RHGWhere a person leases a house on a farm, it can sometimes be unclear whether they are a residential tenant or an agricultural tenant.

A residential tenant has rights and responsibilities under the Residential Tenancies Act 2010. This legislation governs the landlord’s requirements to provide a safe and secure residence, matters that are to be included in a lease, what constitutes a breach of the lease, and the tenant’s right to privacy.

An agricultural tenancy is governed by the Agricultural Tenancies Act 1990. This Act sets out the rights of tenants to receive compensation for improvements undertaken on the property, and the capacity of landlords to require maintenance of land and infrastructure. The Act also provides a framework for resolution of disputes.

The Agricultural Tenancies Act only applies to farms that are larger than 1 hectare.

Where the principal use of a property is for agricultural purposes (which includes grazing, cropping, poultry & pig farming, bee-keeping, dairying and viticulture), the tenancy will be deemed agricultural. Even if the tenant leases the farm as well as a house, the tenant will not have the protection of the Residential Tenancies Act.

This means that a tenant will need to be aware of their responsibilities under the Agricultural Tenancies Act to ensure that they do not carry out work that is not authorised – doing so could mean that the tenant is not entitled to be compensated and the landlord will be deemed to own any new infrastructure but will not have to pay the tenant for the materials or labour.

It is therefore important that the landlord and tenant agree on what is required of each party at the beginning of the tenancy, and that the agreement is formalised by entering into a lease. The lease should also include a condition report, so that there is a reference point for any matters that become contested in the future. Photographs are a good way to document the condition of houses, sheds and fencing as well as pasture & weeds.

Whether you are a landlord or tenant, if you are considering entering into an agricultural lease contact the experienced conveyancing team at Everingham Solomons where Helping You is Our Business.

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