I read with interest the suggestions made by The Chamber of Commerce and Enterprise on rent reform, which have prompted me to make this contribution. I attended the meeting at the Chamber which unhappily was poorly attended. I expressed my contrary views in relation to commercial property which I expand upon here.

The White Paper contains two recommendations, 21 and 23, regarding the lease period of commercial property. From these two recommendations three types of lease contracts emerge.

Type 1: Contracts that have an inbuilt mechanism for inducing termination by a rising scale of rent which has reached the top limit before June 1;

Type 2: Contracts as in 1 above, but where the rising scale is still in operation on June 1;

Type 3: Other contracts.

Recommendation 21 states that contracts of Type l will remain in effect for a sunset transition period of 20 years. Contracts of Type 2 will be terminated when the inbuilt termination clause comes into effect. This could happen even after one year from June 1. Contracts of Type 3 are regulated by Recommendation 23 which establishes a limit of termination of 20 years. Naturally parties always have the right to make a contrary agreement.

So contract Types 1 and 3 have been placed in the same category. This is both completely unfair and contradictory to the expressed rationale in the White Paper that the rising scale mechanism (in Type 1 but not in Type 3) was implied to act as an inbuilt termination clause, in the sense that such increase would induce the tenant to return the title to the landlord. This is evident in Type 2, and it is completely discarded in Type 1 contracts. If only for consistency of thought there should be a distinction in the termination period for Type 1 and Type 3 contracts. It is worth mentioning here that in practice this sunset transition period of 20 years could easily be extended to 25 years if the lessee involves the landlord in a lawsuit.

With regard to the transition period of 20 years, this is, to say the least, a further restriction to the property rights of the landlord. There is no reason why this period should be more than five years, as during this period the tenant should find an alternative.

Recommendation 21 produces extremely unjust situations in certain cases. Take the case of a landlord who let property for a 15-year period ending with a rental value three or four times more than the starting rent. Here we have an inbuilt termination clause. If this clause is applied during the sunset transition period of 20 years this will act as a de facto termination of the lease. If, however, the inbuilt termination clause expired, say, one year before the sunset period starts the owner will have to gulp it and wait for all 20 years before he can regain possession of his property. I do not see any way in which this 20-year sunset period - or, for that matter, the 12-year alternative suggested by the Chamber - can be justified. This is just prolonging the agony of the landlord and playing up to the ecstasy of the tenant.

Another important point which does not seem to have been given its due prominence in relation to my contention that a five-year period is sufficient is contained in Recommendation 28.

This recommendation grants the occupant a right of first choice to continue to use the premises in case the landlord, having regained possession, intends to rent the premises. The tenant here would hardly need any transition period, let alone 20 years. It may be said that this situation favourable to the tenant may not arise as the landlord might not have any intention of renting. This is a possibility, though a rare one, but if so it is high time that the principle of ownership and private property is respected.

Another argument against the 20/12 year period is Recommendation 27. This contemplates the case of a sub-lessee. A sub-lessee can only enjoy the property if he is recognised by the owner, and, therefore, it can be said that the sub-lessee steps into the shoes of the tenant. In this case the transition period is of 10 years. Why this difference? This is an explicit acceptance that the 20-year period, or anything like it, is too long.

Having said this, it is surprising that the 12-year period has been mooted when it goes against the interests of the landlord and of those tenants enjoying property with post-1995 contracts. It is equally surprising, once the avowed aim of the process is to incorporate the reform as part of the Civil Code, to create a hybrid lease over 17 years.