Problems for Landlord with Tenant Lease renewal claim

The Landlord and Tenant (Amendment) Act 1980 (“1980 Act”) as amended sets out that, all things being equal, a statutory right for a Commercial Tenant to claim a Lease renewal where it has been in occupation for 5 years or longer.

One feature of this law is that the Tenant can nominate the length of the term of the renewal, from 5 – 20 years. It is of course open to the landlord and tenant to agree a shorter or longer term. Another feature is that the terms of the new lease, in particular any change to the market rent (upwards or downwards from the old rent) will, once the new lease is grated, take effect from the expiry of the old lease.

On 23 July 2024, the Circuit Court (Judge O’Connor) in the case of Howard and others v Crown Paints Ireland Limited (the ‘Crown Paints case’) had to decide whether a Landlord was entitled to recover the difference between the “old rent” and a higher “market rent” from the date of the expiry of the old lease until the date when, before the Court hearing to establish the terms of the new lease claimed by the Tenant, the Tenant in fact withdrew its claim.

The Court decided, for a variety of reasons, but especially in the absence of evidence that the Tenant’s claim for a new Tenancy was an abuse of process, that although it could order the Tenant to pay costs to the Landlord (it deferred submissions by the parties on this issue to a later date), it could not order the Tenant to pay the Landlord anything over and above the “old rent” from the date of the expiry of the old lease.

If nothing else, this decision should spur landlords to examine the bona fides of a tenant claiming a lease renewal, and to press on to seek an early hearing of proceedings to determine any outstanding issues regarding the entitlement to or the terms/rent of that new lease.