Farm Land Lease Agreement

What is a farm land lease agreement?

A farm lease agreement is a legally binding contract between the landowner and a tenant that defines terms and conditions of the future lease. This is a special type of lease agreement in Australia dealing specifically with farmlands of various types, including cropping, grazing, horticultural, mixed, etc.

A simple farm land lease agreement includes a detailed description of the landlord and tenant, farm description, type, amount and frequency of lease payments, duration of the lease, and its termination.

What should be included in this farm lease agreement template?

A solid and well-drafted farm lease agreement template should include certain key elements listed below.

Property Description

Unlike with typical residential or commercial properties, the details of a farm land to be rented out should be specified very carefully. Sometimes the land may not have any visible boarders, therefore detailed demarcation of its borders in the text of the contract is essential. The document must include:

• type and size of the land (in hectares);
• permitted usage or for which purpose it should be used;
• if there are any buildings on the land, for example, a farmhouse, stables, etc.;
• if there is any electricity or water supply attached to the land.

Duration of Lease

Every farm lease contract template shall outline the start and end date of the lease. Neither federal nor state or territory laws provide any limitations regarding the maximum duration of the lease. Therefore, the farm land lease agreement can last from a couple of months to decades.

The text of a contract can also outline the renewal clause allowing parties to automatically prolong this agreement after its agreed termination date. Inclusion of an auto-renewal clause is not mandatory and largely depends on the parties’ needs and type of agricultural business.

Lease Payments

Even a basic simple farmland lease agreement form should clearly outline the amount and frequency of lease payments. The tenant can pay the lease weekly, monthly or annually. The amount of lease should be indicated, excluding any applicable taxes such as Goods and Services Tax (GST). In certain cases, a farm land lease agreement template may provide the payment model other than the case, including:

• crops sharing. In this case a tenant pays a fixed percentage of the harvested crops;
• livestock sharing. Here a tenant pays a fixed percentage of animals raised on the farm and provided as a rent.

It is also common to include the clause about the security bond. This is an additional amount paid at the beginning of the lease by the tenant to guarantee proper performance of the tenant’s obligations. Unlike residential leases, Australian laws do not provide any maximum or minimum requirements for the amount of a security bond under the farm land lease agreement should be.

List of Obligations

Each farm land lease agreement template must outline the list of the most important obligations for both parties.

Tenant’s duties under the farm lease contract include:

• to make lease payments in full and on time;
• to use the land according to the agreed purpose;
• to allow the landlord to access the land for usual inspection or repairs;
• to pay utilities in the amount as agreed;
• to not install any warning or advertisements on any part of the land without a landlord’s prior written consent;
• to not sublet part of the whole farm to third parties without the landlord’s prior written consent, etc.

The landlord’s duties under this contract must include the following:

• to insure the farm against major loss, damage, and other force majeure events;
• to provide the tenant with full access to the farm on the date of the start of the lease;
• to provide the tenant with the farm according to the description;
• to apply late fees in case the tenant fails to pay in a timely manner, etc.

Termination

As a rule of thumb, a farmland lease agreement shall expire on the last date of its term, unless terminated earlier by either party. The right to early termination of each party depends on the occurrence of specific circumstances, also known as default events.

For a tenant, a default event means failure to use the property according to the agreed purpose, failure to make rental payments on time, abandonment of the property, etc. On the other hand, a landlord’s events of default may include inability to provide the land according to the agreement timeline and description, failure to provide proper maintenance for the farm, etc.

Who should use this farmland lease agreement?

This document is the ideal solution for:

• landowners looking for opportunities to rent out their rural land and generate additional profit;
• farmers willing to further lease or sublease unused parts of the farmland;
• agricultural business willing to expand their capacities and get more land;
• individuals looking for opportunities to start a small farm business in Australia.

Why do you need a written farm lease in Australia?

Having a solid and professionally written farm lease agreement template provides lots of benefits to both landlord and tenant:

• clarifies mutual rights and obligations of both parties involved;
• serves as a solid framework helping to set up both parties’ expectations;
• serves as single documented proof of lease relations between the parties;
• ensures compliance with state and territory property acts.

This document can be used for various types of land across Australia. To rent out an apartment, house, houseboat or other type of residential property, another document should be used instead. For the tenancy of commercial properties across Australia, such as shops, offices, and warehouses, a commercial lease agreement shall be used instead.

How to customise a farm lease agreement with FasterDraft?

To get a fully customisable document template, follow a few easy steps below:

1. Click the “Create document” button.
2. Answer simple questions in the form.
3. Select a template’s format – farm lease agreement PDF or Word.
4. Make a payment.

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