Legislation to allow flexibility in existing leases with upward only rent reviews will be published by July of this year.
The Minister for Justice and Law Reform, Alan Shatter expects to publish the legislation during the summer and have it passed into law by the end of the year.
Questioned as to possible legal challenges to legislation which can change the terms of existing legal contracts, Mr Shatter pointed to Section 43 of the Constitution which allows retrospective changes where they can be shown to be in the interest of the common good.
Commenting on the Minister's announcement, Ciara Murphy, director general of the Society of Chartered Surveyors called on the Minister to consult all stakeholders including NAMA to ensure that there is a comprehensive understanding of the severe implications of any changes. "There are consequences from the changes and there are also consequences from doing nothing. Already the proposals are impacting on the market," she added.
A number of SCS members have highlighted how the Government proposals have already frightened off investors from purchasing commercial property with existing tenants and this has led to an impasse in the market. It is expected that the impasse could hamper the efforts of the Government agency Nama when it endeavours to dispose of commercial investment properties and retrieve repayments of loans it has bought from the banks. It has been estimated that the move could knock about 20 pc off the value of investment properties and that it is already costing the Government in terms of millions of euros worth of stamp duty from lost sales.
Some SCS members are hoping that NAMA Chairman Frank Daly will speak publicly on the issue next Tuesday when he is the guest speaker at the official launch of SCS Ireland, the new organisation formed by the merger of SCS and the Irish Auctioneers and Valuers Institute.
Meanwhile Retail Excellence Ireland has welcomed Minister Shatter's announcement and its chief executive David Fitzsimons points out that there have been considerable job losses as a result of landlords sticking to leases and refusing to reduce rents for tenants who are experiencing trading downturns.
He also called on the Minister to introduce a register of leases so that all parties can see the terms of leases to ensure there is a transparency in benchmarking of rents and to monitor both upward and downward rent changes for leases in the same street or schemes.
He also called for criminal proceedings to apply for non-disclosure or distortion of information for the register, to help to ensure a fairer system for arbitration of rents.