Emergency legislation designed to alleviate residential tenancies could also impact commercial leases

A large part of the Emergency Measures in the Public Interest (COVID-19) Act 2020 (Act) enacted on 27 March provides for measures to alleviate pressure on private tenants and affords protection from rent increases and tenancy termination.  Here, Gerry Gallen sets out how it may also affect commercial leases.

A late amendment to the Act (section 5(7)(a)) provides:  “Notwithstanding any of the provisions in this section, all proposed evictions in all tenancies in the State, including those not covered by the Act of 2004, are prohibited during the operation of the Emergency Measures in the Public Interest (COVID-19) Act 2020".

While it is noted that the Dail debates in respect of the amendment were focused on specific rental sectors, such as Rent-a-Room or “digs” style accommodation and local authority tenants, the wording, which refers to the prohibition of “all proposed evictions in all tenancies in the State”, leaves room for doubt in respect of commercial leases.  It is unclear whether a court would plainly interpret this legislation as applying wholesale on the basis of this wording, despite the stated intention of the Act to deal with residential tenancies.

During the present interregnum, commercial property owners should act prudently when deciding on whether or not to terminate a lease.  While a lease termination generally proceeds by way of forfeiture which requires the institution of court proceedings to complete the process, this development, coupled with the rationing of access to the courts, will give owners further reason for caution.

One other point of note is that section 5(7)(a) refers to evictions "during the operation" of the Act, and not just during the emergency period as defined in the Act (currently 3 months).

For more information please get in touch with Gerry Gallen (Commercial Property).

To discuss any other COVID-19 related issues impacting your business, please get in touch with Damian Maloney (Corporate and Commercial), Edward Evans (Corporate & Commercial), Aidan Marsh (Commercial Property), Sandra Masterson Power (Employment), Paul Gough (Employment), Dorit McCann (EU, Competition & Procurement), Fidelma McManus (Housing), Barry Cahir (Litigation and Insolvency), Thomas O'Dwyer (Litigation), Sharon Delaney (Litigation), or your usual Beauchamps contact.