On the 31st October, 2013, the Minister for Justice, Equality and Defence Alan Shatter welcomed the publication of the commercial leases database ("Database") by the Property Services Regulatory Authority ("PSRA") pursuant to Section 87 of the Property Services (Regulation) Act, 2011, ("2011 Act"). The 2011 Act made provision for the establishment of the PSRA in order to ensure that all property service providers and property transactions operate in a controlled, regulated and transparent environment. The Database is publicly available on line which provides relevant details of letting agreements and rent reviews as required under the 2011 Act.
Tenants of commercial properties who have entered into a lease since the 3rd April, 2012, are obliged pursuant to Section 88 of the 2011 Act, to complete a commercial lease return form ("Form") within 30 days immediately following the day on which a stamp duty certificate is received by or on behalf of the tenant from the Revenue Commissioners. The Form is available from the PSRA website www.psra.ie. When completing the Form the tenant is obliged to include the following:-
- the commencement date of the term of the lease;
- any capital consideration (if any) paid by the landlord or the tenant;
- rent review(s) if any;
- liability for the rates, insurance, service charges and repairs in respect of the premises;
- the net floor area per each floor of the premises;
- any capital contributions, concessions, rent free periods, allowance for fit-outs or any inducements;
- any break clauses;
- the certificate identification number of the stamp duty certificate; and
- any other particulars that may be prescribed by the regulations under the 2011 Act.
The tenant is obliged in accordance with Section 88(2) of the 2011 Act, within 30 days of the determination of a rent review to notify the PSRA in a specified form of the particulars of the rent review, any variations carried out to the lease during or for the purposes of the rent review or such other particulars as may be required by the regulations pursuant to the 2011 Act. Also, when a tenant ceases to have an interest in a lease (which is usually due to the expiration of the lease, by validly exercising an option to break, the assignment of the lease or the agreed surrender of the lease) then the tenant is obliged pursuant to Section 88(3) of the 2011 Act within 30 days of the date that the cesser takes effect to notify the PSRA in a specified form detailing the particulars. The aforementioned forms in relation to rent review and notification of cesser are not yet available from the PSRA but it is anticipated that they shall be made available in due course.
Failure to comply with Section 88 of the 2011 Act may result in fines up to €5,000.00 and/or imprisonment.
The introduction of the Database is advantageous to both landlords and tenants as it provides them with accurate information on current market rents and rent reviews and allows them to negotiate heads of terms which are fair and reasonable to both parties and in keeping with market conditions. The obligation to ensure that all information in side letters which generally documents rent free periods, concessions, capital contributions, and in some cases break options, form part of the Database is key to ensuring that correct lease terms to include the market rents are made available. The Database is a welcome mechanism to hopefully secure greater transparency in the commercial rental market.
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