Other types of agricultural leases

There are some very specific leases that are not covered by the statute of the farm, but they are highly regulated. Some leases with a duration of more than 18 years also have interesting specificities that we present to you in our 4th article on rural leases.

Exceptions to the status of tenancy 

There are many exceptions to the status of tenancy. We present the main ones.

The commodat lease (or loan for use)   

This is a free rental of rural property. In the absence of payment of rent, this type of tenancy has a great deal of latitude in its terms: the duration is free, as is the notice period for terminating it.  

Renting to a private individual 

The rental of agricultural land to a private individual who will not be carrying out an agricultural activity is not governed by the status of the farm but only by the civil code. If the land is an annex to a dwelling house, the 1989 law on residential premises applies.

Agreements for the provision of services by the SAFER

The SAFER can set up paying leases between a landowner and a farmer outside the statute of fermage. The duration of the lease (maximum 6 years), the amount of rent, etc. are less strict than for a rural lease. However, it is not possible to renew this type of lease more than once. It should also be noted that the SAFER will charge annual management fees.

Precarious occupation agreements

These rentals are not covered by the status of tenant farming (article L 411-2 of the rural code) but can only be made in very specific situations:  

• Development of property in the context of an estate in dispute or by court order 
• Temporary continuation of a terminated or non-renewed rural lease to the lessee 
• Property whose agricultural use is being changed: land that has become buildable but not yet constructed.

Small area leases

Below a threshold fixed at the level of each department, the rental of agricultural land is not subject to the status of farm tenancy, which means that the price and duration of the rental can be freely decided.

Other types of agricultural leases

There are other types of leases which are not covered by the statute of fermage but are still subject to payment. These are leases concluded for a period longer than 18 years. 
These leases generally allow the amount of the rent to be increased according to a percentage set out in the prefectural decree setting the rent.

The long-term lease

With an initial duration of 18 years, it is automatically renewed for a period of 9 years at its end.

The 25-year lease

This lease may or may not include an automatic renewal clause.  
If the tacit renewal clause is included, the lease is renewed at its 25-year term from year to year. Each party has the possibility to terminate the contract each year without having to give reasons. The notice then takes effect at the end of the 4th year following the year of termination. This lease is also called a long-notice lease. 
If the tacit renewal clause is not included, the lease ends at the end of the 25 years or, for leases concluded since 15 July 2006, it is renewed for 9-year periods.

The career lease

It is concluded for a minimum period of 25 years and ends when the farmer reaches retirement age. A renewal or transfer of the lease is therefore excluded.

The transferable lease

Also concluded for a minimum term of 18 years, it gives the lessee the possibility of transferring it to a transferee of his choice during the lease or its renewals. The lessor may object to the renewal of the lease at the end of the term, but in this case must pay the farmer an eviction indemnity.

The long lease

An emphyteutic lease is concluded for a period of between 18 and 99 years and gives the lessee (the emphyteutic lessee) very high rights similar to those of an owner and allows him or her to mortgage the property, for example. In return, the lessee loses the right to receive compensation for any improvements made to the property at the end of the lease.

Tax deductions

Leases with a minimum duration of 18 years allow the owner to benefit from an abatement for the calculation of transfer duties (article 793-2 of the General Tax Code) and for the calculation of the Impôt sur la Fortune Immobilière (IFI).Leases with a minimum duration of 18 years allow the owner to benefit from an abatement for the calculation of transfer duties (article 793-2 of the General Tax Code) and for the calculation of the Impôt sur la Fortune Immobilière.

Transfer tax :  

• Exemption of ¾ of the value up to €300,000 
• Exemption of 50% of the value above that 

IFI :  

• Exemption of ¾ of the value up to €101,897 
• Exemption of 50% of the value above that

Author's note: The information we present is purely informative and pedagogical and cannot replace an analysis carried out by a professional in rural law. In case of conflict, difficulty, etc., we invite you to contact one of these professionals (lawyers, notaries, rural law experts, etc.).