“More than a quarter of all Dublin office space has changed hands in little more than three years, a rate described as “extraordinary”. With these transactions has come an influx of international Institutional investors to Ireland including REITs, pension funds and life assurance companies who are making large scale purchases. There are a number of incentives for foreign investors to buy in Ireland including the low corporate rate, the benefit of EU membership and our common law jurisdiction.
The majority of these foreign investors will become landlords on completion of their purchases if they buy with tenant in situ or subsequently if they have bought in a “buy to let” scenario but how well do these foreign investors actually know Irish landlord and Tenant legislation, if at all?
Below are my top tips for commercial landlords entering the Irish market for the first time:
- Monitor rental payments – keeping track of rent payments at all times during the term is vital. If a tenant begins to enter arrears this may be a sign of trouble ahead.
- Enter into a Rent Deposit Deed – this provides a fund from which the landlord can withdraw sums to cover tenant default. There are several different approaches to the form of rent deposit deed, whether it be tenant’s money charged in the landlord’s favour, or landlord holding deposit on trust for the tenant, or the deposit being held in a stakeholder account.
- Know your tenant - look into the financial background of any prospective tenant to ensure you are getting a good covenant. If the tenant is a company with weak financial status consider getting a parent company guarantee.
- Beak Options – landlord’s need to be clear on their long term plans for their property. Having a break clause within a lease provides the landlord with flexibility throughout the term.
- Rent Review – ensure your lease contains a rent review clause so that your investment reflects market place reality. Typically a rent review is carried out every 5 years. Remember, upwards only rent reviews have been illegal in Ireland since 2010.
- Deed of Renunciation – Irish Landlord and Tenant legislation provides tenants with a number of statutory reliefs, notably the right to renew their lease provided the tenant has continuously occupied the premises for 5 years. If you are a landlord who requires flexibility in relation to your property then getting a tenant to renounce their rights is vital. Make sure your tenant has taken independent legal advice regarding the waive of their tenancy rights or the deed will be invalid!
More than a quarter of all Dublin office space has changed hands in little more than three years, a rate described as "extraordinary."