Rent Abatement

In December 2011, NAMA introduced a rent abatement initiative to deal with cases where commercial tenants of its debtors could demonstrate that the rents payable under their current leases were in excess of market levels and, as a result, that the viability of their businesses was threatened.

NAMA approved rent abatements with an annual aggregate value in excess of €25 million and long-term rent reliefs, including in a number of Examinership cases, worth over €40 million over the life-time of the related leases.  The aggregate value of abatements agreed is the rent due to NAMA that it agreed to forego in order to help businesses to survive.

The objective of agreeing rent abatements in the first instance was to support the short-term viability of small and medium businesses around the country which were intrinsically viable but which were experiencing difficulties arising from economic conditions.

Facts & Figures

  • Rent abatements with an annual aggregate value in excess of €25 million

  • Worked with debtors & receivers to help retail SMEs

  • Over €40 million in long term rent relief

In cases where there was genuine hardship which could be ameliorated by rent abatement, NAMA achieved two significant benefits. Firstly, it helped to preserve the value of the collateral supporting NAMA loans by ensuring that tenants remained in business and continued thereby to generate rental income. Secondly, it safeguarded jobs and economic activity in general. Any short-term loss of rental income arising from rent abatement is likely to be more than offset by these long-term benefits. The terms of NAMA’s Guidance Note on Upwards Only Commercial Leases were not designed to confer benefits on businesses that are trading profitably or are part of trading groups that are in a position to honour their contractual arrangements on rent.

Guidance Note on Upward Only Rent Reviews