1. Any landlord and tenant can agree any type of rental /lease agrement that they wish.
There is no nor never has been any obligation for the parties to sign any agreement that contains upward only rents.
2. However, it is a fact that most leases until recently were a standard agreement that did contain the clause that rents would increase every xyz (usually five, sometimes 3,4, and very rarely 6,7) years.
3. In these contracts it was NOT usually possible for a tenant to escape from the agreement, except if a "break-clause" was inserted, meaning that after a numbr of years -usually 5 or 10 ,sometimes unspecified with reasonable notice, the tenant could leave.
This type of break clause was insisted on by bigger,well-known tenants that the landlord was eager to have.
4. Today in new agreements the upward -only rent clause is a thing of the past. No landlord is insisting on ,nor any sane tenant agreeing to sign such a condition.
I think -but am not sure -that the law has changed so that such a condition cannot be enforced in new contracts.But I mmay be wrong on that. In any case no tenant would ever sign such a contract nowadays.
5. However, on all contracts existing prior to the change in the law the condition is still legally binding. A landlord can insist that the rent can increase - though I've heard cases where this can be as little as one cent in view of the real situation on the ground today.
I've also heard that many wise landlords are ignoring this condition and coming to sensible agreements with the tenant.
Bluntly, most landlords are seeing what is happening and not insisting on rent increases and ,indeed, reducing the rent, regardless of what is says in the contract.
6. The problem is mainly confined to those landlords that are not human beings but corporations,pensions trusts ,whatever. They have a contract signed in, say, 1990 and in this legally binding contract the landlord expects an increase of XYZ and certainly no decrease.
It's the whole basis of the investment- as far as they are concerned it was a steady good investment for their clients.
These blind pension funds and other corporate landlords do not understand that sticking to the letter of the contract results in bankrupt tenants and thus , eventually, no rent.
7. So why did tenants agree to sign such contracts thus binding themselves for 35 years with ever upward rents ?
Well, I rented a dozen premises between 1980- 2009. Some were,at the time, very desireable locations like the Square Tallaght. Tenants would have agreed to forgo a pound of flesh every rent review to stay in the best centres.
We thought -at the time rightly - that we could easily sell the lease onwards if our business failed. (such sale of leases are and were always allowable in the contracts with some restrictions). Indeed, many of sold the elases at a profit. to those eager to move in to such-and-such a location.
There was no internet, retail was a sure and steady living. Why not sign to get a good location? Upward only rents ? No problem!
Unfortunately, the big landlords have not copped on to the fact that everything has changed. Retail outlets are closing everywhere,regardless of the size and reputation of the retailer. And yet those big landlords are still sticking to enforcing contracts that have no relationship to today's reality.
(on a personal note,besides our own premises, my wife and I were made directors of a large tour operating firm that opened thirty retail outlets in the late 1990s and thus we had great experience of such leases from small rural towns to big centres in bigger cities.
My knwoledge of the law since 2009 is hazy.The above was just a background of how/why such things happened in commercial contracts).