Our annual "What's Another Year?" bulletin is a snapshot of the key legal and regulatory developments which we can expect over the course of 2024, across a range of sectors and practice areas.
COMMERCIAL LANDLORD AND TENANT
Sub-Letting of Grey Space
As occupiers continue to reassess their space requirements, we expect a renewed focus on sub-letting of 'grey space' in 2024. This will bring the provisions of Section 78 of the Landlord and Tenant (Amendment) Act 1980 back into focus. There has been very little judicial commentary on this section, which provides that where a head-lease is terminated before its normal expiration, any sub-lease will remain in existence with the landlord becoming the landlord of the tenant under the sub-lease and the sub-tenant being required to pay the higher of the sub-lease rent or such portion of the rent reserved by the terminated head-lease as is fairly attributable to the premises.
ESG/Green Clauses in Commercial Leases
The publication in February 2023 of The Chancery Lane Project Irish Working Group's Green Clauses for Irish Commercial Leases (led by Arthur Cox LLP) has spearheaded the incorporation of ESG/green clauses into occupational lease arrangements in Ireland. We expect 2024 to continue this trend with a particular focus on lease parties sharing environmental performance data to enable landlords to monitor and improve the environmental performance of buildings.
COMMERCIAL RATES
A new commercial rates regime came into force on 1 January 2024 via amendments to the Local Government Rates and other Matters Act 2019 (the 2019 Act) introduced by the Historic and Archaeological Heritage and Miscellaneous Provisions Act 2023 (the 2023 Act).
The 2023 Act amends certain sections of the 2019 Act which would have significantly impacted investment property sales by requiring property owners who propose to sell property to pay any unpaid rates before the completion of the sale, thereby purporting to shift liability for rates from the occupier to the owner.
The 2019 Act introduces the concept of the 'liable person' for rates payment purposes and recognises that a person can cease to be and become a liable person. The 2019 Act retains the obligation to notify the local authority of a change in the liable person in certain circumstances.
HOUSING
'Housing for All' Measures
2024 will see further legal measures being introduced by the Government to increase housing availability and affordability. The recent Housing for All Action Plan Update and Q3 2023 Progress Update (see press release) sets out the Government's proposed legislative and systemic measures to increase housing supply and assist residential tenants over the next 12 months.
Regulation of Short-Term Letting
The Government is expected to progress the Registration of Short-Term Tourism Letting Bill (the "Tourism Bill") in the coming months following the decision by the EU to approve (with some modifications) the Government's proposals to regulate short-term lettings.
The Tourism Bill underpins the creation of a short-term lettings register and would require any party offering accommodation on a short-term basis to tourists (21 days or less) to be registered and to hold a valid registration number issued by Fáilte Ireland. The Government is aiming to have the register in place by Q2 2024.
The Tourism Bill, together with the Planning and Development, Maritime and Valuation (Amendment) Act 2022, which will prohibit online platforms from advertising properties in Rent Pressure Zones which do not have the requisite planning permission or which are not exempted development, aims to bring more homes back into the long-term rental market.
Tenant Right to Purchase
The Government approved the General Scheme of the Residential Tenancies (Right to Purchase) Bill (the "Right to Purchase Bill") for priority drafting in October 2023.
The Right to Purchase Bill, if enacted, would, subject to certain exceptions to be set out in the Bill, require a landlord terminating a tenancy on the grounds of intention to sell, to serve a notice inviting the tenant to make a bid on the property during a 90-day period. The landlord would also be obliged to invite the tenant to make a further bid where the landlord has agreed to sell the property to a third party for less than or equal to the tenant's highest offer.
The Bill has not yet been formally published and so is at a very early stage of gestation. Given the potential implications of the Bill for some residential landlords, we expect the Bill to be heavily scrutinised as it goes through the legislative process in 2024.
Residential Zoned Land Tax (RZLT)
RZLT is an annual self-assessed tax calculated at 3% of the market value of land within its scope which aims to encourage residential development. It applies to land that, on or after 1 January 2022, is zoned as being suitable for residential development and is serviced, with certain exclusions.
The Finance (No.2) Act 2023 amends the RZLT legislation to effect the changes to the tax announced in Budget 2024 including:
- the deferral of the first liability date by one year, such that, for land which met the relevant criteria on 1 January 2022, RZLT will first be due on 1 February 2025; and
- the provision of a further opportunity to landowners whose land appears on a draft revised final map to be published on 1 February 2024 to request the relevant local authority to rezone such land.
Accordingly, 2024 will continue to see landowners engaging with local authorities and An Bord Pleanála in the submission, assessment and appeals process around the designation of land as within the scope of the tax as set out in the relevant legislation.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
