Reform of rent reviews vital for the economy
Published 01/04/2011 | 05:00
The finding in the Moriarty Tribunal that Ben Dunne attempted to influence the rent review process in the Eircom building deserves further investigation. Had Mr Dunne succeeded in doubling the rent in the Eircom building, this rent would have been used to hike up all other Dublin city office rents and thousands of Irish businesses and jobs would have been destroyed. A lot of tenants are currently massively over-rented and thousands of jobs are at risk. Irish commercial lease law, ie upwards only rent review (UORR) played a central role in the massive over-valuation of Irish commercial property.
Reckless Irish banks lent billions against these leases, not against the properties. Toxic Irish lease law incentivised the use of side deals, and secret agreements, which allowed absurd rents to be used as a rod to beat all other tenants with.
The Government has included in the Programme for Government a policy to introduce legislation to deal with the UORR issue in legacy leases. This long-overdue reform will bring the curtain down on this sorry affair.