Dara Calleary (Mayo, Fianna Fail)
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To ask the Minister for Justice and Equality the measures he has implemented to improve competitiveness in relation to commercial rents; and if he will make a statement on the matter. [37404/12]

Dara Calleary (Mayo, Fianna Fail)
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To ask the Minister for Justice and Equality his policy on upward only rent reviews [37425/12]

Alan Shatter (Dublin South, Fine Gael)
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I propose to take Questions Nos. 1149 and 1150 together.

As the Deputy will be aware, Section 132 of the Land and Conveyancing Law Reform Act 2009 prohibits upward only rent reviews in respect of leases entered into on or after 28 February 2010. The Deputy will also recall that the Government announced in December last that it had decided not to proceed with legislation to abolish upward only rent reviews in existing commercial leases, i.e., those entered into prior to 28 February 2010. 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.

While legislative intervention may not be feasible, the Minister for Finance has outlined the role which NAMA can play in dealing with the problems caused by upward only rent reviews which apply to NAMA properties. NAMA has published its policy guidance which will inform the approach to be taken where relevant tenants are experiencing difficulties in paying rents. Where there is a failure to reach agreement on revised contracts the policy guidance provides an opportunity for NAMA to approve rent reductions where it can be shown that rents are in excess of market levels, and that the viability of the tenant is threatened. The policy also provides for the appointment of an independent valuer to ascertain current market rent. Where a tenant is not getting satisfaction he or she can contact NAMA directly.

While overall responsibility for competitiveness policy rests with the Department of Jobs, Enterprise and Innovation, one of the difficulties in relation to rent reviews in the commercial property sector is the absence of readily accessible and accurate information in order to determine the market rent payable in respect of comparable commercial properties. This issue has been addressed in the Property Services (Regulation) Act 2011 which provides for the establishment and maintenance of a Commercial Leases Database by the Property Services Regulatory Authority. Work is underway to ensure that the Database will be operational at an early date.

Finally, I would also note the existence of a rent review arbitration code which was developed by an expert group whose membership was drawn from all relevant stakeholders and which provides a mechanism to deal with the resolution of rent review disputes in the commercial property sector.