A short synopsis of Irish Landlord and Tenant law relating to the renunciation of a commercial tenants right to a new tenancy and the importance of this legislation from a commercial landlord’s perspective.
Under Irish Landlord and Tenant law (namely The Landlord and Tenant (Amendment) Act 1980, amended by the Landlord and Tenant (Amendment) Act 1994), a commercial tenant who is in continuous occupation of a premises for business purposes for a period of five years or more may acquire a right to renew the tenancy for upwards of twenty years without landlord’s consent.A claim to a statutory tenancy may have a significant effect on a commercial landlord who has alternative plans for the long term use of the property, thus it is important that landlords take the necessary steps to prevent a statutory tenancy claim from arising. This is normally done by way of a Deed of Renunciation (a “Renunciation”), whereby the tenant formally renounces in writing their right to a new commercial lease on expiry of the lease term.A Renunciation can be entered into at the commencement of the tenancy or anytime thereafter. It is preferable, from a landlord’s perspective, if it is executed at the outset as there is no guarantee that the tenant will agree to execute the Renunciation once the lease has been entered. The landlord should ensure that the Renunciation is in writing, and that the tenant receives independent legal advice on the implications of the Renunciation prior to the execution of same.Previously, a Renunciation was restricted to office use only. This position was amended by Section 47 of the Civil Law (Miscellaneous Provisions) Act 2008, which provides that a Renunciation can now be executed in respect of any business tenant, including retail and industrial business premises.In summary, commercial landlords should ensure that they insist upon a tenant entering into a Renunciation before the tenancy begins. In situations where a tenant is not willing to execute a Renunciation, a short term lease should be entered. These are generally for a period of four years and nine months.This note is for general information purposes and does not constitute legal advice. Legal advice must be obtained for all individual circumstances. Each case must be assessed on its own merits.
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