Commercial Tenancies & Statutory Rights of Renewal
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.
The Deed of Renunciation
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.
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Timing: 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.
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Requirements: 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.
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Scope: 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.
