Recent Change in Law affecting Landlords and Tenants

(11 Feb 2009)
 

Many Landlords and business Tenants have, until very recently, been obliged to avail of four year nine month tenancies in order to avoid the automatic “right to renewal” that could arise after five years occupation.

This arose in “non-office” business tenancies, often despite the wishes of both parties because the Tenant could not legally “contract out” of its statutory rights. So for example while someone renting a small office could do so a major multi-national Tenant of a substantial retail or industrial unit was unable to contract out of these statutory rights of renewal.

This anomaly has now been overcome by Part 4 of the Civil Law (Miscellaneous Provisions) Act 2008 which came into force on the 20^th July 2008.

This enables the parties to all business tenancies (not just of offices) to contract out of the provisions giving the Tenant the right to a new tenancy. It remains necessary for the Tenant to renounce such rights in writing having received independent legal advice in relation to such renunciation.

Finally this long awaited legislation is good news for both Landlord and Tenant. It will allow them the freedom and flexibility necessary in a modern business relationship.