Lease or General Tenancy Agreement

My husband and I own a farm which has a home on a separate title and three other paddocks each on separate titles. We are looking to rent out the home to someone who is going to live in the house and run their cattle farming business.

I am looking for some guidance on whether a general tenancy agreement can be put in place to rent out the house or would we require a farm lease to be put in place. Our insurance provider has indicated a general tenancy agreement is fine. We also have a farm insurance policy in place to cover liability.

Many thanks

 

You are leasing the property for a business - I'd be leaning towards a commercial lease.

There are more expenses with this type of property which aren't recoverable under a residential tenancy agreement.

• Insurance - it's a business premises so the tenant will have an obligation to have public liability insurance
• Water and service charges - commercial lease will allow full recovery not just usage (if you have sewer or water entitlements from river/dams)
• Fencing maintenance is tenant's responsibility
• Land tax may be an issue (need accounting advice)
• GST can be passed on to the tenant.
• It's a place of work for the demand, a lease reflecting the risk would be more appropriate.

 

thanks, much appreciated