Niall Collins (Limerick, Fianna Fail)
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Question 12: To ask the Minister for Justice and Equality when he will publish legislation to ban upward only rent reviews [7065/11]

Dara Calleary (Mayo, Fianna Fail)
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Question 14: To ask the Minister for Justice and Equality when he intends to publish legislation banning upward only rent reviews [5973/11]

Alan Shatter (Dublin South, Fine Gael)
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I propose to take Questions Nos. 12 and 14 together. The programme for Government indicates that legislation will be introduced to end upward-only rent reviews for existing leases. I am conscious of where it appears that unrealistically high rent levels are being maintained in the retail sector and that this has consequent negative effects on business viability and on employment. Given the difficult economic circumstances which continue to prevail, I am in the process of developing a legislative proposal which would ameliorate the burden being experienced by that sector as a result of such rent levels. I have already initiated consultations with the Attorney General such that this matter can be progressed as expeditiously as possible.

In addition to the legislation which has been specified in the programme for Government, I am also conscious that one of the difficulties with rent reviews is the absence of readily accessible and accurate information to determine the market rent payable in respect of any given set of commercial premises. The Deputy will be aware that I arranged for the restoration of the Property Services (Regulation) Bill 2009 to the Order Paper, as I mentioned earlier. The Bill is now awaiting Committee Stage. I intend to bring forward amendments to the Bill to provide for the establishment of a public database containing relevant details of letting arrangements and rent reviews in the commercial property market. This will be a particular help in providing a level of transparency that does not exist in this area at present. The Property Services Regulatory Authority will have responsibility for the management of this database.

The recommendation regarding the database was contained in a working group report which was published in August of last year. That report also contained a recommendation for the adoption, by landlords and tenants alike, of a rent review arbitration code which was drawn up by the experts who participated in the group and which was appended to the report. A particular feature of the code is that it contains detailed provisions dealing with the production of comparative evidence in relation to property transactions and it also places a firm duty on all parties to disclose all relevant information in their possession. As matters stand, parties are free to specify that the code should apply in relation to rent review arbitrations. I welcome the endorsement of the code by a number of significant stakeholders in the sector.

Seán Crowe (Dublin South West, Sinn Fein)
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We all hear anecdotal evidence about this problem. Has the Minister a sense of the extent of the problem? Is it known how many companies are affected by this issue? I note what the Minister said about the promised legislation on the matter but does he know the extent of this problem?

Alan Shatter (Dublin South, Fine Gael)
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As the Deputy will be aware, there are substantial reports, particularly from the retail sector, of businesses being in substantial difficulty in circumstances in which they negotiated rents, particularly in the 2003 to 2007 period, which no longer reflect market reality and in circumstances in which in the context of the leases to which the businesses are tied there is provision for upward only rent reviews. Certainly it has been my experience that in a number of instances the owners of premises, or the landlords, have been willing on a voluntary basis to renegotiate rents with retailers in the context of them, I presume, realising they are better off having a tenant who can pay rent than having a vacant premises.

I appreciate the Deputy said the evidence on this issue is only anecdotal. I do not believe there has been any definitive statistic published on this but certainly a substantial number of retail outlets have been closed, some of them with substantial publicity, and these are businesses that would have remained viable if landlords, and often what I describe as the larger landlords, including pension funds, had been willing to be more realistic and renegotiate. Many of these had the potential to maintain a position as viable businesses, substantial employment has been lost and there is a public interest in addressing this issue. I do not want though to mislead the House in any way. I know there are certain constitutional difficulties in this issue being addressed and these I anticipate will form part of the consultation process that will result from my initial submission to the Attorney General's office.