Agricultural tenancy

Fair Trading NSW - NSW Government

Knowledge level: Intermediate

Farm Table says:

Understand agricultural tenancy laws and how they apply to you as a tenant or a land owner.

This NSW Government Fair Trading website explains the concept of Agricultural tenancy and how the the Agricultural Tenancies Act 1990 applies to the tenancy.

What is an agricultural tenancy?

  • any arrangement giving someone who is not the owner of a farm the right to use the farm for agricultural purposes

It applies to farms that are

  • 1 hectare or larger, and
  • used for agricultural purposes, and
  • occupied or used by a tenant or intended to be occupied or used by a tenant.

What are the different types of agricultural tenancies?

  • a lease or licence
  • an agreed lease or licence within a tenancy agreement
  • a tenancy at will (a verbal or ‘handshake’ agreement)
  • a sharefarming agreement, or
  • any other arrangement by which a person who is not the owner of the farm has the right to occupy or use it.

What are the rights of tenants and land owners?

  • these are found in the Agricultural Tenancies Act
  • written tenancy agreements: If the parties cannot agree on the terms, either party may apply to the NSW Civil and Administrative Tribunal (NCAT) to have the terms of the tenancy determined.
  • improvements made by tenants: The improvements that a tenant can make without the owner’s consent are listed in Schedule 1 of the Agricultural Tenancies Act, as follows:
    • drainage
    • making or improving necessary roads or bridges
    • clearing and removing stumps and logs
    • destroying noxious animals
    • destroying pests (within the meaning of the Rural Lands Protection Act 1998)
    • making permanent subdivision fences
    • sowing pastures
    • applying fertilisers, liming materials and trace element products (within the meaning of the Fertilisers Act 1985)
    • repairs to buildings (notice must be given to the owner)
    • repairs to or re-erection of buildings to meet the requirements of the Food Act 2003 or other laws
    • repairs to and the cleaning of silt from wells, bores, dams, reservoirs and ground tanks.

     

  • improvements made by owners: if the tenant consents to the improvements, the tenant and land owner can reach agreement about compensation for the owner. The compensation can be fixed by agreement, but a tenant cannot be made to pay an unfair amount.
  • right of entry: the owner, or a person authorised by the owner, can enter the farm at a reasonable time to:
    • view the condition of the farm
    • perform a legal duty or function, or
    • carry out any permitted improvement.

    The tenant must be given reasonable notice (verbal or in writing). An owner cannot enter any part of the farm used for residential purposes without the tenant’s consent.

  • record of condition of farm and accounts: tenants and owners have a duty to keep proper accounts regarding the tenancy, and have the right to inspect each others accounts provided reasonable notice is given.
  • termination:  tenancy for a fixed term terminates at the end of the fixed term and no notice of termination is required. To terminate a periodic tenancy the tenant must be served with written notice. The length of notice must be at least equivalent to the length of the tenancy period. This means the period for which rent is paid, for example monthly or quarterly. In the case of sharefarming arrangements for crop growing, the notice period is 1 month, but the period of notice must end at least 1 month after the end of the current annual cropping program. To terminate any other arrangements, a notice period of at least 1 month is required. A tenancy from year to year cannot be terminated unless at least 6 months notice is given to the other party before the end of the tenancy period. The period of notice must end at least 1 month after the end of the annual cropping program.
Australia - Fair Trading NSW - NSW Government
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