OWNERS OF THE Bewley’s building on Grafton Street in Dublin are in the Supreme Court today in an attempt to overturn a decision that the Bewley’s rent must be allowed to fall to market value.
Ickendel Limited, which is controlled by Johnny Ronan, argue that the 35-year lease signed in 1987 is reviewed every five years and has increased upwards on each review.
The initial rent in 1987 for the building was €213,000 but this had increased to €1.46 million when reviewed in 2007.
In a High Court case heard a year ago, the court heard that the subsequent review in 2012 was the first in which there was a dispute about whether the review is upwards-only or downwards-possibly.
Justice Charleton had ruled that from 2007 to 2012 there “had been marked deflation in the rental and housing purchase sector” and that “the last rent fixed was at the height of the property price inflation that undermined the Irish economy”.
He further added that there are leases where there is “an express clause making it clear that on review of rent, the sum payable is never to drop”.
“Such a clause, one that in effect copper fastens a meaning… does not appear in this lease,” he had decided.
In essence the fact that that the words “upwards only” do not appear in Bewley’s lease appeared to be a deciding factor.
Two sides
The tenant had argued that the clause in the contract meant that the first rent fixed in 1987 is the base line below which a rent cannot go, but that each rent fixed afterwards was reflective of market value.
Ickendel, whose loans have been transferred to NAMA, accepted that if there is a deflation in property prices the rent would not be increased. The do
The High Court judge accepted that had markets rents increased between 2007 and 2012 then there may be an arumenmt for a rent increase but that in this case rents had “markedly changed for the worse”.
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