The Four Equities
Grounds for Refusal to Grant New Tenancy

Housing (Private Rented Sector) Bill

The Four Equities

A commercial or residential tenant will look to the Landlord and Tenant (Amendment) Act 1980 and the Landlord and Tenant (Amendment) Act 1994 in asserting his or her rights to renew an existing lease. These acts provide that in order to be entitled to a new tenancy beginning on the termination of the previous tenancy, a tenant must prove the existence of one of the four 'equities'.

Business equity
A tenant has a business equity if he or she is in occupation of business premises used wholly or partly for the purpose of carrying on a business for a continuous period of five years immediately prior to service of notice of intention to claim relief.

Long possession equity
A tenant has a long possession equity if he or she has been in continuous occupation of business or residential premises for a period of 20 years immediately prior to service of notice of intention to claim relief.

Improvements equity
A tenant has an improvements equity if improvements have been made on either business or residential premises of which he or she is in occupation and not less than one-half of the letting value of the premises at the time is attributable to these improvements.

Rent acts equity
Sections 14 and 15 of the Landlord and Tenant (Amendment) Act 1980 give certain tenants of both commercial and residential premises who were decontrolled by the Rent Restriction Acts 1960-1967 rights to a new tenancy.

As can be seen, the requirements which residential tenants must meet under the acts if they are to claim the right to renew an existing tenancy puts them in a rather unenviable position as compared to that enjoyed by a commercial tenant, who need only prove five years' continuous occupation.

Grounds for Refusal to Grant New Tenancy

The legislative provisions under which a tenant may lose his entitlement to a new tenancy are also more likely to impact adversely on residential tenants. Section 17(2) of the 1980 act outlines the grounds on which a landlord can refuse to grant a new tenancy to which the tenant would otherwise be entitled. These grounds include where the landlord intends or has agreed to pull down or reconstruct the buildings or any part of the buildings, or where the landlord requires vacant possession for the purpose of carrying out a scheme of development. The relevance of these provisions to a tenant of a private house as opposed to a tenant of a unit in a shopping centre is obvious.

Housing (Private Rented Sector) Bill

Legislation intended to improve the position of residential tenants, in the form of a Housing (Private Rented Sector) Bill, is due to be introduced as a result of the Irish government's acceptance of the findings of a report on the private rented residential sector. The bill is listed in the government's current legislative programme as expected for publication in mid-2002.

In order to provide residential tenants with a greater measure of security of tenure, the bill will grant a tenant whose tenancy has lasted a minimum period of six continuous months, subject to specified conditions, a statutory entitlement to continue in occupation of a dwelling for a period of up to four years from the date of commencement of the tenancy. (For existing tenants, the initial six-month period would commence from a date subsequent to the enactment of the legislation.) During the initial six months, the landlord may terminate the tenancy by giving 28 days' notice, but the legislation will provide that no right to continue in occupation will apply once the notice has been issued before the last day of the six-month period.

The landlord will be entitled to terminate a tenancy at any time during the four-year period (but only in accordance with the terms of any lease that may apply to the tenancy) for the following reasons only:

  • The tenant has not fulfilled his/her obligations under the agreement (eg, has not paid the rent, has not looked after the property properly or has been guilty of anti-social behaviour);

  • The accommodation is no longer suitable to the tenant's circumstances by reference to the number of bedspaces (ie, the number of occupants is greater than the number of bedspaces); or

  • The landlord wishes to sell or substantially refurbish/renovate the property in a way which requires the property to be vacated, or to change its business use, or the landlord requires it for own or family-member occupation.

Successive four-year tenancy periods are envisaged, incorporating at the outset a six-month period during which the landlord may terminate the tenancy without one of the specified grounds being applicable.


The bill's introduction would seem to be a further step towards balancing the landlord's right to use and dispose of his property as he sees fit and the tenant's right to a reasonable degree of security of tenure. It is to be hoped that the bill, as published, will include a provision similar to that contained in Section 17(4) of the 1980 act. This provides that where, in a case in which an application for a new tenancy has been refused, it appears to the court that the landlord has not, within a reasonable time, carried out the intention, agreement or purpose on account of which such application was refused, the court may order the landlord to pay to the tenant such sum as it considers proper by way of punitive damages. This would provide a further measure of protection for residential tenants and would further discourage landlords from taking advantage of their position.

For further information on this topic please contact Paul Eustace at Dillon Eustace by telephone (+353 1 6670022) or by fax (+353 1 6670042) or by email ([email protected]).