IRELAND Law and Practice Contributed by: Diarmuid Mawe, Craig Kenny, Katelin Toomey and William Fogarty, Maples Group
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 between the parties, the lease may provide for referral to an expert or an arbitrator for deter - mination. 6.7 Payment of VAT In the case of a commercial/business lease, a landlord may elect (but is not obliged) to charge VAT on the rents, in which case VAT applies at the relevant rate (currently 23%). 6.8 Costs Payable by a Tenant at the Start of a Lease Stamp duty is payable on commercial leases at 1% of the average annual rent. It is the ten - ant’s responsibility to discharge the stamp duty. A tenant may also be obliged to pay insurance rent, any initial service charge contribution and, if commercially agreed, a deposit. 6.9 Payment of Maintenance and Repair A landlord or management company will normal - ly maintain common areas in a multi-let building or estate and recoup the costs from the tenants through a service charge. 6.10 Payment of Utilities and Telecommunications Normally, a tenant is responsible for all outgo - ings consumed on the premises, and these are usually metered and paid directly by the tenant to the provider. Utilities and telecommunications
consumed on the common areas are normally paid by the landlord and recouped from the ten - ants via a service charge. 6.11 Payment of Property Taxes The responsibility for real estate taxes relating to commercial rental property can vary depending on the terms of the lease agreement between the landlord and the tenant. However, the following sets out the general position. The responsibility for paying real estate taxes on rental property typically falls on the landlord, with the exception of any taxes that relate to the use of the rental property by the tenant. For example, a landlord is responsible for paying any taxes associated with the ownership of the property, such as Local Property Tax, if any element of the prop - erty is residential; if the landlord sells the prop - erty, they are responsible for paying any capital gains tax on the profit from the sale. Commercial rates are a form of local property tax levied on businesses and are typically the responsibility of the tenant. Tenants are also generally liable for the payment of the stamp duty on the grant of a commercial lease. 6.12 Insurance Issues The landlord will usually insure the property, and the tenant will refund the amount of the premium to the landlord as insurance rent under the lease. Typical risks insured against for property dam - age are fire, flooding, storm, malicious damage, subsidence and lightning. Terrorism insurance is also available in the Irish market but is not com - monly utilised. Some tenants and businesses have recovered costs under business interrup - tion insurance, depending on the terms of the relevant insurance policy. In 2022, the Irish Commercial Court issued its third judgment in favour of the claimants in a case taken by a group of publicans against a
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