Upwards-Only Rent Review Clauses in Ireland: Are They Still Enforceable?

TL;DR

Upwards-only rent review (UORR) clauses are prohibited in Irish commercial leases signed on or after 28 February 2010, under Section 132 of the Land and Conveyancing Law Reform Act 2009. Leases signed before that date remain bound by their original terms. The ban applies only to new leases, not to renewals of pre-2010 leases under their pre-existing terms, and Irish courts have consistently upheld the prospective-only scope of the legislation.

What an upwards-only rent review clause does

A UORR clause allows the rent to be revised upward at the review date if the market has moved up, but prevents the rent from being reduced if the market has moved down. The reviewed rent is set as the higher of the passing rent and the open market rent. For landlords, UORR provides a floor on investment income; for tenants in falling markets, it creates a structurally over-rented position.

The legal position in Ireland

The 2009 Act

Section 132 of the Land and Conveyancing Law Reform Act 2009 provides that a rent review clause in a commercial lease shall not entitle the landlord to require the rent to be revised upwards only. The provision was commenced on 28 February 2010.

Scope

The ban is prospective. It applies to leases granted on or after 28 February 2010 and to agreements for lease entered into on or after that date. It does not apply to leases granted before 28 February 2010, even where a rent review under such a lease takes place after that date. This was tested and confirmed in several Irish High Court decisions, where pre-2010 UORR clauses were held to remain enforceable.

Renewals of pre-2010 leases

Where a pre-2010 lease is renewed under Part II of the Landlord and Tenant (Amendment) Act 1980, the new lease is a fresh lease for legal purposes and the UORR ban applies to its review clause. This means landlords face a substantive change at renewal of pre-2010 leases and should plan accordingly.

What this means in practice

For Irish commercial property in 2026, three categories of lease coexist:

Pre-2010 leases with UORR: the rent only moves up. In falling markets these leases produce above-market rents and are sometimes referred to as 'over-rented' positions. Tenants typically have to wait for the next rent review or lease expiry to re-base rent.

Post-2010 leases: rent moves both up and down on review. Reviews follow the lease provisions, but the rent cannot be artificially propped above market by clause drafting.

Pre-2010 leases renewed under the 1980 Act: the new lease is post-2010 in effect and falls under the ban. This is a material renegotiation moment for landlords.

Can you contract around the ban?

The Section 132 prohibition cannot be contracted out of. Attempts to dress up UORR clauses (for example, by structuring reviews to a hypothetical lease which itself contains UORR mechanics) are unlikely to survive judicial scrutiny and have been criticised in academic commentary.

Strategic implications

For landlords with portfolios containing pre-2010 UORR leases, the lease expiry profile is a critical asset management consideration. Each renewal removes the UORR protection. Capex planning, refurbishment timing and tenant retention strategies should anticipate the rent profile under post-2010 review mechanics.

For tenants in pre-2010 UORR leases stuck in over-rented positions, the realistic levers are: surrender negotiation (paying a premium to exit), break clause execution where available, lease re-gearing (a fresh post-2010 lease replacing the pre-2010 one), and waiting for expiry to renew on post-2010 terms.

Frequently asked questions

Are upwards-only rent reviews banned in Ireland?

Yes, in commercial leases signed on or after 28 February 2010. Pre-2010 leases retain their UORR clauses where these were validly included at grant.

Do UORR clauses still apply to pre-2010 leases?

Yes. The Section 132 ban is prospective and does not retrospectively void UORR clauses in pre-2010 leases. Irish courts have upheld this interpretation.

What happens when a pre-2010 UORR lease is renewed?

The new lease is a fresh lease and falls under the post-2010 regime. The UORR clause cannot be carried into the renewal.

Can a tenant challenge a pre-2010 UORR clause?

The clause itself is legally valid. A tenant's practical remedies are commercial: surrender, break exercise, lease re-gearing, or waiting for expiry. There is no statutory route to retrospective relief.

What is the practical effect on Irish commercial property values?

UORR clauses in pre-2010 leases support income, which can lead to over-rented capital values that compress at lease expiry as the rent re-bases. Asset managers and valuers explicitly model this in their hold-to-exit assumptions.

HPS Real Estate provides rent review, lease consultancy and asset management advisory for institutional investors, REITs, family offices and corporate occupiers across Ireland. Contact info@hpsproperty.ie.