IRELAND Law and Practice Contributed by: Diarmuid Mawe, Craig Kenny, Katelin Toomey and William Fogarty, Maples Group
• a lease on a medium- to long-term basis, usually for ten years to 15 years. 6.3 Regulation of Rents or Lease Terms Commercial leases are freely negotiable, subject only to statutory provisions. Recent Irish case law has emphasised that a court will not imply terms into a lease where it has been freely nego - tiated, even in the context of the COVID-19 pan - demic. Generally, any rent arrears remain pay - able unless an alternative agreement is reached between the landlord and tenant. Certain areas in Ireland have been designated as Rent Pressure Zones (RPZs). RPZs are located in parts of Ireland where rents are highest, and where households have the greatest difficulty finding affordable accommodation. RPZs now cover most urban areas in Ireland. Under cur - rent legislation, any increase in the rent charged on residential property cannot exceed general inflation, as recorded by the Harmonised Index of the Consumer Prices, or 2% per year pro rata, whichever is lower. 6.4 Typical Terms of a Lease It is now unusual to have a lease with a term in excess of 15 years in the Irish market. Previously it was not unusual to have leases with terms of between 20 and 30 years. In general, commercial leases in Ireland are full repairing and insuring leases, and a tenant will have full repairing obligations. The obligations are imposed directly by a repair covenant in the lease or, in the case of a multi-let development such as an office block, shopping centre or busi - ness park, the obligations may be imposed indi - rectly through a service charge that imposes an obligation on the tenant to reimburse the land - lord for repair works carried out to the structure and common areas of the development.
Payment obligations are subject to agreement between the parties, although the most common payment is quarterly in advance. The practice that developed during 2020 and 2021 of landlords agreeing to rent abatements or standstill arrangements for rent-free periods where premises were closed due to COVID-19 is no longer common practice, and landlords now generally refuse to include such provisions in newly negotiated leases. With the increased focus on ESG factors in real estate transactions, green leases are becoming increasingly important and incorporate clauses that promote the sustainable operation and man - agement of buildings. In January 2023, the Irish Property Working Group of The Chancery Lane Project published a suite of green lease clauses for use in commercial leases in Ireland. These clauses, or variations thereof, are expected to become increasingly permanent fixtures in the terms of a typical commercial lease. 6.5 Rent Variation Usually, a commercial lease will provide for a rent review periodically throughout the lease, generally at five-yearly intervals. The rent may be either increased or decreased (the 2009 Act pro - hibits “upward-only” rent-review clauses from February 2010, but not with retrospective effect). Commercial landlords and tenants employ cer - tain mechanics on occasion to control the varia - tion in the rent – for example, a fixed or stepped rent over the term of a lease may be provided for, or the rent may be linked to the variation in the Consumer Price Index. 6.6 Determination of New Rent Usually, rent is reviewed upwards or downwards to market rent and agreed between the land - lord and tenant. If agreement cannot be reached
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