Statutory Renewal Rights
An interesting case came before His Honour Judge John O’Connor in Dublin’s Circuit Court on 23 July 2024 regarding the withdrawal by a tenant of their statutory renewal rights.
In this case, the tenants’ ten-year lease expired in August 2018, and they served the required notice of intention to claim a statutory renewal. The landlord and the tenants failed to reach an agreement on the terms of the renewal, so the landlord commenced legal proceedings in June 2019 to enable the court to determine the new tenancy terms.
From the date of the old lease expiring, the tenants remained in the property and continued to pay rent in accordance with the terms of the old lease that had expired. Under the relevant legislation the tenants were entitled to remain on the property under the terms of the old lease until the new lease was agreed.
In November 2022, the court case had not yet been heard but the tenants informed the landlord that they were withdrawing their statutory claim to a new tenancy, and they left the property on New Year’s Eve, 2022.
The question then before the court was whether the tenants were entitled to continue paying the old rent from the time their lease expired to the time, they left the property? The landlord claimed that the tenants should pay the market rate and argued the market rate would be a significant increase on the old rent.
The tenants argued that they were entitled to pay the rent under the old lease.
The judge ruled that the only statutory basis to allow a court to impose the market rent during the lapsed period would be if the Court were fixing the terms of a new tenancy – as that application had been withdrawn, that could not be done and accordingly the court found in favour of the tenants.
Landlords would be advised to take legal advice on such commercial leases as a tenant could take advantage of the legislation by staying on in a property for a longer period at a price below the market rate by the issuing of the statutory notice and then withdrawing it. In the case above there was no evidence of such actions by the tenants but it could be open to abuse by others.
Howard and Others v Crown Paints Ireland Ltd [2024] 10 IECC 10.
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