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The end of upwards only rent review clauses
December 2009
The Minister for Justice, Equality and Law Reform, Mr Dermot Ahern today 1 December 2009 signed an order prohibiting upwardly only rent review clauses in commercial leases under section 132 of the Land and Conveyancing Law Reform Act 2009. The section will come into operation on 28 February 2010. With effect from 28 February 2010 any new commercial lease entered into with an upwards only rent review clause will be deemed to have an open-market review clause instead. Open market rent reviews will allow the rent payable immediately before the review to increase, decrease or remain the same. It will not be possible to contract out of this provision. Section 132 will not affect the enforceability of upwards only rent review clauses in commercial leases entered into before 28 February 2010.
There was uncertainty as to when, or if, this section would be commenced but the Government have decided that it should be introduced. In his press release Minister Ahern said "The practice of including upward only review clauses in business leases is a deeply entrenched one. The time has come to end this practice. I look forward to more equitable business arrangements being put in place in the future which take account of the reality facing many business owners and retailers.
"I always made it clear that a reasonably lengthy period of time would be allowed to facilitate the market in taking on board the proposed change. I have never wavered in terms of my commitment to commencing this measure at the appropriate time. That time is now with us and, following on completing the necessary legal paperwork, the ban takes effect from the end of February."
If you have any queries on this please do not hesitate to contact Maitiu O'Donaill on m.o'donaill@beauchamps.ie
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