MINISTER FOR Justice Dermot Ahern has rejected a Labour Party Bill containing emergency measures that would allow the Government to prohibit the application of “upward only” rent review clauses.
The Minister said he could not accept the Land and Conveyancing Law Reform (Review of Rent in Certain Cases) (Amendment) Bill, and that its proposals were not new.
“They are a repackaged version of a Bill introduced by the Labour Party last year, which was acknowledged by Government and by Fine Gael as being legally flawed.”
It was not a Bill that “the Government could with any credibility endorse”.
He stressed that the Attorney General’s advice was unequivocal that “this legislature cannot retrospectively rewrite contracts that were entered into freely by two individual parties”.
The Minister said “we cannot accept proposals that are half-baked. They have to be duly sound. We have looked at this issue high up and low down” and the legislature could not rewrite contracts.
Labour environment spokesman Ciarán Lynch, who introduced the legislation, said that “the Irish retail sector is the largest private industry in Ireland, representing over 24,000 stores and employing almost 280,000 people”.
“In 2009 there were 30,000 job losses at a cost of €600 million to the State. In January and February of this year, there have been 38 insolvencies and, additionally, 120 unlimited retailers have failed in the same period. Retail sale values were down by over 18 per cent in 2009, and by most recent measurements are down by over 30 per cent since 2007. Crucially, rent as a percentage of operating costs has increased beyond 20 per cent for many shopping centre tenants while sales implode.”
He said, however, that in “this collapsing market landlords protected by an upward-only rent review measure are looking for increases in rent in shopping centres such as Dundrum by 60 per cent, the Pavilion shopping centre in Swords by 100 per cent, Monahan shopping centre by 46 per cent, and in my own constituency of Cork South Central the landlord of the Wilton shopping centre is looking for increases of between 36 per cent and 58 per cent from hard-pressed tenants.”
Mr Lynch added: “This Government needs to wake up to the fact that high rents are costing jobs, reducing both businesses and workers’ incomes, and contributing to the stagnation of this economy.”
Sinn Féin finance spokesman Arthur Morgan said it was time to create a “level playing pitch”. He asked how, at a time when small businesses were trying “to keep a few more people from the grasp of unemployment”, upward-only rent reviews could still be in place. He said such reviews would “strangle existing businesses”.
