Coveney's department still using 'upward only' leases
Published 24/01/2013 | 05:00
Small businesses that rent property from Simon Coveney's Department of Agriculture and Fisheries are locked in so-called 'upward only' rent leases, despite election promises that the notorious clauses would be scrapped, the Irish Independent has learned.
Government plans for an all-out ban on 'upward only' rents were shelved, after the Attorney General advised it would be unconstitutional.
However, the State can, and does, cut rents for some of its own tenants. Most businesses that have sought cheaper rents from the National Asset Management Agency (NAMA) have secured a cut, for example, but not those renting from Mr Coveney's department.
Before the 2011 election, both sides of the Coalition promised to ban 'upward-only' rental contracts, blamed for crippling many small and medium enterprises (SME). At the time, Mr Coveney was an outspoken critic of upward only rents.
"The effect of upward only rents in the middle of a recession is that retailers are being driven out of business by the law," he said in the Dail in 2010.
However, the Irish Independent has confirmed that businesses that currently rent from the department in harbours around the country are still renting under the 'upward only' rent clauses.
Affected businesses are in Casteltownbere in Cork, Dunmore East Co Waterford, Howth in Dublin, Killybegs in Co Donegal and Rossaveel in Galway.
"All leases issued in respect of properties in the six Fishery Harbour Centres . . . contain what are referred to as 'upward only' rent review clauses," the department said in a statement.
It goes on to say that the 2009 ban on new 'upward only' rent clauses does not contain any requirement to amend the leases. Rents have not been increased in any of the harbours over the past year and there is no plan to raise rent this year, the statement said.
Businessman John Shine holds one of the leases on a property in Killybegs and says that misses the point.
"Rents are going down, no landlord is increasing rents at the moment," he said.
He wanted to develop the warehouse he leased as a seafood venue catering to tourists, but says the scheme is not viable with the lease.
"My business is gone, and beyond redemption now," he told the Irish Independent.
He has handed back the keys, and is behind on his rent.
"We tried to get them to see sense, empty buildings make no income," Mr Shine said.