Farm lease agreement
An agricultural land lease that creates a farm tenancy under property law.
It is suitable for terms between 6 months and 60 years and gives strong protection to the landlord with 62 tenant's covenants.
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About this farm lease agreement
While leasing spare agricultural land generates rent for a land owner, without a lease agreement in place it can be difficult to ensure that the tenant uses the land and farm property as intended, and perhaps more importantly, loses the right to stay at the end of the leasing arrangement.
This farm tenancy contract provides a lease that is fair to the tenant, but which protects the property and land resources of the landlord.
It does so by including positive obligations and restrictions on the tenant. We provide a large number of choices to make editing easy. Of course, if some are not applicable to your arrangement you can remove them.
The duration of the lease can be short or long term - between 6 months and 60 years. We have written the opportunity for the landlord to carry out regular rent reviews.
The law in this document
This document complies with current property law in each of the states for which we provide a version.
If the use of the property is for non-agricultural business use, such as tractor repair and storage or feed merchanting, we suggest that using an agricultural lease for private grazing or non-agricultural business use is more suitable.
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 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 business 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. tomatoes 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 law does 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.
Who should use this farm lease contract?
It is usually the landlord who prepares the lease agreement because their land is an expensive resource and they have the greater interest in protecting their legal rights over it. However, the tenant might also propose lease terms, perhaps as part of negotiations between the parties involved, perhaps to be able to start farming the land sooner.
Examples of the type of tenant for this farm lease contract include:
- a wheat farmer expanding crop growing operations onto adjacent property
- a dairy farmer renting land and outbuildings (perhaps specialist buildings such as a large milking station)
- a specialist rare breed farmer grazing animals on the land
- someone running a horse stud as a 'hobby' business
- a brewer who grows apples on the rented land (an orchard) and makes the cider in an outbuilding
- a plant grower who sells their plants from a building on the site
- a mushroom grower using one of the outbuildings to cultivate a new variation under special conditions for commercial sale
Document features and contents
This farm lease of course covers the standard terms that you would expect such a document to cover, such as the term of the lease, payment of the rent and arrangements on termination.
But where it differs from many other farm lease agreements is that it provides a large 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:
- Establishment of the farm tenancy
- Rent and other payments: including further payments and interest on late payments
- Rent review
- Tenant's positive obligations and restrictions
- Assignment: tenant may not assign the lease or sublet the property without the landlord's permission
- Redundant buildings: not required to be maintained
- Tenant's fixtures
- Landowner's obligations
- 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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