Agricultural lease: private grazing or non-agricultural business use

This document has been drawn as a grazing lease, for letting fields (that may have buildings on them such as stables, barns animal shelters or other outbuildings) to private individuals or businesses to keep horses or other animals. The document contains specific provisions to ensure that the land is well maintained by the licensee. It is also flexible enough to be used to let rural land for other purposes, such as recreational riding, a camp site business, or a sports field. It is drawn under the Part 4 of the Property Law Act 2007 Licensor and Licensee, and therefore is unsuitable if the land is to be used for "agricultural" purposes.

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About this grazing lease

This is a lease of agricultural land (one or more fields, perhaps with buildings or shelters) to be used for personal use or non-agricultural business use.

This document is suitable as a grazing lease for horses or other animals. The Licensor may allow the licensee to use the land in other ways too, and not necessarily for grazing.

The licensee is likely to be a private individual who needs additional paddocks, use of facilities on the land, or just room to ride. However, the licensee could equally be a business (such as a neighbouring livery requiring extra space) and the use could be unrelated to equestrianism (for example, the land could be leased as a camp site, sports field, clay pigeon shooting centre or safari park).

The law in this lease

This document creates a lease under the Part 4 of the Property Law Act 2007.

In balancing the codes with the law and the interest of the Licensor, we have followed the codes where reasonable, but have preferred the interest of the Licensor where there may be a difference.

Should you choose this grazing lease, a license, or a farm business tenancy agreement?

Land law is complicated, having been designed to protect licensees dependent on living from the land from land owners who otherwise would have power to dictate terms of occupation. Using the wrong type of document has implications for a Licensor on what a licensee may do on the land and the ease with which a contract can be ended.

In disputes, the law is more likely to be applied to the circumstances of occupation rather than the title of the legal document.

This lease is likely to be suitable if:

  • the Licensor happy to give the licensee advance notice before accessing the property or ending the tenancy;
  • responsibility for maintenance and upkeep lies with the licensee;
  • the licensee is not a farmer or anyone who will grow crops or breed animals with a view to sale.

This lease should not be used if the licensee will live on the land (say in a caravan) or in a building on the land.

Alternatives to this lease

If the arrangement is simply that the ‘licensee’ will use the land for grazing (and not for any other purpose such as recreational riding), a grazing agreement may be preferable to a lease.

If the land is used for a specific purpose for a short period of time, such as to hold a show or a three day eventing competition, then a licence may be appropriate.

Agreement features and contents

Key features of this lease are:

  • The licensee is limited to using the land as set out in the document. This gives the Licensor control of what the licensee does on the land, and thus how the land will be looked after;
  • There are extensive positive obligations on the licensee on how the land should be maintained. We presume that if used for grazing, the land being let is of high quality. The obligations should help it remain so.

This lease is comprehensive and provides alternatives for important choices. It contains 22 provisions and 1 schedule, including:

  • the lease;
  • rent: amount and frequency, other payments, interest, review;
  • condition and repair;
  • licensee’s positive obligations;
  • restrictions on Licensee;
  • agricultural provisions;
  • default notice by Licensor;
  • assignment of the lease;
  • subletting not allowed;
  • licensee indemnifies Licensor;
  • security deposit;
  • access for Licensor;
  • provision for premature termination;
  • forfeiture;
  • schedule 1: rights reserved.
Draftsman

This document was written by a solicitor for Net Lawman. It complies with current New Zealand law.

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