For commercial leasehold transactions, there are a few noteworthy differences which should be considered including;
- Rent review – here in Ireland, upward only rent reviews are now prohibited. Businesses however need to be aware, if they take an assignment of an “old” lease i.e. one dated before 27 February 2010, they will inherit rent reviews which are still upward only;
- Security of tenure – Irish business tenants only acquire statutory rights of renewal after 5 years of occupation. Like England, this right can be waived;
- Registration of leases – only leases of 21 years are registrable in Ireland’s Land Registry. This means there is less transparency in the market of the lease terms negotiated and unlike the English registry this is not an open register;
- Taxes – stamp duty is 1% calculated on the annual rent, not on the sum of rent plus VAT. In both counties the VAT election processes are similar but in Ireland the landlord can disapply a vat election during the term; and
- Alienation – here in Ireland, on an assignment with landlord’s consent, the tenant is automatically released from all liability. However, it is common for landlords to seek guarantee arrangements as a condition of assignment. In England the assignee is automatically on the hook with authorised guarantee agreements.
For freehold purchases the conveyancing system in Ireland mirrors the English system however some notable differences should be considered including;
- Title investigation – in England more searches of utility and local authorities are available which is helpful when acquiring land for development;
- Requisitions – in England, these are raised and answered earlier, before contracts are exchanged, and therefore simultaneous exchange and completions are common;
- Tax – stamp duty in ireland is 6% on the purchase price (excluding VAT);
- Registration – particularly in urban areas large amounts of land in Ireland remains unregistered. Since June 2011 all transactions are compulsorily registrable at the Land Registry. In Ireland title is recorded in two registers. Unregistered land remains recorded in the registry of deeds. The registered land systems are very similar though in England access to documents are more freely available; and
- Seals – when buying with an Irish registered company, all deeds are still executed under the company seal in the presence of two directors.