Purchase and Lease

The Land Lease Transactions Act governs how and when land lease agreements must be reported to the competent authority and what measures the authority may take (which may include objections, if applicable). The Agriculture Department carries out the duties under the Land Lease Transactions Act (LPachtVG) in the Fulda district.

The scope of application of this Act covers all newly concluded agricultural lease agreements pursuant to § 585 of the German Civil Code (BGB), as well as changes to the leased property, the lease term, and the contractual obligations under existing agricultural lease agreements. Excluded, pursuant to Section 3 of the Agricultural Lease Act (LPachtVG), are agricultural lease agreements between certain family members and agricultural lease agreements concluded as part of an administrative proceeding.

The disclosure of agricultural lease agreements is governed by the following provisions:

1. Notwithstanding the provisions of § 3 LPachtVG, the lessor must notify the competent authority of the conclusion of a land lease agreement (>1 ha) by submitting the agreement or, in the case of an oral agreement, by providing the relevant details of the land lease agreement. The same applies to agreed-upon amendments to the provisions contained in a land lease agreement subject to notification regarding the leased property, the lease term, and the contractual obligations, provided that the amendment was not reached by way of a settlement before a court or before a professional lease arbitration board. The tenant is also entitled to make the notification required under sentences 1 and 2.
2. The conclusion of a land lease agreement and any amendments to the agreement must be reported within one month of their adoption.

The lessor or lessee must notify the Agricultural Office within one month of any new lease agreements or amendments to existing lease agreements.

Legal basis

Section 2 of the Act on the Notification and Objection to Agricultural Lease Agreements (Agricultural Lease Transactions Act—LPachtVG) of November 8, 1985 (BGBI. I, p. 2075), as last amended by Article 15 of the Act of April 13, 2006 (BGBI. I, p. 855), in conjunction with the Hessian Implementing Ordinance to the Land Lease Transactions Act of February 21, 1989 (GVBI. I, p. 92), governs the notification of land lease agreements.

 Benefits of Listing Farm Lease Agreements

The Land Lease Transactions Act (see above) requires that concluded lease agreements be reported. Failure to report may result in regulatory sanctions. Regardless, entering into a written lease agreement and filing a report with the relevant district administration offers several advantages, such as:

• Legal certainty and, as a result, the prevention of disputes such as:
• in the event of the loss of boundary markers during the lease term,
• when converting farmland to pasture,
• when converting grassland to cropland,
• If you have questions about the maintenance of pasture fences and pasture shelters,
• For questions regarding entitlement to payment claims after the lease expires.
• In the case of subsidy programs, the lease agreement provided can be used to demonstrate the right of use to the granting authority.

The Act on Measures to Improve Agricultural Structure and Safeguard Agricultural and Forestry Operations governs the approval process for the sale of agricultural and forestry properties through legal transactions.

The focus of the approval process is the exercise of the right of first refusal under settlement law. In this context, the right of first refusal is granted to financially sound agricultural and forestry operations over non-farmers. If a permit is not required, a certificate of no objection is issued upon request. The land registry office requires this document to record the change of ownership.

In Hesse, all legal transfers (such as purchase agreements, transfer agreements, gift agreements, exchange agreements, etc.) of agricultural and forestry land larger than 0.2499 ha are subject to approval under Section 2 of the Real Property Transactions Act.

For parcels of land 0.50 ha or larger, the settlement authority may, under the Reich Settlement Act, exercise a right of first refusal.

The licensing authorities are the district agricultural authorities; in the Fulda district, this is the Agricultural Department. The Regional Council in Kassel is the authority with oversight over the licensing authority.