Is a written farming lease agreement required and if so, at what conditions?

1. Is a farming lease agreement mandatory? 

Under the former Farming Lease Law, a written agreement was often not concluded, resulting in a lot of legal uncertainty between tenants and landowners. As a result, there was a lot of ambiguity about whether leases were still in place, to whom they were being made and for what duration, and so on. 

The former Farming Lease Law included an obligation to put the lease in writing. But if there was no written agreement, the validity of the lease was not affected. Thus, an oral lease was valid anyway. 

In contrast, the new Farming Lease Decree provides that a written agreement is mandatory. 

For the sake of legal certainty, the minimum information that must be included in the written lease agreement is expressly stated, more specifically:

1° the identity of the contracting parties 

For natural persons, these are the first name, surname, residence, the identification number in the National Register or in the BIS register of the Crossroads Bank for Social Security and, if these data are unknown, the date and place of birth. 
 
For legal entities, this includes the company name and registered office, the company number and the identity of the persons authorised to represent the legal person;

2° the start date of the farming lease;
 
3° the duration of the farming lease;
 
4° the cadastral identification of the leased land, included in the extract from the cadastral register, indicating at least the municipality in which the parcels are located, the division, section, parcel number;

5° the non-indexed cadastral income of each parcel, as well as the agricultural region in which each parcel is located; 

6° the farming lease price, the maximum of which is determined in accordance with the Farming Lease Decree;
 
7° the way in which the lease price can be paid and, if applicable, the account number into which the lease price must be paid.

Notwithstanding the above, a legally valid farming lease agreement will exist, even if it is not written, when such failure is due to the landowner refusal to draw up a written lease. The Flemish Parliament thus wanted to prevent the tenant from being the victim of the owner's attitude. 

2. The Farming Lease Decree provides for sanctions

Should a party refuse to draw up a written agreement, the most diligent party can force the other party to written document through a court decision.  

Each party has the right to go to court if the other party refuses to draw up a written lease agreement. This right applies to both existing and new leases.

The Farming Lease Decree also introduces a penalty mechanism for the party that refuses to cooperate with a written contract.

If the landowner refuses to draw up a written contract and the tenant's claim is granted by the court, then, regardless of the commencement date of the lease, the lease will be renewed on the date the judgment becomes final. In that case, there is an irrebuttable presumption in favour of the tenant, regardless of whether the lease actually started earlier. This therefore implies that a lease agreement exists between the parties and has been proved.

If the tenant refuses to draw up a written contract, then the landowner can claim the rescission of the contract.
 
The sanction only applies to the unwilling tenant or landowner if the refusal is sustained until the matter is taken into consideration. The parties may therefore still reach an agreement, for example during the conciliation procedure or even during the proceedings on the merits. In that case, the sanction will not apply. 

3. Proof by the tenant

If no written lease agreement was concluded, the tenant can provide proof of the existence of a lease and of the lease conditions by any means, including witnesses and presumptions. 

In addition, the tenant may prove the existence of a lease by submitting proof of a personal offer of payment, to which the landowner has not responded, by a summons in conciliation before the competent court within six months of the offer. The offer must be confirmed within 15 days, stating the existence of a farming lease, as well as the year and land to which the payment relates.

4. What are the steps to follow in practice?

• Step 1: ask your contracting party to record, complete and/or sign the lease in writing;
• Step 2: in case of refusal or failure, send a formal notice stating the sanctions he/she risks; 
• Step 3: if there is no proper reaction, it is best to go to court. 

5. What if there is a discussion about conditions? 

If no discussion arises about the agreement in writing, but rather about its content, the sanctions mentioned will not apply. 

Indeed, it may happen that while the parties agree that a farming lease exists and they also want to put the agreement in writing, there is a discussion about the conditions or certain clauses. 

Moreover, since certain clauses and conditions are new, the court will be able to easily settle many disputes in this regard based on the starting date of the lease. Indeed, if the lease pre-dates the Farming Lease Decree, many of these clauses could never have been agreed when the contract was concluded, simply because they did not exist at the time. 

It is clear that a discussion about the conditions does not entitle one to the sanction mentioned here before.

6. The minimum duration of a farming lease

The former Farming Lease Law stipulated that the lease could not be shorter than nine years and that the lease was automatically renewed for nine years if no valid notice of termination had been given before the end of the current period, even if the initial period of use exceeded nine years. If a shorter time had been stipulated, the lease period was automatically extended to nine years.  

These provisions are repeated in the Farming Lease Decree.

Regardless of the duration of the lease and notwithstanding any agreement to the contrary, the tenant may at any time terminate all or part of the lease by giving at least one year's notice.

The parties may terminate the current lease by mutual agreement, but such termination must be enacted in an authentic deed or in a declaration made before the court.

In addition, the Farming Lease Decree also applies to long lease agreements concluded for a duration of less than 27 years. This is to prevent that the Flemish Farming Lease Decree would be avoided by using the concept of the long lease.

This is the result of changes of the Civil Code made in 2021 with regard to the concept of the long lease. The minimum duration of the long lease right was thereby reduced from 27 to 15 years, making it attractive as an alternative to the ordinary farming lease. This change was apparently prompted by the consideration that the 27-year duration proved too long for certain real estate constructions.

If you would like more information on this subject, please do not hesitate to contact our specialists: +32 (0)2 747 40 07 or info@seeds.law.