It has recently emerged that prior to the publication of this guidance note NAMA had approved over 99% of rent reductions sought by tenants of NAMA debtors in 2011.

The guidance note relates to NAMA’s assessment of rent reduction applications by a NAMA debtor\receiver who is now, due to economic conditions and through no fault of his own, financially distressed. The applicant will also need to demonstrate that the current rent payable under the existing lease poses a real and immediate threat to the viability of their business. The tenant and the NAMA debtor/receiver should also be of the view that a temporary rent reduction is likely to be the major factor in determining whether the tenants business survives.

NAMA does not own the properties in question and as such does not have the authority to effect such rent reductions of its own volition. Therefore the guidance note is designed to facilitate a mutually agreeable process between the landlord (often the Receiver) owning the property (albeit as security for a NAMA loan) and the tenant.

The guidance note explicitly states that “NAMA will have regard to its statutory obligation to protect and enhance the value of the loans acquired by it so that it obtains the best achievable financial return for the Irish taxpayer”.