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 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.
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.
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 Lessor may also need to take out insurance, it is advisable to consult with your insurance company in respect of this.
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 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.
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.
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.
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.
