Fianna Fáil has published a Bill to ban clauses within business leases which provide exclusively for upward only rent reviews. Spokesperson on Justice Dara Calleary moved the Landlord and Tenant (Business Leases Rent Review) Bill 2012 in the Dáil today (Wednesday, 28 March) and is has now been submitted for selection to the Ceann Comhairle.
Deputy Calleary explained, “Fianna Fáil has sought and received legal advice on banning clauses in business leases providing for upward only rents in a way constitutional law. These leases, most of which were negotiated in different economic times, are strangling so many small and medium sized businesses around the country. If we are serious about supporting the SME sector and encouraging growth and job creation, we must free businesses from the strangle-hold of exorbitant rents that no longer resemble market rates.
“The Fianna Fáil Bill recognises that upward only rent review clauses are a serious threat to the survival of small businesses. It recognises that the protection and promotion of small businesses is in the public interest to maintain jobs and the viability of the retail sector. It recognises that leases with upward only rent review clauses were negotiated in a different era. In these circumstances, the Fianna Fáil legislation will overrule any provision in a lease whereby rents can only be increased.
“The absolute necessity for this legislation is evident in the latest CSO figures revealing a further drop in retail sales last month, following on from a decrease in January. Small retailers are seriously struggling to cope with high operating costs, excessive rents and the Government’s decision to front-load a 2% VAT hike this year. Removing the barrier to negotiating more reasonable rents in this market would make an enormous difference to their chance of survival and growth.
“I look forward Labour and Fine Gael supporting this legislation when it comes before the Oireachtas, as it formed a key part of both parties election manifestos and the Programme for Government,” said Deputy Calleary.