Ireland: Upward Only Rent Review Clauses In Commercial Leases In Ireland - March 2014

Last Updated: 28 March 2014
Article by Simon Hannigan and Katie Joyce

Impact of the prohibition on commercial lease provisions

This note summarises the changes we have seen in commercial leases as a result of the introduction of legislation in Ireland prohibiting upward only rent review provisions in commercial leases entered into after 28 February 2010. In particular, we set out below some of the mechanisms used to avoid the legislative provisions in certain circumstances. Also, we have made reference to a recent High Court case in Ireland in which the Tenant, Bewleys Café, challenged the wording of the upwards only rent review clause in its commercial lease and the courts ruled in favour of Bewleys i.e. that the rent could in fact be reviewed downwards.

The Current Legislation and its Effects

The legislative reform in this area was driven by public policy and the economic downturn. Commercial tenants found themselves struggling to pay high rents, particularly in prime city centre locations, notwithstanding that open market rents and property valuations generally had fallen substantially.

Section 132 of the Land and Conveyancing Law Reform Act 2009 (the "2009 Act") came into force on 28 February 2010. This Section provides that any rent review clause in a lease created after 28 February 2010 will be construed as meaning that the reviewed rent will be an amount which is less than, greater than or the same as the existing rent. In other words, the rent payable under the lease will be revised upwards or downwards in accordance with open market.

The introduction of the 2009 Act has created a two-tier market comprising: (i) legacy leases entered into prior to 28 February 2010 which will continue to have an upwards only rent review clause for the remainder of the lease term; and (ii) leases entered into since 28 February 2010 which are reviewed upwards or downwards on an open market basis. Landlords and Tenants have adopted alternative methods of calculating rental uplifts to dilute the impact of the legislation, as set out below.

Alternative approaches taken by Landlords to circumvent the legislation

The introduction of the 2009 Act has given rise to uncertainty for Landlords in terms of monitoring the future rental income stream from its commercial lettings. As a result and without contravening the legislation, Landlords have attempted to negotiate alternative rental provisions to minimise the effect of the 2009 Act, or at the very least, to retain certainty as to future rental levels, detailed as follows:

Stepped Rent – During the term the parties agree a predetermined upward stepped rent at agreed intervals. This approach is advantageous for Landlords as it provides certainty and simplicity in calculating future rental income. However, it is also rigid and takes no account of increases or decreases in property valuations and market rents.

Indexation Based Review – The parties agree that the rent will be reviewed in accordance with the increase/decrease of a pre-agreed index (e.g. the Consumer Price Index). This index tracks changes in retail prices and alters the rent on review to reflect these changes.

"Cap and Collar" Provisions – The parties may agree what is commonly known as a "cap and collar" provision. A 'cap' limits the amount by which rent can be increased on a rent review and a 'collar' stops the rent falling below a certain level. These provisions are becoming more widely used in recent times.

Turnover Rent – The parties may link changes in rent payable to turnover. This is often used in retail leases where the rent is calculated by reference to the turnover generated by the Tenant with the rent payable often expressed as a percentage of this turnover.  This approach provides the Tenant with greater flexibility and enables the Landlord to monitor the Tenant's performance and take immediate action if performance drops. Similarly, where a Tenant trades above expectations, the Landlord is in a position to take advantage of this rather than waiting for a rent review. The disadvantages for the Landlord are the lack of certainty of the amount of rent payable and the reliance which the Landlord must place on the turnover information from the Tenant.

Shorter Term Lease – A shorter term commercial lease of less than 5 years may be agreed thus negating the necessity for a rent review.

Landlord Triggers Rent Review – It may be agreed that it is the Landlord's option only to trigger the rent review i.e. even if the market rent has fallen, the Tenant is at the mercy of the Landlord as to whether a rent review takes place.

The Bewley's Decision

It is worth nothing that the question of upwards only rent reviews recently came into focus in a 2013 High Court decision of Justice Peter Charleton in Ickendel Limited v Bewley's Café Limited (the "Bewley's Case"). The Bewley's Case concerned the interpretation of the rent review provisions in a 35 year lease that commenced in 1987. Under the terms of the lease, the rent payable by Bewley's Café was to be reviewed upwards every five years.

At the 2012 rent review date, Bewley's Café argued that it was entitled to set a revised rent in line with the current open market level provided that the new rent was greater than the original rent payable at the commencement of the lease in 1987. Justice Charleton agreed with this approach and held that, while the lease did contain upwards only rent review provisions, the baseline rent for the purposes of each rent review was to be interpreted as the initial rent payable at the commencement of the lease, rather than at the commencement of the rent review period.


The new methods of rent review employed by Landlords and Tenants would appear to circumvent the 2009 Act, particularly where a "review" does not occur during the term of the lease. While such rent review provisions have not been before the courts, the 2009 Act does not require commercial leases to contain upwards/downwards rent review provisions, rather it prohibits the use of traditional upwards only provisions. Perhaps the more worrying precedent for Landlords is the recent Bewley's Case. As set out above, this case is under appeal to the Supreme Court and a decision is expected shortly.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.