial tenants who have failed to pay rent as a result of the pandemic and the possibility of legislating to place a moratorium on businesses having to pay rent for premises they cannot used due to the restrictions imposed.
The Attorney General had advised that there are significant legal difficulties in respect to both of the questions posed. The difficulties stem from a variety of legal bases including statutory, constitutional, contract and common law. I have asked my officials to consider the advice.
The Government is committed to ensuring as many businesses as possible survive this challenging period, and it will continue to look at how we can support businesses that have been impacted by the COVID-19 crisis. The Government recognises the issue of ‘out of pocket’ costs for businesses which have to pay ongoing fixed costs such as rents, despite not being able to trade. We have introduced a suite of supports to assist businesses which includes the wage subsidy scheme, grants, low costs loans, deferred tax liabilities and the waiver of commercial rates. Full details on all supports are available at: https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/
The issue of supporting fixed costs, including commercial rents, was very much to the fore of our minds when the Government recently introduced the Restart Grant which will give direct grant aid to micro and small businesses to help them with the costs associated with re-opening following COVID-19 closures. The grants will be equivalent to the rates bill of the business in 2019, with a minimum payment of €2,000 and a maximum payment of €10,000.
