Thursday, 15 July 2021
Department of Enterprise, Trade and Employment
134. To ask the Minister for Enterprise, Trade and Employment if a commercial landlord can be prevented from increasing the rent on a commercial property given the financial impact that the Covid-19 pandemic has had on many businesses; if rent protections are available to commercial tenants; and if he will make a statement on the matter. [38791/21]
I understand some businesses are under pressure to meet their fixed costs, such as rent, after what has been an exceptionally challenging period. At the same time, we must remember that commercial landlords have their own financial obligations that still need to be paid. Where a landlord has debt in place, their flexibility will likely be driven by what their bank/lender will accept. One person’s rent might be another person’s income or pension.
The Government has urged commercial landlords and tenants to talk to one another and come to some arrangement, as it is in everybody’s interest that terms are amicably agreed. Landlords should be willing to do what they can to help their tenants to continue to operate rather than facing the risk of a vacant premises and inability to obtain new tenants. Equally, tenants should pay what they can and speak with their landlord when difficulties arise.
Last October, I published the Code of Conduct between landlords and tenants for commercial rents. The aim of this Code is to facilitate discussions between landlords and tenants impacted by COVID-19. It sets out a structured approach for engagement between both commercial landlords and tenants, based on their mutual interest in continuing to work together.
However, the Code should not be seen in isolation. The Government has put in place a comprehensive package to help businesses through the crisis including the Employment Wage Subsidy Scheme (EWSS), the COVID-19 Restrictions Support Scheme (CRSS), Small Business Assistance Scheme for COVID (SBASC), the forthcoming Business Resumption Support Scheme (BRSS), low-cost loans, the deferral and warehousing of tax liabilities and the waiver of commercial rates. Many of these alone, or in combination, can be used to assist in the payment of commercial rents if needed.
The Land & Conveyancing Law Reform Act 2009 and related matters, such as rent reviews, are a matter for the Minister for Justice. However, I understand that, since the enactment of the Land & Conveyancing Law Reform Act 2009, 'upwards only' rent review clauses are prohibited in all leases created after 28 February 2010 and leases, since then, must allow for the rent to go upwards, or downwards, on review. Typically, the new rent is based on the evidence of new lettings of comparable properties at the time the review falls due. Where a tenant disputes the rent review, the matter is usually referred to an independent chartered surveyor, who acts as an arbitrator or expert and decides the new rent.