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Upward only rent reviews - please explain

  • 05-01-2011 3:52pm
    #1
    Rabidlamb
    Banned (with Prison Access) Posts: 2,202 ✭✭✭


    Can someone explain to me what the logic was of these clauses attached commercial leases.
    What was the imperative at the time to allow such a market unfriendly stipulation ?.

    Also, can these & are these clauses broken with the reality of today's market ?.


Comments

  • #2
    Treehouse72
    Registered Users, Registered Users 2 Posts: 1,003 ✭✭✭Treehouse72


    If I sat here and thought about it for a thousand years I wouldn't be able able to work out wtf upward only rent reviews were all about. Not on any level. Totally unfathomable.

    And it's not only their existence - the very concept of them - that I can't understand. It is also the absolute numbers. Here's a story from the IT in March 2010:
    ABOUT 100 of the 120 traders in Dundrum Town Centre in south Dublin are facing rent increases of up to 60 per cent when the first five-year review gets under way in the coming weeks.
    http://www.irishtimes.com/newspaper/commercialproperty/2010/0303/1224265484904.html

    So if that was a 5 year review in 2010, it means the original rents were set in 2005, which was near the height of the bubble. And surely we must believe those 2005 rents were at full-on bubble levels (i.e. absolutely top dollar). So how in the name of God can these businesses bear 60% more in 2010?

    The whole thing is quite simply incomprehensible.


  • #3
    snubbleste
    Banned (with Prison Access) Posts: 31,117 ✭✭✭✭snubbleste


    Simple. Guaranteed income stream for the landlords of these premises.
    It is not illegal


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