In brief
A Determination has been made so that farm leases will be excluded from the operation of the Retail Leases Act 2003 (Vic) from 29 October 2019.
What you need to know
Where you are advising a landlord, if the lease is of agricultural land, it is important that the use is drafted appropriately so that the Act does not apply.
The Act may apply if the lease is for charitable purposes. For instance, if the tenant is not operating a business from the premises. Of course, such instances will be rare.
Background
The Determination relevantly states various leases are excluded from the operation of the Act that are used wholly or predominantly for the following activities for commercial gain:
- agricultural, pastoral, horticultural or apicultural activities;
- poultry farming, dairy farming, aquaculture, tree-farming or any business that consists of the cultivation of soils, the gathering of crops or rearing of livestock;
- grazing, including agistment;
- any other activities prescribed as a farming operation for the purpose of the Farm Debt Mediation Act 2011.
The Determination has effect from 29 October 2019.
Conclusion
In recent years, the breadth of the operation of the Act has expanded to cover leases which I never thought would be covered by the Act. As such, the Determination is welcome to clarify that farm leases will not be governed by the Act from 29 October 2019. Of course, any lease entered into before that date may attract the operation of the Act.
Please contact me if you have any queries concerning the Determination, or require advice to ensure that any farm lease does not attract the operation of the Act.
