LAND AND CONVEYANCING LAW

Land and Conveyancing Law Reform Act 2009

Land and Conveyancing Law Reform Act 2009

Introduction

Section 132 of the Land and Conveyancing Law Reform Act (“the 2009 Act”) came into effect on 28 February 2010. The main purpose of the Act was to overhaul the procedures in relation to conveyances and land law in a manner which had not been seen since the 19th Century. Section 132 was welcomed by those with a commercial interest who intended on taking out a lease of premises after the commencement of the provision. These tenants gained some strength from the knowledge that their rents could go down as well as up particularly in the uncertain economic future which lay ahead. Arguably putting them in a more favourable position than they would have been in if they had taken out that same lease prior to 28 February 2011. However, responses to the introduction of Section 132 may not have been as favourable with those tenants already tied into leases of commercial premises.

A lease of a commercial nature in Ireland in the past contained a clause to the effect that the rent payable under that the lease would be reviewed on a fixed basis, usually every five years. The rent was reviewed in line with the market rent which the property would be expected to command at the time of that rent review. Wording inserted in these clauses to the effect that rent could not fall below the rent which was payable immediately before the review. Ireland and the UK were the only two EU countries known to have these types of rent review clauses existing as an integral part of a commercial lease transaction. While these types of leases welcomed by landlords, a fast approaching rent review date, caused concern for a lot of tenants, particularly in prime locations.

Now the current law prescribes that any new leases created after the commencement date of 28th February 2010 containing a rent review clause must allow for the rent payable after the review to be less than, greater than or equal to the same amount of rent which was payable immediately before the review. In theory, this is good news for those who are hoping to avail of the tenant's market which is said to exist; however, the point at which some consideration may be required is where a lease has created prior to 28th February 2010. Given the failure of the legislation to address the issue of leases already in existence the somewhat unfavourable aspect of section 132 can be seen.

According to the Land and Conveyancing Law, the socio-economic system of the nation emphasizes commercial area in Ireland as a strategic base for sustainable commercial lease. The value of the commercial sector not limited to beneficial commercial effects on domestic property, but it surpasses that area and located within the idea are much more comprehensive for human and social development of the population. Along these lines, the Constitution provides that the country must develop commercial ...