CBRE has said a Dublin court ruling will lead to greater scrutiny of documentation for leases that incorporate upward-only rent review provisions in Ireland, but the implications will be limited.
CBRE has said a Dublin court ruling will lead to greater scrutiny of documentation for leases that incorporate upward-only rent review provisions in Ireland, but the implications will be limited.
The property adviser was commenting on a High Court judgment involving a rent review for Bewley’s Café on Grafton Street in Dublin's city centre.
A High Court judge ruled that the rent review on the premises remains upward only from the date of the original lease grant in 1987 as opposed to the most recent review date.
Marie Hunt, executive director at CBRE Ireland: 'Many landlords of properties that are subject to upward only rent reviews and intending investors are rightfully questioning today’s ruling, fearing that rents on leases with upward only rent review clauses will now revert to open market value as a result of this judgement.'
'However, it is important to point out that there are unique circumstances in this particular case given the specific wording of the review clause, which will not necessarily apply in other leases. This ruling highlights the importance of the drafting of specific clauses in leases and will undoubtedly lead to more scrutiny of lease documentation going forward.'
