A chara, – I read that Arnotts had to pay €4 million to exit an upward only lease in the Jervis Centre (Finance, January 6th). I also heard of a case of owners of a small shop in a town paying a huge rent now in danger of losing their home due to personal guarantees demanded when they signed the lease. I noted also that Celtic Bookmakers was asked for two and a half years’ rent to exit from leases.
Viable businesses destroyed not by the recession, but by greedy landlords. In any other country in Europe the leases would be renegotiated and the businesses saved.
This lease law is a system of extortion, institutionalised by our legal system and perpetuated by the Law Society of Ireland and the Society of Chartered Surveyors. Both professional bodies are now heavily represented in Nama and for all we know continuing the heist. The upwards only rent review clause is an optional clause, they will cry, but fail to explain why virtually all commercial leases in the past 30 years have this clause, even the State leases. If it were optional our public servants should be asked why they agreed to such leases on behalf of the Irish citizen. This system guaranteed an increasing stream of income for developers and investors for 35 years. It fuelled the property bubble and destroyed the country.
All that was needed to enforce a rent increase on a business was a confidential agreed rent which was then used as a comparable in rent reviews. The system was wide open for corruption. This clause is now banned in new leases but there is anecdotal evidence that new tricks are being threatened by the surveyors on behalf of their clients: ie, you can only have a short lease with no rights of renewal or that only the landlord can trigger the rent review.
Why should these bodies which have failed so dramatically and at such great cost continue to be the arbitrators in these matters? We must adopt European lease law that is not open to corruption or manipulation.
A final ingredient necessary for the extortion mix is a laissez-faire political body and a media which publishes press statements without investigation or proper analysis. – Is mise,
MÁIRE Ó CORCRÁIN,
Silchester Wood,
Glenageary, Co Dublin.