Can the court refuse a notice of termination of a farming lease or limit its area?

Flemish Farming Lease Decree explained (Part 4)

1. Application for the validation of the termination

When the landowner has given notice of termination to the tenant, the tenant must consent in writing. If the tenant fails to do so, the notice of termination will expire if the landowner does not apply for its validation within a period of three months of the notice to the competent court.

2. Application to declare a notice invalid

In addition, the tenant can ask the court to declare a notice invalid if during the notice period it already appears that a serious reason for termination cannot be fulfilled or that the landowner will not implement his intentions.

The court may refuse a notice:

• When the reason for termination is that an environmental permit was granted for urban development acts or for mining and no proof of that environmental permit can be presented;
• When a farming lease is terminated for serious reasons or because the landowner wishes to exploit the property himself or transfer its exploitation to privileged relatives, and the reasons given for termination are not considered serious and well-founded or when it appears from all the circumstances of the case that the lessor will not implement his intentions;
• Where a farming lease is terminated for reasons of afforestation or nature realisation and the viability of the farm in question is seriously disrupted as a result;
• In case the tenant has his main profession in agriculture, and the total exploited area of the farm of the future operator would have a larger area than the maximum area set by the Flemish Government;
• For any further expansion if the agricultural company of the future operator already extends over an area greater than the maximum area.

The court may limit the validation of the termination in case of

• termination for the purpose of afforestation and nature realisation. He may limit the validation of the termination to certain parcels of land or to a certain surface, but only for the purpose of ensuring the viability of the existing farm.

3. The cases in which the court may validate a termination for personal exploitation by the lessor

If the tenant has his main profession in agriculture, the judge may only declare the termination for personal exploitation by the landowner valid in the following cases:

1. the natural person who, according to the notice, will continue the agricultural exploitation, has his main profession in agriculture and the land in question will be exploited within the framework of the agricultural business of that natural person;
2. in case a legal person will continue the exploitation, the working partner, the limited partner, or the director of the company must have their main profession in agriculture and the land in question will have to be exploited within the framework of the agricultural business of the legal person.

If the seriousness of the declared personal exploitation is disputed by the tenant, the landowner must clarify the manner in which the persons designated as future operators in the notice will carry out the personal, actual and continued exploitation and it will also have to be demonstrated by the landowner that these persons are actually capable of doing so and cumulatively satisfy the following conditions:

1° they possess a certificate or diploma issued after an agricultural course or awarded by an agricultural or horticultural school;
2° these persons have been farming for at least one year during the past five years;
3° these persons have effectively participated in an agricultural operation for at least one year.

4. What is considered a serious disruption of business operations? 

The Flemish Farming Lease Decree lists the situations that count as a serious disruption of the viability of the tenant’s farm.

These include among others the following situations:

• the termination concerns part or all of the house plot of the tenant’s farm;
• the area of the parcels for which the termination was given exceeds one-fifth of the total area of the tenant’s farm;
• the tenant realises the reason for the termination himself or undertakes to realise it within a period of one year after notification of the termination;
• the tenant voluntarily implements or undertakes to implement management measures or agricultural practices beneficial to the environment, the climate and nature within a period of one year from the service of the notice of termination;
• the tenant or his partner is a farmer in main occupation under the age of 40 or can appoint from among his privileged family members a successor who is younger than 40 years of age;
• the termination is not made to achieve the objective of a land development project, nature development project or land consolidation project;
• the gross operating result of the tenant farmer’s farm at the time of the termination is less than a minimum amount of EUR 40,000 per farm manager, will fall by more than 10 per cent as a result of the termination or will fall below the minimum amount of EUR 40,000 per farm manager;
• the tenant is an operator of a farm that applies organic production or is in the process of converting to an organic production method in accordance with relevant European legislation.

5. Can the court refuse a notice because of the surface of exploited farm land?

If the tenant has his main profession in agriculture, the judge can refuse to declare the termination valid if the total exploited surface of the farm of the future operator would exceed the maximum surface as determined by the Flemish Government.

The court may also declare the termination invalid for any further expansion if the future operator’s agricultural company already extends over a surface greater than the maximum surface.

The Flemish Government determines the maximum profitability surfaces. These surfaces are reviewed at least every five years. They are determined in each province according to the agricultural districts defined in the Royal Decree on the delimitation of the agricultural districts of the State.
The Flemish Government may adjust the boundaries of the various agricultural regions.

If an agricultural operator acquires leased land in order to exploit it personally, the surface conditions applicable in the event of any termination shall be those that were in force at the time of acquisition.

The Flemish Government may further develop the procedure for determining the maximum profitability areas.

6. Can a new termination be made after an expiry of the termination or a refusal by the court?

If the notice has lapsed or has been declared invalid, no new notice can be given for any reason before at least one year has elapsed from the notification of the notice that has expired or has been declared invalid according to form.

That period is set at three years if the court has refused to validate the notice of termination because the reason given was unfounded.

The court may still declare valid a termination that should be declared irregular according to form if the irregularity cannot cast doubt on the nature or seriousness of the termination by the tenant, nor on the identity of the person in whose favour the termination is made.

The termination declared valid by the court or consented to in writing by the tenant shall be considered non-existent if the tenant remains and is left in possession of the leased property.

7. Conclusion

When the landowner terminates the farming lease, the notice of termination must include, under penalty of nullity, an indication that he will apply to the court for the validation of the termination in the event that the tenant has not served his written consent within 30 days of the notice of termination being sent.

If the tenant has not consented in writing, the termination will expire if the lessor has not requested its validation within three months of the notice.

Conversely, the lessee can also ask the court to declare a notice invalid if during the notice period it already appears that a serious reason for termination cannot be fulfilled or because the lessor will not implement his intentions. In that case, the lease will continue as if no notice has been given.

In the cases discussed in this article, the court can refuse to give notice of termination of the farming lease, or limit it in surface.

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In case you wish to terminate a lease or have questions about it, do not hesitate to contact our specialists: +32 2 747 40 07 or info@be.andersen.com.