Commercial Lease Ireland (Landlord and Tenant Acts)

Legally, a commercial lease is a lease of land used wholly or partly for carrying on a business. Irish law does not demand a deed for every letting, since section 63(d) of the Land and Conveyancing Law Reform Act 2009 preserves tenancies not required to be by deed, but a commercial lease of any length is executed as a deed in practice, and section 64 sets the formalities, namely a document described as a lease, signed by an individual in front of an attesting witness or executed by a company under its common seal, and then delivered. It differs from a licence, which allows use of space without exclusive possession, and from a residential tenancy governed by the Residential Tenancies Act 2004 and the RTB. Business premises sit outside that system, which is why our Irish property and tenancy templates treat the two separately.

Two models dominate in practice. On a full repairing and insuring lease of a whole building, the tenant repairs everything, roof and structure included, and refunds the insurance premium. Where the premises are a unit in a larger building, the landlord keeps the structure and common parts and recovers their cost through a service charge expressed as a percentage. Both models are built into the template, which is signed in two parts, a lease and a counterpart.

The statute that matters most is the Landlord and Tenant (Amendment) Act 1980. Under section 13(1)(a), as amended in 1994, a tenant whose premises have been continuously occupied by it or its predecessors for five years and used for business acquires the business equity: the right to a new tenancy. If terms cannot be agreed, the Circuit Court fixes them, and section 23(2) sets the duration at twenty years or a shorter term nominated by the tenant. The revised text of the Landlord and Tenant (Amendment) Act 1980 shows every amendment in context. The only way to exclude that right is a renunciation under section 17(1)(a)(iiia), substituted by section 47 of the Civil Law (Miscellaneous Provisions) Act 2008: the tenant must renounce in writing and must have received independent legal advice about it. Any other attempt to contract out is void under section 85.

Beyond renewal, the 1980 Act limits what a landlord can refuse. Sections 66, 67 and 68 turn absolute bans on assignment, change of use and improvements into covenants requiring consent, which cannot be unreasonably withheld. For rent, section 132 of the Land and Conveyancing Law Reform Act 2009 applies to business leases entered into since 28 February 2010, unless the agreement for that lease was signed before that date: a review clause is read as allowing the rent to fall, rise or stay the same, whatever the lease says. Section 16 of Deasy's Act releases a tenant who assigns with written consent from future breaches.

Two tax rules and one reporting duty follow. Stamp duty on a lease of up to 35 years is 1% of the average annual rent, payable within 44 days of execution. A letting is exempt from VAT unless the landlord opts to tax under section 97 of the Value-Added Tax Consolidation Act 2010. Finally, section 88 of the Property Services (Regulation) Act 2011 requires the tenant to notify the PSRA within 30 days of receiving the stamp certificate.

The obvious trigger is a new letting: a vacant shop, a café operator who wants it, and heads of terms that now need to become a signed commercial lease. The same applies when a growing firm moves into an office suite in a multi-let building with a service charge. Landlords letting to a newly formed limited company use the guarantor option, because a fresh company has no trading record and the director's guarantee is the real security, and a director taking on that exposure often reviews his or her own affairs with our personal and family legal templates. Our company and contract documents for Irish businesses cover the rest of that paperwork.

Renewals are the second big category. When a five-year lease expires and the tenant stays on, a new deed with a fresh renunciation is far safer than informal holding over, because occupation without a deed keeps counting towards the business equity. Short lettings belong here too, since a two-year term renewed twice can quietly cross the five-year line.

One edge case comes up with mixed buildings. A flat let to someone other than the trader is a separate residential tenancy under the Residential Tenancies Act 2004, while living space used for the business can fall outside that Act under section 3(2)(a). Our lease prohibits residential use altogether, so any flat upstairs should be let under its own agreement. Once the premises open, the tenant will usually need employment contracts for the staff it hires as well.

• Renewal rights are handled first, because they decide what happens when the term ends: the tenant either renounces them through an annexed deed carrying its solicitor's certificate, or keeps them with the section 20 notice procedure explained.
• Rent can stay fixed, follow the open market or track the Consumer Price Index. A market review goes to an independent chartered surveyor acting as an expert, and downward reviews are expressly allowed.
• Under the repair clause, a whole building can be let on full repairing or internal repairing terms, while a unit in a larger building carries internal repair plus a certified service charge with a budget and a year-end statement.
• Insurance stays with the landlord, the tenant refunds the premium, and rent is suspended for up to three years if the premises become unusable, with the same protection for uninsured damage.
• Alienation and forfeiture follow the statutes, and the break is kept simple: consent not unreasonably withheld under section 66, a tenant or mutual break whose only conditions are paid rent and vacant possession, and re-entry subject to a section 14 Conveyancing Act 1881 notice and to relief.

You start by saying whether the landlord and the tenant are individuals or companies; a company is identified by its CRO number. Next come the premises: the address with its Eircode, a plain description, the permitted use and whether the space is a whole building or part of a larger one. That answer switches on the service charge clause, or asks you instead who repairs the roof and structure.

The term follows, with start and end dates and the length in words. The rent screen asks for the yearly figure excluding VAT and a rent commencement date, which records a rent-free period without extra drafting. You then choose quarterly or monthly instalments, the type of review and its interval, a deposit, the VAT option and any break clause. The preview renumbers the clauses as you answer. When you click Finish, the commercial lease is ready to download, and the rest of our full range of Irish legal documents works the same way. The renunciation deed must be signed only after the tenant's own solicitor has advised the tenant on it.

The costliest mistake is a renunciation signed without real independent advice. A tenant who initials the deed in the landlord's solicitor's office has an argument that the renunciation fails, and the landlord loses the protection it thought it had. Close behind is letting the tenant into occupation before anything is signed, since every month counts towards the business equity. Landlords also still draft upward-only reviews out of habit, then discover at the first review that section 132 rewrote the clause.

Tax deadlines cause the next problems. Missing the 44-day stamp duty window brings surcharges and interest, and ignoring the PSRA notice is an offence. Opting to tax without checking whether the tenant can recover VAT backfires quickly, because a bank, insurer or medical practice recovers little or none of it. Break clauses with heavy conditions are another trap, since a tenant owing a small sum on the break date can lose the right to leave. Check, too, that the start date, end date and length in words match before anyone signs a commercial lease.