Andrew Doyle (Wicklow, Fine Gael)
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Question 227: To ask the Minister for Justice, Equality and Law Reform the action being taken to encourage voluntary review and reduction of rents; and if he will make a statement on the matter. [18113/10]

Dermot Ahern (Louth, Fianna Fail)
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I understand that the Deputy's question relates to rent levels prevailing within the commercial sector.

The rent review process arises on foot of private contractual arrangements which have been entered into by individual landlords and tenants and I have no statutory function which permits me to intervene in relation to the many individual negotiations which are ongoing at any one time. However, I and my Government colleagues are very conscious of the difficulties which are being faced at this time by the retail sector in particular.

Against that background, I have legislated to prohibit upward only rent reviews in leases entered into on or after 28 February of this year (section 132 of the Land and Conveyancing Law Reform Act 2009) and I believe that the commencement of that section will have a persuasive effect in relation to current lease arrangements.

Action has also been taken to address concerns which have been raised about the ability of tenants to obtain reliable and comprehensive information in the context of the rent review process and a Working Group has been established with the following terms of reference:

"To consider the operation of the current system for determining the rent payable on foot of a rent review clause, with particular emphasis on the arbitration process and the adequacy of the information available to all parties and, if necessary, to make such recommendations for change as may seem appropriate." It is envisaged that the Group will report by 30 June, 2010.

Every opportunity is also being taken to stress the need for landlords to take a flexible approach to rent review negotiations which arise in the context of current leases. It has been emphasised repeatedly that there is nothing to stop the parties to existing business leases from varying the terms of their contract and from agreeing to reduce the applicable rent, having regard to their individual circumstances and the realities of the market.