In Ireland, the landlord and tenant relationship used to be governed by two principal pieces of legislation – the landlord and tenant (amendment) Act 1980 as amended by the 1994 Act. Since 2008 however these Acts have been amended further by Section 47 of the Civil Law (Miscellaneous Provisions) Act, 2008.

For tenants, particular reliefs are available under the 1980/1994 Acts, most importantly, the right to renew a commercial lease. This article aims to provide a commercial tenant with important information about the changes that have occurred in this area of law since 2008 with the Civil Law (Miscellaneous provisions) Act and to be aware of contracting out of your statutory rights.

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”;

1.  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.

2.  Long possession equity under Section 13(1) (b) – the tenant is  required to be twenty years in possession.

3.  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.

The three different types of equities are important as they will determine what type of new tenancy a commercial tenant is entitled to claim. For example, the business equity, once established (i.e. in occupancy for more than 5 years) means a new tenancy will be fixed at twenty years or such lesser sum as the tenant chooses. If on the other hand the equity is based on long possession or improvements, then a tenant can claim a thirty five year lease or such lesser sum as the tenant so chooses. The new tenancy will commence on the termination of the previous tenancy.

Up until 1994, contracting out of a tenant’s right to renew was not something that could be done. However since the 1994 Act, this has changed when it comes to tenants who are renting office space (note here this right to “contract out” was not available to industrial and retail tenants) and where there is evidence in writing of a tenant’s renunciation of this right, this is sufficient to prevent a tenant getting a renewal when the time comes to this statutory right to be invoked.

Then in 2008, under the Civil Law (Miscellaneous provisions) Act, Section 47 now extended the type of business that can now contract out of their entitlement to renew their tenancy, after 5 years to all business tenants who have a tenancy pursuant to Section 13(1) (a) of the 1980 Act.

More and more frequently where a business owner is entering into a short term business letting arrangement, a landlord requires that prospective tenant to execute a deed of renunciation at the same time of the execution of the short term business letting agreement. The deed of renunciation, once signed by a tenant, means that their right of renewal under the 1980/1994 Acts has been lost.

It would appear that tenants, who have a tenancy pursuant to long possession or improvements as outlined above, do not qualify under Section 47 of the 2008 Act and as such are not able to contract out of their rights to renew. This reason alone we would advise you to be very careful to get expert advice from your solicitor in Limerick prior to entering into a commercial lease and certainly before you renounce away your statutory rights.

This article is general in nature and cannot be regarded as legal advice. It is general commentary only. You should not rely on the contents of this article without consulting one of our Solicitors. If you would like advice regarding how the law applies to your individual circumstances, then please contact Roisin O’Connell Solicitors.