Farm Building Lease

Agdex#:	812
Publication Date:	October 2003
Order#:	03-093
Last Reviewed:
History:
Written by:	OMAFRA Staff

Table of Contents

1. To use this form
2. Section 1 : Names of Parties and Description Of Property
3. Section 2 : Term of Lease
4. Section 3 : General Terms of Lease
5. Section 4 : Amount Of Rent Payable And Division Of Expenses
6. Section 5 : Tenants & Landlords Duties
7. Section 6 : Resolving Differences And First Rights Of Refusal
8. Section 7 : Additional Agreements
   

To use this form: Complete two identical copies - one for the landlord and one for the tenant. Cross out any provisions not part of the agreement and have both the landlord and tenant initial these. Add any additional provisions desired. Use ink or a typewriter. Suggestions for completing and using this lease form can be found in the OMAFRA Factsheets Land Lease Arrangements, Order No. 01-065 and Lease Agreements for Farm Buildings, Order No. 03-095.

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Section 1 : Names of Parties and Description Of Property

1. Names and Addresses of the Tenant and Landlord

This lease is entered into on _________________________________________________, 20_______,

Between

__________________________________________________________________, Landlord,

of (address)__________________________________________________________________, Ontario

and _________________________________________________________________ spouse of Landlord

And

__________________________________________________________________, Tenant,

of (address)__________________________________________________________________, Ontario

and __________________________________________________________________, spouse of Tenant.

2. Description of Property to be Leased

The Landlord leases to the Tenant, to occupy and to use for agricultural purposes only, the following property located in the Township of or former Township of _______________________________, in the County, District or Region of ______________________ in the Province of Ontario, legally described as Lot ______, Concession ______, consisting of the following size and dimensions: (description, type,
condition) hereafter called the leased premises.

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

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Section 2 : Term of Lease

The Term of the Lease

Instructional Note: A lease of this nature cannot extend beyond a term of 21 years; it is suggested that the maximum term of the lease for paragraph (a) below be 20 years.
Only use one of the clauses below. If a continuing lease is desired, use paragraph (a) and strike out (b). If a definite term is desired, use paragraph (b) and strike out paragraph (a). No notice of termination is necessary if paragraph (b) is used.

Continuing lease - The term of this lease shall be _____ year(s) commencing on_________, 20_____ and shall continue in effect from year to year thereafter (as an annual lease) unless written notice of termination is given by either party to the other at least _______ days prior to expiration of this lease or the end of any year of continuation.

Annual lease - The term of this lease shall be ________ year(s), commencing on the _____________, 20_____, and ending on _____________, 20_____. If the Tenant wishes to renew this lease the Tenant must notify the Landlord in writing not less than sixty (60) days prior to the expiry date of the lease of the Tenant's desire to renew. If such a notice is delivered, then the Landlord and Tenant shall seek agreement on the terms of such renewal which must be agreed to within thirty (30) days prior to the expiry of the then current term of the lease failing which this lease shall terminate on the date set for expiration and the Tenant shall give up possession of the leased premises.

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Section 3 : General Terms of Lease

1. General Clause

Right to sublet or assign - The Tenant shall have the right to sublet or assign this lease provided the Tenant obtains the written consent of the Landlord, which consent shall not be unreasonably withheld.

Amendments and alterations - Amendments and alterations to this lease shall be in writing and shall be signed by both the Landlord and Tenant.

No partnership intended - It is particularly understood and agreed that this lease shall not be deemed to be nor intended to give rise to a partnership relation.

Binding on heirs - This Lease shall be binding upon the Landlord and Tenant and their respective personal representatives, trustees, successors and assigns.

Landlord liability - The Tenant takes possession of the leased premises subject to the hazards of operating a farm, and assumes all risk of accidents personally as well as for family, employees, or agents in pursuance of farming operations, or in performing repairs on buildings, fences, tile, and other improvements except for any liability arising out of the gross negligence of the Landlord.

2. Right of Inspection and Removal of Livestock or Crops

Landlord's right to enter property - The Landlord reserves the right personally or by agents, employees, or assigns to enter upon the leased premises at any reasonable time to view them, to work or make repairs or improvements thereon, to care for and dispose of the Landlord's share of crops or livestock, or, after constructive notice has been given that the lease may not be extended, do any customary seasonal work, these operations not to interfere with the Tenant's in carrying out the regular farming operations.

Quiet possession - The Landlord gives the Tenant quiet possession of the leased premises in accordance with section 13 of Schedule B to the Short Forms of Leases Act, RSO 1990, c. s.11.

Tenant's right-of-way -The Landlord shall give to the Tenant a right-of-way over lands owned by the Landlord which abut the leased premises for the purpose of access to the leased premises if such a right-of-way is necessary and such right-of-way shall cease upon the termination of this lease.

3. Transfer of Property (Strike out unwanted clause)

Sale of property recognizes the lease - If the Landlord should sell or otherwise transfer title to the leased premises, the Landlord shall do so subject to the provisions of this lease.

Or

Lease terminated on the sale of the property - In case the Landlord should desire to sell the leased premises during the term of the lease, the lease may be terminated at any time by giving _____ days notice to the Tenant. The Tenant shall, at the expiration of the notice period, peaceably and quietly give up possession of the leased premises to the Landlord. The Landlord shall, after the Tenant has delivered up possession in manner aforesaid, and paid to the Landlord the full proportion of rent up to the beginning of the notice period will compensate the Tenant for any improvements done on the leased premises, such compensation to be determined by arbitration if the parties cannot agree thereon.

4. Termination of Lease

Grounds for termination of lease - If either party fails to carry out substantially the terms of this lease in due and proper time, the lease may be terminated by the other party by serving a written notice citing the instance(s) of default and specifying a termination date of ______ days from the date of such notice. Settlement shall then be made in accordance with the provisions under the Right of Inspection section of this lease and any amendments to this lease.

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Section 4 : Amount Of Rent Payable And Division Of Expenses

1. Payment of Rent

The total annual cash rent shall be $________s. GST will be added to the rental amounts when applicable.

The rent shall be payable as follows:

$_______________________ on or before the _______ day of __________________, 20______.

$_______________________ on or before the _______ day of __________________, 20______.

$_______________________ on or before the _______ day of __________________, 20______.

If rent is not paid when due, the Tenant agrees to pay interest on the amount of unpaid rent at the rate of _______ percent per annum from the due date until paid.

Additional agreements in regard to rental rates:

__________________________________________________________________________________

__________________________________________________________________________________

2. Expenses

Materials and labour - The Landlord will furnish materials and the Tenant will perform labour for normal maintenance and repairs, except skilled labour that the tenant himself is unable to perform satisfactorily will be furnished by the Landlord.

Purchase of materials - The Tenant may buy, without further authorization, materials for normal maintenance and repairs in a total amount not to exceed $_____________ each year, and the Landlord will credit or reimburse the tenant for such expenditures as follows:

_________________________________________________________________________________

_________________________________________________________________________________

_________________________________________________________________________________

_________________________________________________________________________________

Record of expenses - The tenant will receive a record of expenses paid by the landlord, and settlement will be made by mutual agreement or at the time that final rent payment is due.

Additional agreements relative to expenses:

_________________________________________________________________________________

_________________________________________________________________________________

_________________________________________________________________________________

_________________________________________________________________________________

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Section 5 : Tenants & Landlords Duties

1. The Use Of The Buildings

The parties further agree to perform and carry out the stipulations below. (Strike out any not desired.)

a) The Tenant agrees to:

Compensation to landlord for damages - When the tenant leaves the leased premises, he will pay the landlord reasonable compensation for any damages to the premises for which the tenant is responsible, except ordinary wear and depreciation and damages beyond the tenant's control.

Repairs - To keep the buildings, fences and other improvements in as good repair and condition as they are when the Tenant takes possession or in as good repair and condition as they may be put by the Landlord during the term of the lease, ordinary wear, loss by fire, or unavoidable destruction excepted.

Removable improvements - Minor improvements of a temporary or removable nature that do not mar the condition or appearance of the leased premises may be made by the Tenant at his own expense. The Tenant may at any time this lease is in effect, or within a reasonable time thereafter, remove such improvements, provided he leaves in good condition that part of the leased premises from which they are removed.

Livestock manure - To remove livestock manure at the following approximate times: __________

__________________________________________________________________________________ and dispose of it according to the following manner and location: _______________________________________.If the manure is to be spread on the Landlords property the Tenant shall haul and spread manure only on appropriate fields at times and in quantities consistent with sound manure management practices. If there is a nutrient management plan or strategy for the leased premises, then the Tenant shall store and manage all manure, nutrients, biosolids or other materials prescribed by the Nutrient Management Act 2002 or municipal by-law, in accordance to that plan or strategy and maintain records in accordance with the applicable law. (Strike this provision if owner is responsible for manure removal.)

Fire protection - The Tenant will not, without written consent of the Landlord, house automobiles, trucks or tractors in barns or otherwise violate restrictions in the landlord's insurance policy. The landlord shall make such restrictions known to the Tenant.

Add improvements - The Tenant will not, without written consent of the Landlord, (a) erect or permit to be erected on the leased premises any non removable structure or building, or (b) incur any expense to the Landlord for such purpose, or (c) add electrical wiring, plumbing or heating to any buildings, and if consent is given, will ensure such additions meet standards and requirements of power and insurance companies.

No Alterations - Not to remove, alter or change the style or position of any building or fence on the leased premises

No other activities - Not to permit, encourage, or invite other persons to use any part or all of the leased premises for any purpose or activity not directly related to its use for agricultural production.

No cutting of trees - Not to cut live or dead trees for the purpose of sale or personal uses.

No signage - Not to erect or permit to be erected any commercial advertising signs on the leased premises.

No mineral rights - Nothing in this lease shall confer upon the Tenant any right to minerals underlying the land. Such mineral rights are hereby reserved by the Landlord together with the full right to enter upon the premises and to bore, search, excavate, work and remove the minerals, to deposit excavated rubbish, to pass over the leased premises with vehicles and to lay down and work any railroad track or tracks, tanks, pipelines, power lines and structures as may be necessary or convenient for the above purpose.

c) The Landlord agrees to:

2. Environmental Matters

Noise - The Tenant shall ensure that no undue noise or other nuisance emanates from the leased premises or from the operations of the Tenant on the leased premises.

Tenant must carry insurance - For the term of the lease, the Tenant shall maintain insurance, insuring the Tenant while performing on the leased premises. The Tenant shall furnish a Certificate of Insurance at the Landlord's request and agrees that all applicable insurance policies shall name the Landlord as an additional insured and require the insure to give notice of termination of coverage to the Landlord.

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Section 6 : Resolving Differences And First Rights Of Refusal

1. Resolving Differences

Disagreements Will Be Submitted to an Arbitrator(s) Any differences between the parties as to their several rights or obligations under this lease and to the affairs of the leased premises that are not settled by mutual agreement after thorough discussion, shall be referred to the arbitration of a single arbitrator, if the parties hereto agree upon one; otherwise to three arbitrators, one to be appointed by each party and a third to be chosen by the first two named before they enter upon the business of arbitration. The award and determination of such arbitrator or arbitrators, or any two of such three arbitrators, shall be binding upon the parties hereto and their respective heirs, executors, administrators and assigns.

2. Municipal Zoning Restrictions

The landlord acknowledges that the Tenant will be conducting agricultural operations on the leased premises and hereby warrants that the leased premises are properly zoned for such use. If these operations are not in full compliance with municipal authorities, bylaws or other municipal or provincial legislation subsequent to the signing of this lease agreement, such that the Tenants ability to conduct agricultural operations is substantially impaired or the number of livestock that the Tenant can house on the leased premise is significantly reduced the Landlord and Tenant will renegotiate the rental amount, such amount to be determined by arbitration if the parties cannot agree thereon.

3. Rights of First Refusal

In the event that the Landlord receives a bona fide offer to purchase the leased premises which the Landlord is willing to accept, then the Landlord shall provide a copy of such offer to purchase to the Tenant within 48 hours of the receipt of such offer at which time the Tenant shall have a further 48 hours to confirm to the Landlord that the Tenant wishes to purchase the leased premises upon the same terms and conditions as set out in the offer to purchase failing which the Landlord shall be at liberty to sell the leased premises pursuant to the offer to purchase.

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Section 7 : Additional Agreements

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

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