Default of payment of farm rent, what to do?

Are you the owner of agricultural land and your tenant is in default of paying the rent? Are you wondering if you can take action and what your options are? We explain.

Reminders on the status of farm tenancy

Subject to the farm lease status is any "provision for consideration of a building for agricultural use with a view to operating it". The rural lease has a minimum duration of 9 years and is renewed by tacit agreement at its term.

It should be noted that the status of tenancy is a very protective regime for the sitting tenant, which is explained by the fact that the leased land is the tenant's production tool.

Consequently, the non-payment of farm rent or the delay in payment of farm rent by the farmer does not automatically result in the termination of the lease.

As an owner, it is therefore necessary to follow strict formalities to obtain the termination of the lease in the event of non-payment of the farm rent.

What is default on payment of farm rent?

Failure to pay farm rent is the non-payment of rent by the tenant at the due date.

What are the owner's means of action in case of non-payment of farm rent?

 

1. Settle the dispute amicably

In the event of non-payment of farm rent, the lessor and the tenant can always settle the dispute amicably. The parties to the lease can thus agree on a staggered payment of farm rents or payment deadlines.

2. Request termination of the agricultural lease

Termination of a rural lease for non-payment of rent is strictly regulated.

Such a termination is only possible after two non-payments that have persisted for three months after the farmer has received one or more formal notices.

Therefore, it is necessary to:

– Or at least two due rent payments remaining unpaid 3 months after receipt of one or more formal notices targeting these two payments,

– Either a farm rent payment due remains unpaid 3 months after receiving two formal notices targeting this payment (the formal notices must then be spaced at least three months apart),

Please note, the formal notice must contain specific provisions, otherwise it may be void. If the formal notice does not meet the requirements set by the Rural and Maritime Fishing Code, the Court will not order the termination of the lease.

Note, the total non-payment of due farm rents is assessed on the day the Tribunal is seized.

In defense, the tenant may attempt to justify the non-payment of rent by invoking serious and legitimate reasons (incorrectly demanded rent, flooding, financial difficulties of the farm independent of the tenant's will...).

3. Opposing the renewal of the agricultural lease

Upon its term, the rural lease is tacitly renewed for a period of 9 years.

After two non-payments persisting three months after the farmer received one or more formal notices, the owner may refuse to renew the lease.

To do this, the owner must have a bailiff (formerly a judicial officer) serve the farmer with a notice of non-renewal of the lease at least eighteen months before the lease expires.

Caution: to be valid, this notice must comply with the requirements set out in the Rural and Maritime Fishing Code, otherwise it may be validly contested and annulled.

Advice: when should the owner act?

You need to act quickly.

First, because the farm rent claim is subject to a five-year statute of limitations, and second, because the renewal of the lease may prevent you from invoking payment defaults for farm rents prior to the renewal.

Do not forget:

The farmer may request, before the end of the lease, the transfer of the lease to the benefit of their spouse or descendants.

In principle, the owner cannot refuse such a transfer unless, notably, during the execution of the lease, the farmer has not been diligent in paying the rent.

Note, this does not involve proving the existence of two non-payments that persisted after receiving one or more formal notices. It simply requires demonstrating that the farmer paid their rent sparingly or late, and did so regularly during the lease term. The landlord must therefore remember to send written reminders to the farmer in the event of late rent payment.

To resolve a dispute related to a farm rent default, it is recommended to be assisted by a specialized lawyer. If your tenant farmer no longer pays, do not hesitate to contact one of our specialist lawyers in rural law support@macfarlanesllp-uk.com

 

Article written with the assistance of Wassila EZZAOUI, apprentice jurist.

Agriculture, Rural Law

 

Agriculture, Rural Law