The Liberalisation of the Business Tenancy Market
by Orla Begley, Solicitor, Property Department
The Civil Law (Miscellaneous Provisions) Act 2008 came into effect on the 20th day of July 2008 and introduces significant changes to landlord and tenant law. Under section 13 of the Landlord and Tenant (Amendment) Act 1980, a tenant acquires what is known as “business equity” in a tenement where a tenant is in continuous occupation of the tenement for a period of five years for the purpose of carrying on a business. Following this five year period, the tenant is entitled to a new tenancy in the tenement.
The Landlord and Tenant (Amendment) Act 1994 watered down the provisions of the 1980 Act by allowing a tenant, after taking legal advice, to opt out of their statutory entitlement to a further long term lease with respect to office premises.
The 2008 Act has now further extended the tenants right to opt out of their statutory entitlement to a long term lease with respect to all business tenements.
This important legislative change will ease the difficulties experienced by business tenants, who previously faced termination of their leases prior to the expiry of the five year term. In addition, landlords who were traditionally reluctant to enter into business leases lasting a full five years due the build up of the tenant’s business equity rights are now free to grant tenants longer tenancies without the fear of being indefinitely tied to a tenancy.
Overall the legislation modernises landlord and tenant law and generally liberalises the business tenancy market.