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Bewleys wins ''upward only rent' challenge in High Court - rent must fall to 'market value'


Grumpy Jack

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Breaking news from the High Court on RTE and Irish Independent website.

From Indo:

BEWLEY’S cafe has secured a landmark victory to stop its landlord hiking the rent again.

The famous Grafton Street restaurant sought to prevent any increase on the €1.5m a year imposed at the peak of the property bubble in January 2007.

Mr Justice Peter Charleton ruled that the rent must be allowed to drop to a level to reflect the state of the market.

It is estimated to be half of what it was set at five years ago.

The Dublin building is owned by Ickendel Limited, a property company controlled by the developer Johnny Ronan.

Bewley
And on RTE:

A High Court judge has ruled that the rent payable by Bewley's Oriental Café in Grafton Street, Dublin, to its landlord, must be allowed to fall in line with the currently depressed open market rate.

The restaurant's landlord, Ickendel Limited, which is owned by Johnny Ronan's Treasury Holdings Group, had claimed it was entitled to a five-yearly upwards only rent review.

Court rules in favour of Bewley's rent reduction - RTÉ News
Obviously it will be down to the terms of individual leases but this ruling could have massive implications for landlords and businesses alike - and get the government off the constitutional hook it finds itself on.
 

Aindriu

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This is fantastic news and very much needed! The idea of upwards only rent was crass from the start.
 

Analyzer

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I expect Gimmemore to claim the credit.
 

ger12

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But I thought FG/Lab said this wasn't possible?
 

gijoe

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Hold your horses there lads. The lease for this property does not seem to have been a standard lease and the wording may differ. So it may have not have general applicability. But none the less it might open the door to a case on the standard leases.

PS I have always believed that the Courts would not take the conventional interpretation of the upward only rent review clause as being upward only from each 5 year review, but upward only from the initial 5 year rent.
 

Disillusioned democrat

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Maybe this opens the door to a few more "upward only" policies, like rates, tax rates, politicians' pensions, etc.

Who knows, it may be the start of a journey to being competitive again.
 

NewGoldDream

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Is this because the High Court has waded into general Landlord and Tenant Law and decided to interfere with contracts and strike down provisions it feels are unfair...or just based on the wording of this particular arrangement? If the latter...pffffffft.
 

H.R. Haldeman

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This isn't going to change anything. From the RTE link above:

However, an open market clause in the agreement could only reasonably be construed so as to allow for a fall in rent which had increased to €1.5m because of upwards only reviews since 1987.
Unless other businesses have an "open market clause" this judgement won't be applicable. And most businesses don't have such a clause.

It should also be noted that NAMA oppose changes to upward only rent reviews on the basis that it would harm their book and ability to offload it to investors. Which is yet another instance of the greater national good being stymied by State institutions. Absolute joke.
 

Analyzer

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Maybe this opens the door to a few more "upward only" policies, like rates, tax rates, politicians' pensions, etc.

Who knows, it may be the start of a journey to being competitive again.
+1.

Good call. I would add state quangos, semi-quangos (organizations not owned by the taxpayer, which are very adept at sucking out of the taxpayer), and the taxpayer owned banks.
 

Analyzer

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Nemesiscorporation

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Breaking news from the High Court on RTE and Irish Independent website.

From Indo:



And on RTE:



Obviously it will be down to the terms of individual leases but this ruling could have massive implications for landlords and businesses alike - and get the government off the constitutional hook it finds itself on.
This is brilliant news.

It will allow people to start forcing changes to rental agreements that are insane.

Some business's have had to close due to the insanely high rental charges, especially those charged at ports to fisher people.

This could actually help create a situation whereby some business's can get some breathing space and allow them to survive.

Hopefully this can be replicated on a wider scale.
 

Orbit v2

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They lied.
I don't think so. In this case, it seems the rent could not fall below the initial level set, but an upward only means the rent can never be decreased, at any review.

The best to hope for, from this, is that there are many other similar contracts which people thought were upwards-only, but actually aren't
 

Keith-M

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But I thought FG/Lab said this wasn't possible?
Just shows you the quality of the legal advice they are getting. Let's not forget the Children's Referendum debacle. Either that or they were just too damn lazy. Both are equally plausible.

One has to wonder what could have been achieved on bailing out the bondholders and the promissory notes, where the government also told us that nothing could be done.
 

wombat

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I don't think so. In this case, it seems the rent could not fall below the initial level set, but an upward only means the rent can never be decreased, at any review.

The best to hope for, from this, is that there are many other similar contracts which people thought were upwards-only, but actually aren't
Sounds like good news for Bewleys, I wonder will the landlord appeal?
 

Rural

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It's great news. I never understood why upward rents were possible in the first place.
 
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