Madam, – Bill Nowlan’s most recent article on upwards-only rent reviews (Commercial Property, March 30th) has spawned a predictably outraged response from David Fitzsimons on behalf of tenants’ vested interests (March 31st). With the results of the latest banks’ stress tests now published, we need to be careful (again) about what we wish for.
When Nama was established the wish at the time was that the long-term economic value criteria which it was mandated to apply in valuing assets should not be used to protect our over-zealous banks from the results of their foolish lending. We now see that the severe haircuts that Nama actually applied are coming home to roost in the form of massive banking black holes, which the taxpayer has to plug.
It is easy to blame lessors’ intransigence for the failure of their tenant’s businesses, but it is at least as likely that these businesses – foolishly established in another era by over-zealous tenants – are no longer viable in today’s Ireland. And high-profile examples of distressed businesses (of which Dundrum tenants, who got special introductory rental sweeteners, are not examples)merely emphasises the maxim that hard cases make bad law.
Leaving aside the fact that nobody is offering our under-pressure, negative-equity lessor classes cuts in their mortgages, abolishing, retrospectively, these clauses (even if that was constitutional) will be paid for by us all.
Even talk of their abolition is making Nama’s job of disposing of assets for the benefit of the exchequer more difficult. If abolition proceeds, the values of saleable assets will fall further and we, the taxpayers, will again pay massively for the foolishness of these over-zealous tenants. – Yours, etc,