What are Agricultural Tenants’ /Landlords’ Rights?
Many believe that agricultural tenants have little or no rights. This is simply not true.
It is true that agricultural tenants do not enjoy the same rights as residential tenants, who are afforded a comprehensive package of rights through the Residential Tenancies Act, but this does not mean that agricultural tenants are completely vulnerable.
Agricultural leases are governed by a combination of the Commercial Tenancies Act and the common law. The law provides various rights to both tenants and landlords in the context of agricultural land leases, as well as legal procedures to settle disputes.
Where a landlord and a tenant agree to terms respecting the lease of agricultural land, a binding and enforceable contract is formed. Where the contract is in writing, the terms set out in the written agreement are binding. Where the contract is oral, the terms are not binding until the parties commence ‘performance’ of the contract (i.e. rent is paid and accepted, the land is consciously made available to plant the crop, etc.).
In the case of annual crops, the lease is likely to be deemed a year-to-year lease unless there is clear intention to enter into a multi-year lease (preferably set out in writing). In the case of perennial crops, absent any clear understanding to the contrary, the term of the lease is likely to be deemed equal to the reasonable expected life-span of the crop. In such cases, however, where the landlord and tenant share differing views about the life expectancy of the crop, the case gets complicated and may ultimately depend on an objective view of the matter as determined by the courts. With this in mind, it is wise to enter into a written agreement with a landlord before planting a crop, and it is especially critical to have the terms set out in writing before planting a perennial crop; otherwise, the farmer may find him or herself (fairly or unfairly) put off the land before he or she expects it. In addition, if a perennial crop is planted without the knowledge of the landlord, there may be no entitlement to the land of any kind beyond the planting year (notwithstanding notice requirements, as described below).
Recently, I received a question with respect to notice requirements when a landlord decides to end a year-to-year lease. The Commercial Tenancies Act sets out notice requirements for week-to-week and month-to-month leases, but it is silent on year-to-year leases. I eventually found the answer in the common law as part of a 1948 decision. According to the case, minimum notice to end a year-to-year lease is six months. I note that the case indicated that notice could be provided orally or in writing; however, I believe that the common law should have evolved since then to require all such notices to be in writing, especially given that notice to quit week-to-week and month-to-month leases must be in writing to be valid.
All of this is not to say that landlords do not also enjoy protection under the law. For example, the Commercial Tenancies Act provides landlords with procedures and remedies in cases of overholding tenant farmers and when rent is not being paid. For example, crops and livestock may be seized and sold by a landlord in certain circumstances when rent is in arrears.
Keep in mind that the best remedy to any dispute is reasonableness and cooperation. Litigation to enforce rights should always be a last resort and, in most cases, will rarely produce a satisfying result from a financial perspective. Having said this, reasonableness is a two-way street, and tenants /landlords should at least know their rights if a dispute regarding an agricultural land lease should happen to arise.
The above article expresses the personal opinions of the author, and does not necessary reflect the opinions of any of his clients.
-Kurtis R. Andrews
Farm & Animal Welfare Lawyer