A lease agreement legal document will set out all obligations for both parties

A lease agreement legal document will set out all obligations for both parties

A lease agreement legal document will set out all obligations for both parties.

A lease agreement is a written legal document which is normally made between two parties who are the Lessor (owner) and Lessee (tenant).

It is becoming increasingly common for landowners to lease their lands to be used for agricultural purposes.

There are a number of lease agreement templates and precedents available, and the most commonly used one would be the Irish Farmers Association Master Agricultural Lease.

It is advisable to obtain advice from a solicitor so that the lease can be tailored to the specific wishes and needs of the parties to the lease.

When farmers are entering into a lease, the following points should be considered:

  • The lands subject of the lease need to be agreed between the parties.
  • The lease should refer specifically to a Folio and if the lease is only in respect of part of the Folio, a map needs to be provided with the lands clearly marked, showing what lands are being leased.

  • The terms of the lease need to be set out.
  • If the term is for a short period, less than a year, it might be worthwhile to consider entering into a license agreement with a specific purpose such as grazing.

    This agreement is not classified as a lease and there are less obligations.

  • The amount of rent payable needs to be set out on the lease. In respect of what rent should be charged, it is advisable to take advice from an auctioneer who can advise in respect of market rent rates, based on where the land is and what it is used for.
  • Should a rent review clause be included in the lease?
  • If the lease is long term and over five years, it might be advisable to make provision that the rent is reviewed every couple years.

    A specific clause can be inserted into the lease dealing with this.

  • The lease made should set out the specific use of the land, and should set out works that are allowed on the lands, and works that are prohibited.
  • The lease should provide that insurance is in place, which is normally public liability insurance, so that the Lessor is protected against any claims arising for the Lessee’s use of the land.
  • The Lessor may also need to take out insurance, it is advisable to consult with your insurance company in respect of this.

  • The lease will set out all obligations for both parties.
  • In respect of the tenant’s obligations, it is advisable to include clauses that the land is properly maintained and fenced, and repairs will be carried out if required.

  • The lease should provide provision to terminate the lease on certain conditions.
  • The lease can normally be terminated if the rent has not been paid, or if the obligations in the lease have been breached. There should be specific clauses in the lease dealing with this, which will also set out the notice period that you would have to give before the lease can be terminated.

  • The lease should make provision in respect of the position with entitlements.
  • If there are entitlements, you may wish to lease these, and provision can be made for this in the lease.

    Details of the entitlements would have to be annexed to the lease.

  • It is advisable to include a renunciation clause, to prevent any automatic right of renewal of the lease.
  • Under landlord and tenant legislation, leases can be automatically renewed, under certain conditions.

    This particularly applies when the land that is being leased mainly consists of buildings, and the adjacent lands are considered “ancillary” to the buildings.

    In order to protect yourself here, it is advisable to include a renunciation clause.

  • There may be tax incentives for a farmer to enter into a lease agreement.
  • It is important that farmers get advice from a tax consultant or accountant in respect of their tax obligations if they enter into a lease.

    If you are entering into a lease, particularly a long term lease with a farmer, it is advisable that you speak with a solicitor, and that you are fully aware of the obligations which may arise by entering into such a lease.

    Karen Walsh, from a farming background, is a solicitor practicing in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of ‘Farming and the Law’. Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.- Email: info@walshandpartners.ie- Web: www.walshandpartners.ie

    More on this topic

    Evening round-up: Nama forced into €2m settlement, Barry's pull greyhound sponsorshipEvening round-up: Nama forced into €2m settlement, Barry's pull greyhound sponsorship

    Malin Andersson marks first Mother’s Day since death of baby daughterMalin Andersson marks first Mother’s Day since death of baby daughter

    Calls for airlines to require bonding to protect customers after Wow Air collapseCalls for airlines to require bonding to protect customers after Wow Air collapse

    Cigarettes and alcohol worth  €8,000 seized at Dublin PortCigarettes and alcohol worth €8,000 seized at Dublin Port

    More in this Section

    €20m EU scheme to protect Irish water quality€20m EU scheme to protect Irish water quality

    Residential farm for sale where three Munster counties meetResidential farm for sale where three Munster counties meet

    Keen interest in farm sale at Donoughmore in mid-CorkKeen interest in farm sale at Donoughmore in mid-Cork

    21-acre West Cork farm for sale with stables and lunge ring21-acre West Cork farm for sale with stables and lunge ring


    Lifestyle

    Bonnie Ryan couldn’t be happier.On a roll: Why Bonnie Ryan couldn't be happier

    Laura Harding goes on location to see where the new adaptation of Jane Austen's Emma was shotBehind the Scenes: Getting the inside story on the movie Emma

    More From The Irish Examiner