Through the lease agreement, the lessor provides the lessee with agricultural land and/or immovable and movable property for agricultural production for temporary use, in return for a specified rent.

The minimum term for a lease agreement is five agricultural years. An "agricultural year" is understood to mean the period from 1 October of the current year to 1 October of the following year.

No maximum term for the agreement is provided for, and a lease agreement may also be concluded for life.

If the term is not specified in the agreement, the agreement is deemed to have been concluded for an indefinite period, but for not less than five agricultural years.

Conclusion and amendment of the lease agreement

The lease agreement is concluded by the owner of the land or by a co-owner who holds more than 50% of the ideal shares of the respective property. It is also possible for a person authorised by a notarised power of attorney by co-owners holding, together with him, more than 50% of the ideal shares, to conclude the agreement.

Lease agreements, as well as their amendment or termination, must be in written form and with notarisation of the signatures, carried out simultaneously. This is a requirement for the validity of the agreement, and if it is not observed, the agreement will have no legal force.

An integral part of the agreement are the cadastral sketches of the agricultural properties provided for use. These sketches are issued by the Geodesy, Cartography and Cadastre offices, or by the municipal agriculture office where no cadastral maps and registers have entered into force.

Lease agreements and their amendments are entered in the registry offices and registered with the respective municipal agriculture office. The sketches of the properties must also be attached to the document subject to entry.

Additional agreements amending the lease agreement, including those extending its term, must likewise be with notarisation of the parties' signatures, carried out simultaneously. These agreements are subject to entry in the registry offices and in the register of the respective municipal agriculture office. A proposal to extend the term of the agreement may be made no later than the end of the ninth month of the agricultural year preceding the termination of the lease agreement.

Rights and obligations of the parties

The lessor is obliged to deliver the leased object in a condition corresponding to the agreed use, and to maintain it throughout the term of the agreement. Upon the signing of the agreement, an inventory of the properties is also drawn up, which is signed by both parties and cannot be contested later.

If the object of the agreement has not been delivered in a suitable condition, the lessee has the right to request corrections, or to carry them out at the lessor's expense, or even to terminate the agreement.

The ongoing maintenance of the object is the lessee's responsibility, and the lessee bears the costs of maintaining the facilities, roads, channels and other elements of the property, as well as the insurance of the assets.

Rent

The rent may be paid in money and/or agricultural produce. If the time for payment is not specified, the rent is paid on the first working day after the end of the agricultural year. Where payment is made in instalments, the lessee must make it on the first working day after the end of the respective period.

The amount of the rent is determined on the basis of the market land rent or the rental price, including annual depreciation and interest on the invested capital.

Sub-leasing

The lessee may sub-lease the object only if this is expressly agreed in the agreement. The sub-lease agreement is subject to notarisation and entry in the registry office and the municipal agriculture office.

Termination of the agreement

The lease agreement may be terminated on expiry of the term, by mutual consent, on grounds of non-performance, or by unilateral notice. If it has been concluded without a term, it may be terminated after the expiry of the fourth year, with a notice period of two agricultural years.

The termination is subject to entry in the registry office and registration with the respective municipal agriculture office.

If the lessee fails to perform its obligations, the lessor has the right to terminate the agreement, in particular if the rent is delayed by more than three months.

Should you require further information or assistance in drafting, amending or terminating a lease agreement, please contact us on tel.: 0887550706 or by e-mail: [email protected]