Farm lease agreement
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About this farm business tenancy agreement
This lease creates a farm tenancy agreement. It is comprehensive with a choice of 62 positive obligations and restrictions on the tenant to ensure that the land is used as the landlord wishes. The term of the lease can be between 6 months and 60 years with regular rent reviews.
The law in this document
This documentcomplies with property law.
If the use of the property is for non-agricultural business use, such as tractor repair and storage or feed merchanting, use a Agricultural lease: private grazing or non-agricultural business use.
When to use this lease
This document should be used if:
- All or part of the land is farmed for trade or business throughout the tenancy
- The landlord and tenant exchange notices at the beginning of the tenancy saying that the agreement is and will remain a farm business tenancy
- The circumstances of occupation suggest that the character of the tenancy is primarily agricultural
“Agricultural”refers to using all or part of the property to grow plants (crops) or rear animals with a view to sale. The scale of the business is not important: the same tenancy laws apply whether the property is a commercial dairy farm with hundreds of acres of pasture, or 10 metres of poly-tunnel under which a prize garden plant is cultivated.
Farming encompasses all sorts of businesses, from those growing crops in fields (including grass, hay or silage), to those where the crops are grown in an orchard or under glass (e.g. rhubarb or mushrooms), to those where the "crop" is an animal (e.g. lamb farming) or a product derived from animals (e.g. milk). Keeping animals (e.g. grazing horses on the land) in itself is not an agricultural business but horse breeding is. A garden centre is not an agricultural business, but plant growing is.
Change of use may be anticipated and will not necessarily disqualify the agreement, if notice has been served. The lawdoes not make clear how far diversification may go. However, it has now become clear that peripheral or additional business operations will not prevent a tenancy from being a farm tenancy, for example, operation of a farm shop or a camp site. In any case, any diversification of use other than farming is likely to require the consent of the landlord.
Examples of tenants who might use this lease include:
- A wheat farmer renting additional land
- A dairy farmer renting the land and outbuildings
- Someone grazing animals on the land
- Someone running a horse stud as a 'hobby' business and using the land or buildings for keeping horses
- A brewer who grows the apples on the rented land and makes the cider in an outbuilding
- A plant grower who sells his plants from a building on the site
- A mushroom grower using one of the outbuildings to develop a new breed for commercial sale
Document features and contents
This lease comes with a menu of over 62 options to empower or restrict the tenant. The terms have been carefully considered to protect the landlord's interests while remaining fair to the tenant. The document has 23 sections and 3 schedules, which include:
- The farm tenancy
- Rent and other payments: including further payments and interest on late payments
- Rent review
- Tenant's positive obligations and restrictions: a menu of 62 items
- Assignment: tenant may not assign the lease or sublet the property
- Redundant buildings: not required to be maintained
- Tenant's fixtures
- Insurance: choice for the landlord to be responsible, or for the tenant to be responsible
- Access for the landlord
- Indemnity: tenant indemnifies the landlord
- Termination: including notice period, and events at and after termination
- Guarantor: essential if the tenant is a company
- Other matters
- Schedule 1: rights reserved
- Schedule 2: redundant buildings
- Schedule 3: tenant's incoming fixtures
This document was written by a solicitor for Net Lawman. It complies with current Australian law.
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