Obligations and qualifications around Agricultural Tenancies in 2023.

Recent health checks on Investment Management Portfolios across the state has prompted the Directors at Regrowth Consultancy to remind Principals of their duty to educate their property management teams of the obligations around Agricultural Tenancies.

This encompasses agency advice to their clients where appropriate for the requirements of leases, licences or share farming agreements that are drawn up, especially to provide clarity around improvements.

What is an agricultural tenancy and do the laws apply?

If you are managing rural properties as part of your investment management portfolio, it is imperative to understand the relevant Acts that apply in respect to the use of the property.

Where the property is one hectare or more and utilised for farming or agricultural purposes, whether it be the use of the land only or the use of land and occupancy of a dwelling, the Agricultural Tenancies Act 1990 will apply.

What constitutes an agricultural tenancy

In comparison to residential tenancies, an agricultural tenancy can apply to a lease or licence within an agreement for use of a property for ventures including crop farming, horticulture, forestry, beekeeping, grazing, and the activities relating to farming of livestock.

An agreement for an agricultural tenancy may also include share farming arrangements, where an Owner supplies land and assets while farming operations are outsourced to the sharefarmer on agreed terms.

There may be a tenancy at will which involves a verbal agreement between parties or written tenancy agreements that detail all terms and is an encouraged format to assist in potential dispute resolution.

Responsibility for improvements

Tenants on agricultural agreements have allowances to make some improvements without the Owner’s consent in matters which can be found in Schedule 1 of the Agricultural Tenancies Act 1990.

For other conditions around improvements, agreement can be made between the landowner and tenant and allow for discussions around fair and reasonable compensation, if required applying to both the landowner and tenant.

Access and record keeping

An Owner or authorised party may be permitted to enter the agricultural property with reasonable notice to the tenant to complete required improvements, analyse the property condition or perform any legal duties.

Records of the condition of the property must be kept including improvements and fixtures, conditions of chattels, the land, roads, and drainage as well as the cultivation of the land.

Ending an agricultural tenancy

Notice periods apply for agreements made under an agricultural tenancy and must consider annual cropping programs. In cases of tenancy breaches and agreements between parties, these terms may not apply.

Notice periods can include:

-       One month’s notice in relation to share farming agreements which must end at a minimum of one month after any annual cropping program.

-       The length of the rent payment period in the case of periodic tenancies.

-       A minimum of six months’ notice prior to the end of the tenancy period in a year-to-year tenancy.

-       At least one month’s notice for other arrangements.

-       Fixed term agreements will terminate at the end of the lease term with no requirement for a notice of termination.

As an Investment Manager over agricultural properties, it is essential to cultivate key knowledge to provide best in sector investment advice to your landowner clients.  

The team at Regrowth Consultancy can assist with education surrounding the intricacies and requirements of the Agricultural Tenancies Act. Contact Regrowth Consultancy to talk about our coaching options for your team in 2023.