An agricultural tenancy is any arrangement that allows a person, who is not the owner, to use a farm for agricultural purposes. In some instances they may also live on the farm.
Where the predominant use of a property is for the purpose of agriculture the Agricultural Tenancies Act 1990 applies to the tenancy and the Residential Tenancies Act 2010 is void.
Agricultural tenancy laws only apply to farms that are:
Agricultural tenancies can be used for grazing, dairying, pig farming, poultry farming, viticulture, orcharding, bee-keeping, horticulture, growing of vegetables or other crops of any kind, forestry, or any combination of these activities.
Agricultural tenancies can involve:
A sharefarming agreement is when the owner supplies the land and assets, and the sharefarmer provides the labour, expertise, fertiliser if necessary, the machinery and the marketing.
The appeal in this type of agreement is that the owner of the land benefits from receiving income for no work. If the season or prices are bad, the share farmer as well as the owner will suffer a reduction in income.
Shareframing agreements vary and it’s important that you get advice from an experienced professional before signing an agreement.
Tenants and landowners have the right to have the terms of the tenancy agreement put into writing. The use of written agreements by tenants and owners is strongly encouraged to prevent disputes arising during the tenancy.
If everyone cannot agree on the terms, you can apply to the NSW Civil and Administrative Tribunal to have the terms of the tenancy determined.
There are situations where a tenant can make improvements to a farm with or without the owner’s consent.
If the owner consents to the improvements, the tenant and land owner can reach agreement about compensation for the tenant. There is a general obligation to pay fair compensation for improvements.
The improvements that a tenant can make without the owner’s consent are listed in Schedule 1 of the Agricultural Tenancies Act, as follows:
The Tribunal can also approve tenants’ improvements if they are determined to be suitable and desirable.
Like tenant improvements, there are situations where the owner can make improvements with or without the tenant’s consent. 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.
The owner is only able to make improvements without the tenant’s consent if the Tribunal has determined the improvement to be suitable and desirable in the circumstances.
Both tenants and owners can be eligible for compensation.
The owner, or a person authorised by the owner, can enter the farm at a reasonable time to:
The tenant must be given reasonable notice. An owner cannot enter any part of the farm used for residential purposes without the tenant’s consent.
If necessary, a record of the condition of the farm can be made when the tenancy starts, or at reasonable intervals during the tenancy. This must be done jointly by the owner and tenant.
The record of condition can cover:
Tenants and owners have a duty to keep proper accounts regarding the tenancy, and have the right to inspect each others accounts if reasonable notice is given.
These notice periods do not apply to termination for breach of the tenancy, or where the tenant and the owner have otherwise agreed on the amount of notice to be given.
The NSW Civil and Administrative Tenancy Tribunal is an independent body which has the power to resolve disputes about agricultural tenancy. Applications must be lodged with the Tribunal within three months of the dispute arising, or within three months of the end of the tenancy. You can apply for an extension.
The Tribunal cannot resolve disputes that involve amounts in excess of $500,000.
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