How landlords can be proactive in Irish lease renewal rights

In the Irish real estate landscape, staying informed and proactive is essential for all types of landlords, especially when it comes to lease renewal rights.

The 2024 Irish Circuit Court case of Howard and Ors v Crown Paints Ireland Limited serves as a pivotal example of why this is so crucial. This article provides a brief overview of the case, examines the court's findings and, most importantly, discusses the future implications for landlords.

Howard and Ors v Crown Paints Ireland Limited [2024] IECC 10

The case of Howard and Ors v Crown Paints Ireland Limited highlights the importance for landlords to be proactive in relation to lease renewal rights.

Case background 

Crown Paints (the defendant) was a tenant of Howard & Ors (the landlord) at a premises on Malahide Road, Coolock, Dublin. The defendant's lease expired on 12 August 2018; however, they continued to occupy the premises and pay rent as per the expired lease. The defendant served a Notice of Intention to Claim Relief under the Landlord and Tenant (Amendment) Act 1980 (1980 Act), though the parties could not agree on the terms of the new tenancy, leading the landlord to issue a Landlord & Tenant Civil Bill in June 2019 to determine the terms of the new tenancy.

The tenant continued to pay the rent as per the terms of the expired lease. The case had not yet been decided when the tenant withdrew its claim to a new tenancy and vacated the premises on 31 December 2022.

Landlord's claims 

Howard and Ors argued for a purposive interpretation of Section 28 of the 1980 Act, suggesting that recoupments / readjustments of rent should be allowed even if the tenant withdrew their claim. The landlord sought the difference between the market rent and the rent paid from August 2018 to December 2022.

Alternatively, the landlord proposed that a new tenancy should be deemed to exist or that the doctrine of estoppel should apply, preventing the tenant from avoiding the payment of market rent in this intervening period.

Defendant's arguments

The defendant contended that rent readjustments under Section 28 of the 1980 Act are only applicable if a new tenancy is granted. They also argued that withdrawing the claim for a new tenancy was within their rights and not an abuse of process.

Court's decision

The Irish Circuit Court ruled in favour of the tenant, stating the 1980 Act does not obligate tenants to accept a new tenancy or pay market rent retrospectively if they withdraw their claim. The fact stands that the Court can only impose market rent if fixing the terms of a new tenancy, which was not applicable as the tenant withdrew the application.

Potential for misuse 

In theory, this decision could be open to misuse by tenants wishing to remain in situ while paying the same rent after a lease expires. However, the Circuit Court noted this potential misuse but found no evidence of abuse of process in this case.

Key takeaways for landlords

This case underscores the need for landlords to promptly settle tenancy renewal terms. If terms cannot be agreed upon, landlords should swiftly seek court intervention to avoid uncertainty. Learning from this case can help landlords effectively manage lease renewal rights and protect their interests.

How Ogier can help

At Ogier, our Real Estate team in Ireland is highly experienced in navigating these complexities and can provide the proactive legal support necessary to protect your interests as a landlord.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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