Rural lease (or farm lease)

Verified 07 October 2022 - Directorate for Legal and Administrative Information (Prime Minister)

The rural lease is a contract for the rental of agricultural land or buildings by an owner (called lessor) to an operator (called lessee), in return for rent. This makes it possible to farm and exercise an agricultural activity. The rural lease takes the form of a farm lease or much less rarely of a sharecropping lease (harvest products are shared with the owner).

Leases subject to the status of rental

When a lease is a rural lease, a set of rules automatically applies. For example, the tenant is entitled to renewal of the rural lease.

The landlord and the tenant can't give it up. This is called tenancy status.

All of the following must be present for the status of the farm to apply:

  • Making available of a building for agricultural use, i.e. land, farm buildings and/or a dwelling
  • Operation of this building to exercise a agricultural activity. These activities include:
    • Control and exploitation of a biological cycle of a plant or animal character
    • Activities which are an extension of the act of production or which are supported by the exploitation of a life cycle (e.g. processing, marketing, agritourism)
    • Breeding
    • Statutory agricultural activities (e.g., marine cultivation, some equestrian activities, salt marshes, snow removal)
  • Attachment of a rent

Leases subject to the status of rental subject to conditions

In some contracts, the rural lease rules (or tenancy status) do not apply in all situations. Certain conditions must be met:

  • Sale of grass: the owner sells the grass from his meadow to a farmer who hives there or grazes his animals. Where such a sale of grass is granted by the owner to the same farmer each year, it shall be considered as a rural lease. But if it is limited in time and concerns several purchasers, it is not a rural lease.
  • Repurchase of animals : the owner takes care of, maintains, feeds and treats the animals of a third party against payment. Where such a reverse repurchase agreement is carried out in the usual way, it constitutes a rural lease and the Staff Regulations apply.

Leases excluded from rental status

The rural lease rules (or tenancy status) shall not apply in the following cases:

  • Leasing of forests or forest property
  • Lease concluded to insure maintaining land near a residential complex (dependency)
  • Precarious occupation agreement : rental contract which allows occupancy of the premises in exchange for a sum of money (called royalty) below the market price.
  • Small parcel lease : contract for the rental of small-scale agricultural land (e.g. area of less than 1 ha in certain areas) which must not constitute a farm or an essential part of the tenant's holding.

Several rules must be respected when concluding a rural lease.

Who can enter into a lease agreement? 

The rural lease applies exclusively to agricultural real estate, i.e. land or farm buildings.

It can be concluded by 2 natural or legal persons (e.g. a business):

  • Farm Owner (lessor)
  • Tenant, farmer or sharecropper (lessee)

The lessor may have one of the following statuses:

  • Owner with full ownership
  • Usufructuary. In that case, he must obtain the consent of the bare owner or, if the non-owner does not agree, the usufructuary may request authorization from the civil court
  • Indivisary. He must then obtain the consent of all the indivisaries or a mandate special
  • Lessor spouse if the farm is owned by him personally. The consent of his or her spouse, Civil partnership partner or common-law partner is required if it is a common good.

If the tenant is not a national of the European Union, he must send an information sheet (cerfa no. 14519) to the Departmental Directorate for Territories and the Sea (DDTM) to obtain its agricultural operator card.

Is a written contract mandatory?

The rural lease may be written but it's not mandatory.

The rural lease verbal is valid if it meets the characteristics of the rural lease (i.e. the making available, against payment of rent or rent, of a building for agricultural use).

When the lease duration is over 12 years, the lease must be written and written by a notary.

Should an inventory be drawn up?

The state of play is not obligatory but it is highly recommended.

It is established by the lessor and the tenant (lessee) in the month before or in the month following the day on which the premises come into use. The costs are shared.

The inventory makes it possible to determine which works are the responsibility of the owner. It is also used to prove, at the tenant's departure, that the tenant has improved the land or buildings, for example.

In the absence of an inventory, the tenant is assumed to have received the buildings in good condition, and it must therefore return them in good condition.

FYI  

Farmers' rooms sometimes offer detailed guides to the establishment ofstocktaking distinguishing each parcel, each building and each room from them.

There are several types of contracts for the exploitation of immovable property for agricultural use.

Ordinary lease

The rural lease is in principle concluded for a minimum duration of 9 years. However, the parties may, by mutual agreement, terminate the lease before the 9-year period.

This minimum duration can exceptionally be reduced for the following cases:

  • Lease concluded by a business for land use and rural establishment (Safer): in this case, the maximum term is 6 years.
  • Lease in respect of a small plot : the parcel must not exceed a maximum size fixed by a prefectural decree or constitute an essential part of the holding or farm.
  • Lease of1 year consented temporarily while waiting to settle a descendant.
Long-term lease

The long-term lease is established by notarial deed. It guarantees a certain stability to the tenant. In return, the rent is higher than in an ordinary lease.

It can take different forms:

  • 18-year lease : it gives the tenant a right to renewal for a period of 9 years.
  • Lease of 25 years : it ends after 25 years or may continue if the parties insert an automatic renewal clause in the contract (tacit renewal).
  • Career Lease : it is concluded for a minimum period of 25 years. It ends at the end of the crop year in which the tenant reaches retirement age (set at 62 years minimum by the MSA: titleContent).
  • Lease transferable outside the family : the minimum duration is 18 years. It can be transferred by the tenant to all persons other than his relatives without the owner's approval.

The rent is called leasing in the rural lease (or farm lease).

There are two types of rent:

  • Rent on bare land and farm buildings
  • Rent of residential buildings

Répondez aux questions successives et les réponses s’afficheront automatiquement

Bare land and farm buildings

The price of each farm is established according to a scale established by the prefect of the department.

This scale sets maxima and minima according to several characteristics of the leased property: soil quality, location, size and characteristic of the buildings of operation, etc.

The rent is paid according to freely fixed deadlines in the lease: either 1 annual or 2 half-yearly installments.

It can be expressed in one of the following ways:

  • In general, the rent must be expressed in euros. It is upgraded according to the national rental index set annually by the ministry responsible for agriculture before 1er October.
  • Where the lease concerns bare land for perennial crops (such as permanent wine, tree, olive and citrus crops), the rent may be assessed in a quantity of foodstuffs between maxima and minima set by the prefect of the department.

In case of dispute by one of the parties of the amount of the rent, the owner or operator of the land may seize the joint rural leases court by subpoena or by request. The court can set the rent.

FYI  

In 2022, the National Rent Index is set at 110.26. It's up by 3.55% compared to 2021 (index set at 106.48).

For example, a lease on 25 hectares of bare land has an annual rent of 2021 equal to €3450.

For 2022, the updated rent is: €3,450 + (3450x 3.55% ) = €3,572

Residential buildings

The rent is fixed in currency between minima and maxima fixed by the prefect.

It is updated according to the variation of thebenchmark rent index (IRL) published by Insee: titleContent.

When concluding a rural lease, certain obligations are placed on the landlord and the tenant.

Répondez aux questions successives et les réponses s’afficheront automatiquement

Lessor

When concluding a rural lease, the owner must meet the following obligations:

  • Obligation to issue, i.e. provision of land and buildings which are free (and therefore not occupied by another tenant). This obligation is accompanied by the obligation to issue the thing in good condition with reparations of all kinds.
  • Guaranteed peaceful enjoyment : the owner must not cause any disturbance to the holding. For example, the owner who removes a fence does not allow the tenant to use a meadow normally. It does not respect the obligation of peaceful enjoyment.
  • Maintenance of the rented property and support forBig ones repairs : Major repairs include major wall and arch repairs, restoration of full beams and blankets, retaining walls and fencing. The rental repairs (such as repairs of bedroom tiles, or of partition boards) are at the expense of the tenant.
  • Guarantee against hidden defects : the lessor's obligation applies where the alteration of the thing is due to a hidden defect. The vice must prevent the use of the premises.
  • Ensuring the permanence and quality of plantations (especially for vines and orchards). However, the owner is not required to ensure the permanence or quality of the cider apple or pear plantations in perry. The departmental joint consultative commission on rural leases determine in each department the scope and practical arrangements for the permanence and quality of plantations.
  • Payment of the insurance premium building fires and property taxes
  • Let the tenant chase on the leased fund

Tenant

The tenant must meet the following obligations:

  • Pay rent (called leasing) or share the harvest (sharecropping)
  • Using the leased item reasonably and according to the purpose of the lease. This means that the lessee must operate and maintain the leased land for the purposes of the rural lease. Any material breach of this obligation may lead to the resumption of the leased fund by the lessor.
  • Notify the landlord of any fraudulent use of the leased property by a third party (for example, encroachment and diversion of watercourses)
  • Respecting cultivation practices (e.g. preservation of water resources or landscapes) in the case of an environmental rural lease
  • Obtain written permission from the owner to perform any change not provided for in the lease agreement and aimed at improving exploitation (e.g. by planting plots of land)

Please note

When the tenant wishes to do work, he must send the lessor a registered letter with acknowledgement of receipt containing a description. If the lessor wishes to object, the lessor shall have 15 days in which to lodge a complaint with the joint rural leases court.

Subletting is a contract by which the tenant leases all or part of the building to another person. He remains the tenant of the landlord/landlord, while becoming the landlord of his sub-tenant.

It is in principle prohibited. However, it may be authorized in the following cases:

  • As part of a exchange or lease of parcels : in order to obtain better operating conditions (geographical convenience of operation of the plots in particular), the tenant subleases or exchanges plots farther from the central core of the holding. The lessee sends a registered letter with AR to the lessor informing him. If the lessor decides to oppose this operation, he must refer the matter to the joint rural leases court within 2 months.
  • For use with holiday or leisure : buildings for residential use (for a maximum period of 3 consecutive months) with the permission of the lessor or, in the event of refusal by the lessor, with the permission of the joint rural leases court
  • On residential buildings provided that the lessee has an authorization from the lessor.
  • For to house relatives of the lessee in the rented residential buildings. Relatives are the ascendants, descendants, brothers and sisters, and the spouses or partners of aCivil partnerships: titleContent.

Who can help me?

Find who can answer your questions in your region