Government encourages landlords to show businesses forbearance
Thursday,1st October 2020 The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar T.D., alongside the Minister of State for Business, Employment and Retail, Damien English T.D., and Minister for Housing, Local Government and Heritage, Darragh O’Brien T.D. have today published a new voluntary Code of Conduct that has been agreed between landlords and business representatives for commercial renters.
The Code, which is a commitment in the Programme for Government, has been developed in consultation with all relevant stakeholders, including IBEC, Retail Excellence Ireland, Chambers Ireland and Irish Institutional Property (IIP), who manage approximately €14bn of Irish property. It is based on an approach taken in other jurisdictions, including Australia, France and the U.K.
The Tánaiste said,
“I understand this is a difficult time for many, especially those businesses heavily impacted by the crisis who are facing an uncertain future. I know that some firms are concerned about how they are going to continue to pay the rent due for their business premises. Throughout this crisis, the Government has been encouraging commercial tenants and landlords to engage with each other and have asked landlords to show forbearance in these extraordinary times. Ultimately, it’s in the best interest of both parties to come to a reasonable arrangement.
“Nobody wants to see vacant premises in our towns and villages or our shopping centres. Landlords should be willing to do what they can to help their tenants to continue to operate rather than facing the risk of a vacant premises and inability to obtain new tenants. Equally, tenants should pay what they can and speak with their landlord when difficulties arise. The Code sets out how both parties can work together to get through these uncertain times.”
The Code, which will apply until 31st July 2021, sets out a structured approach for engagement between both commercial landlords and tenants, based on their mutual interest in continuing to work together.
The Code sets out a number of principles that both parties should commit to abide by, including transparency and collaboration. The Code asks commercial landlords to provide concessions where they can and where this is not possible, asks them to set out clearly the reasons for this. It lists some of the issues to consider when determining the impact of COVID-19 and the public health restrictions on a business and the need for concession. Where a concession is being considered, the Code provides some suggested options for new arrangements. The Code also suggests that commercial tenants seeking new arrangements should be clear as to why assistance is needed when seeking concessions from their landlord.
Minister of State for Business, Employment and Retail, Damien English T.D., added:
“This is a complex issue and there was broad agreement among stakeholders on all sides that Government could not intervene in the market in a heavy-handed way, but we are conscious some steps needed to be taken to address the impact COVID-19 has had on commercial rents and leases. This voluntary Code of Conduct sets out best practice and will help facilitate conversations between commercial landlords and tenants. It is a common-sense approach to tackling an issue facing many businesses across the country.”
Minister for Housing, Local Government and Heritage, Darragh O’Brien T.D., said:
“The Code, in addition to six- month commercial rates waiver and business supports already available, will provide some practical assistance to commercial tenants and landlords. Firms can also avail of additional business supports such as the enhanced Restart Grant, the new Credit Guarantee Scheme and MicroFinance Ireland Loans where they are experiencing financial difficulties.”