Two recent cases on the validity of upwards only rent review clauses in commercial leases have been causing considerable waves in the landlord and tenant market.
Upwards only rent review – update
Two recent cases on the validity of upwards only rent review clauses in commercial leases have been causing considerable waves in the landlord and tenant market.
The first of which is the Bewleys case : Ickendel Limited -v- Bewleys Café Grafton Street Limited. In this case the High court held that on the basis of specific wording that had been utilised in the lease, the rent payable after the rent review would reduce.
The High Court held that the lease put a bottom floor on the rent payable as being the initial rent set in 1987 . It was not clear that the rent thereafter would not reduce below the previous period.
It is clear that this case turned on the particular wording of this lease and therefore wider ramifications for the landlord and tenant market are in our view limited.
The second case of note in this area is the Medical Council case.
The medical council recently failed to have its rent reduced to market rent under a 20 year lease it holds with developer Johnny Ronan. The lease contained an upward only rent review clause however the Medical Council sought to instead have market rent applied to the rent review. The Court held that this could not be upheld and that the upward only rent review stood. Therefore rent could not fall below €820,000 even though it was contested by the Medical Council that the market rent was €374,100.
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