Opposition parties have called on the Government to urgently introduce measures to allow for a downward review of commercial rents on existing leases.
Fine Gael and Labour said high commercial rents were leading to the closure of many businesses in retail sector
Labour leader Eamon Gilmore told the Dáil that many retailers are locked into leases negotiated the height of the property boom, and “now their backs against the wall in the current climate.”
Mr Gilmore said the retail sector had been particularly badly hit by job losses, and a measure to alleviate high rents would help enormously to save jobs and get people back to work.
The Labour Party has tabled a Private Members’ Bill to allow for a downward revision of commercial rents.
But Taoiseach Brian Cowen said the Government had received legal advice that it was not “constitutionally valid” to interfere with contracts in this way.
Mr Cowen said: “Wholesale interference with existing lease arrangements, which are essentially matters of private contract between private parties, is not a feasible option.
“It is also clear that any move to impose a rent freeze across the board would be impossible to implement in a constitutional manner.
The advice received from the Office of the Attorney General is that real, legal and constitutional difficulties would arise if property rights were to be affected respectively,” he said.
"But Mr Gilmore said it was remarkable that every time a positive proposal was presented to the Government which is designed to protect jobs, the Government always seems to have a reason “why it can’t be done”.
He said his party had received its own legal advice, suggesting it is constitutionally possible to introduce such a measure. Mr Gilmore said the Government did not seem to have any constitutional difficulty when it decided to establish Nama.
“The Government wraps itself in the Constitution when it comes to protecting the interests of landlords and some of these property developers that have got us in this difficulty in the first place.”
Earlier Fine Gael justice spokesman Charlie Flanagan his party wanted to see the introduction of new measures that would allow businesses to apply to court for rent reviews in exceptional circumstances.
“This would afford greater protection to businesses and greatly improve the prospects of people staying in employment. It is critical that dialogue between landlords and tenants be facilitated,” Mr Flanagan said.
A ban on upward-only rent reviews came into effect at the end of last month, but at present it applies only to new leases.
Commercial rent reviews in existing leases is to be examined by a working group established yesterday by Minister for Justice.
The group, which will report by the end of June, has been asked to focus on the arbitration process and the adequacy of information available regarding commercial rent reviews.
