Practice Area » Landlord & Tenant
Landlord & Tenant
This governs the relationship between the owner of a property and a person to whom that property has been let for a period of time. Generally these agreements fall into two broad categories:-
Commercial Leases
These agreements cover property which is used by the Tenant for commercial as opposed to residential use. These agreements fall into two broad categories which are detailed below.
- Agreements for periods up to and including five years.
Many Landlords are loathe to grant Leases for periods greater than four years and eleven months (this used to be two years and eleven months) for fear of a Tenant acquiring the right to a new Lease (this is generally called a Business Equity). This obviously puts a limit on the number of Tenants available to a Landlord as many Tenants will not want to enter in to such a short term relationship. Many would intend expending large sums of money on upgrading the premises. A short term agreement would not give him sufficient time to recoup the investment.
To get over this time period, over the years many mechanisms were used - forms of licenses where the Tenant would not in fact vacate the property or, alternatively, the premises would be closed but not vacated by the Tenant. These mechanisms have been found to be faulty in the Court. There are a number of ways in which a Tenant may operate for periods in excess of five years:-
- To have the Tenant vacate the premises entirely, including all equipment from the property for a period of time before allowing the Tenant to return to it for a further period of four years and eleven months.
- There is one other exception provided for under the Act - a Lease made for the temporary convenience of the Landlord or Tenant. This provision had been largely overlooked by the profession in recent times. When it was first passed in 1980, it was used as a mechanism by Solicitors in every Lease - whether there was a genuine convenience or not. Courts then struck down many agreements with a clause included and it fell into disuse. However, the provision is still there and provided a genuine convenience is being met, it acts as a bar on any Tenant acquiring a business equity.
- Agreements for periods greater than five years.
Often Landlords actually want a long term relationship with the Tenant - for example, shopping malls or general commercial property, etc. Therefore, a 21 or 35 year lease is utilised, which is effectively renewable ad infinitum. In respect of leases granted after 10th August, 1994, the general rule is that if a tenant of business premises has been in continuous occupation for the five years immediately prior to the expiry of its current lease of the premises, that tenant acquires a statutory right to call for a further lease of the premises at the end of its current lease.
The further lease will be for a term, at the tenant's option, of not less than five and not more than twenty years but the parties may agree to a shorter or longer term. In general, it is not possible to contractually bind a tenant to waive its statutory right to call for a further lease.
There are two important exceptions to this rule. Firstly, to facilitate landlords in granting leases in the IFSC, tenants in the IFSC who have been in occupation of premises for five years or longer, do not acquire a statutory right to call for a further lease. Secondly,in respect of tenancies of office premises granted after the 10th August, 1994, the tenant may, prior to taking a lease, agree to waive its statutory right to call for a further lease.
The parties can agree between themselves the provisions of the further lease. As the right to choose the term of the further lease rests with the tenant, the term will often be for a period of five years or maybe for a longer period but with options to break the lease on the tenant’s part.
If the parties cannot agree the terms of the further lease, the tenant can apply to the Courts to have the terms agreed and if it delays in doing so then the landlord has the option of making the application to Court. The Court has power to fix the terms of the new lease, including the rent (which will be fixed at the current open market rental value of the premises) and the parties are entitled to have the rent reviewed every five years thereafter. The rent, in these circumstances, can be reviewed on an upwards or downwards basis, depending on market forces at the time of the review.
Landlord and Tenant legislation implies certain covenants in leases and also impacts on a number of covenants which landlords normally succeed in negotiating into leases. These include covenants against disposal, change of use and the carrying out of improvements, all of which are subject to implied statutory provisions that a landlord's consent cannot be unreasonably withheld. The onus of proving that consent is being unreasonably withheld lies with the tenant.
A provision in a lease which seeks to impose the landlord's legal costs on the tenant will be void and therefore both parties must bear their own legal costs in any leasing transaction. This however would not apply to reasonable legal expenses incurred by a landlord in giving consent to such matters as applications for consent to disposal or change of use. Where the landlord's consent to assignment is required and a tenant, having obtained such consent, transfers his interest under a lease to a third party, that tenant is normally relieved of his obligations under the lease and the incoming tenant becomes liable to the landlord for the performance of the covenants in that lease.
This is different from the position in the U.K. where the original tenant remains liable in contract to the original landlord for the duration of the term. Certain formalities require to be observed in connection with the granting of the landlord's consent.
Domestic Lettings
This area has been drastically and comprehensively revised by the recent Residential Tenancies Act 2004. These relate to lettings of a domestic house. This Act provides for the implementation of reforms of the private rented sector recommended by the Commission on the Private Rented Residential Sector and accepted by the Government.
It introduces a measure of security of tenure for tenants, specifies minimum obligations applying to landlords and tenants. The establishment of a Private Residential Tenancies Board is used to resolve disputes arising in the sector, operate a system of tenancy registration and provide information and policy advice. The Act also contains provisions relating to rent setting and reviews and procedures for the termination of tenancies, including gradated notice periods linked to the duration of a tenancy.
There are some consequential amendments to the existing landlord and tenant code. Part Two specifies explicit obligations that apply to landlords and tenants of all tenancies regardless of whether or not there is a written tenancy agreement. In relation to the maintenance of rented dwellings, it imposes an explicit requirement on landlords to maintain the structure of the building and to maintain the interior to the standard that applied at the commencement of the letting.
There is a corresponding responsibility on the tenant to remedy any disrepair (other than normal wear and tear) attributable to the tenant’s acts or omissions. The obligations applying to tenants include a prohibition on anti-social behaviour. There is an explicit onus on landlords to enforce tenant obligations. Failure to do so will enable another party, who can show that he/she is adversely affected by a tenant’s non-compliance with the tenancy obligations, to refer a complaint to the Board concerning the landlord’s failure to enforce. Landlords are prohibited from penalising tenants who have referred a dispute to the Board.
Section 12 lists explicit tenancy obligations applying to all landlords. These relate to allowing the tenant to enjoy peaceful and exclusive occupation, carrying out repairs, insuring the dwelling, providing a point of contact, refunding deposits and reimbursing tenants for expenditure on repairs that were appropriate to the landlord. Certain responsibilities of management companies of apartment complexes with regard to complaints are also specified.
Section 13 enables the Private Residential Tenancies Board (the Board) to make regulations, where considered appropriate, specifying what parts of a dwelling constitute the structure or interior for the purpose of section 12.
Section 14 prohibits landlords from penalising tenants who have referred a dispute to the Board or from penalising those who make a complaint to a public authority or to the Garda Siochana.
Section 15 imposes a duty on landlords to enforce the obligations of a tenant so that a third party directly affected by a failure to do so may refer a complaint to the Board under section 77.
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