Lease of Agricultural Land

Lease of Agricultural Land

Author: Nino Bostič Sluga

In practice, it was not uncommon for parties to conclude lease contracts for agricultural land, often for free or for a small, nominal lease fee, without complying with the mandatory provisions of the Agricultural Land Act (ZKZ)[1] regarding the content of such contracts, and in particular with the provisions regarding the procedure for concluding a lease contract. The ZKZ provides that the provisions of the ZKZ governing the transfer of agricultural land apply mutatis mutandis to the lease of agricultural land. This means that the lessor is obliged to carry out the same procedure before the competent administrative unit as he/she would in the case of disposal of agricultural land. A lease agreement not concluded in accordance with this procedure is null and void.

This previous regulation of the leasing procedure for agricultural land was substantially amended by the Act Amending the Agricultural Act (ZKZ-G), which was adopted by the National Assembly on 16 March 2022 and entered into force on 8 April 2022.The new Article 25b of the ZKZ-G stipulates that the entire chapter on the lease of agricultural land applies only to agricultural land owned by the Republic of Slovenia and local communities. However, for agricultural land owned by natural persons and legal entities governed by private law, the Obligations Code (OZ) shall apply.

Under the new rules, owners of agricultural land, with the exception of the State and municipalities, may therefore lease such land without any formal procedures before the competent administrative units, and may also freely negotiate the rights and obligations arising from such leases within the framework of the general rules of the OZ.

[1] Official Gazette of the Republic of Slovenia [Uradni list RS], No. 59-3454/1996 of 25 Oct 1996, as amended.