Leased Business Premises - The Right To Renew A Tenancy

Author:Ms Louise Wright
Profession:Dillon Eustace
 
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Introduction

The Landlord and Tenant (Amendment) Act, 1980 (the "1980

Act"), as amended by the Landlord and Tenant (Amendment) Act,

1994 (the "1994 Act") governs the relationship between

landlords and tenants of business premises and in particular,

provides for a number of statutory reliefs for tenants, notably the

right of a tenant to renew his or her lease. The right to a new

tenancy, and in particular the right to a new business tenancy, has

been amended by Section 47 of The Civil Law (Miscellaneous

Provisions) Act, 2008 (the "2008 Act") which enables

landlords and tenants of business premises to agree that the tenant

shall have the option to opt out of the tenant's statutory

entitlement to a renewal of the lease. This article outlines the

evolution of the laws governing a commercial tenant's rights of

renewal and identifies the changes made by Section 47 of the 2008

Act.

Background

(1) The Landlord and Tenant (Amendment) Act 1980 (the

"1980 Act")

Section 16 of the 1980 Act provides that where Part II of the

1980 Act applies to a tenancy, the tenant shall be entitled to a

new tenancy, commencing on the termination of the previous one,

subject to proving any one of the following

"equities";

Business equity under Section 13(1) (a), as amended by Section

3 of the 1994 Act - if the tenant has continuously occupied the

premises for 5 years.

Long possession equity under Section 13(1) (b) – the

tenant is required to be twenty years in possession.

Improvements equity under Section 13(1) (c) – if the

tenant is entitled to compensation for improvements and the said

improvements amount to half or more than half of the letting value

of the tenement when the notice of intention to claim relief is

served, then the tenant has an improvements equity.

If a new tenancy is established based on business equity, the

new tenancy will be fixed at twenty years or such lesser term as

the tenant may nominate. It will not however be fixed for a period

of less than five years without the landlord's agreement.

If a new tenancy is based on long possession equity or

improvements equity, the term of the new tenancy will be

thirty-five years or such lesser term as the tenant may nominate in

accordance with Section 23(2) of the 1980 Act, as amended by

Section 5 of the 1994 Act. The new tenancy will commence on the

termination of the previous tenancy.

Contracting out of one's rights under the 1980 Act is not

permitted and Section 85 provides that any provision in a...

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