Agricultural Tenancies Act 1990

The Act applies to any "owner" and any "tenant" of a "farm". "Owner" means any person for the time being entitled to the rents and profits of the farm (s 4(1)), capturing freeholders, life tenants, mortgagees in possession, trustees and Crown lessees. "Tenant" includes a sharefarmer and any sub-tenant or person whose right derives from the tenant, but expressly excludes a tenant who is employed by the owner (s 4(1)). The definition is therefore wide enough to cover oral licences, at-will occupancies and complex profit-sharing arrangements common in Australian agriculture.

The land must be not less than one hectare and wholly or mostly used or intended to be used for agricultural purposes. Urban fringe hobby farms, residential blocks with a kitchen garden, or land used principally for non-agricultural activities fall outside the Act. Conversely, a large grazing property, a vineyard, a citrus orchard, a dairy, a silvicultural plantation or a mixed cropping and bee-keeping enterprise all qualify.

Because the Act’s objects refer to "agricultural landowners and their tenants and sharefarmers", it directly affects the rural sector: family farmers, corporate agribusinesses, institutional investors in farmland, banks holding securities over farms, and government agencies that lease land for agricultural research or demonstration. Successors in title are bound because the statutory terms attach to the land and the definition of "owner" is ambulatory.

Former owners and former tenants also have standing under s 21(5) to seek orders concerning fixtures, compensation or accounts after the tenancy has ended. Trustees who are owners receive special protection in s 23: any compensation ordered to be paid by a trustee owner becomes a charge on the farm that can be registered under the Conveyancing Act 1919, but the trustee is not personally liable.

Indigenous land councils, statutory land trusts and holders of perpetual leases under the Crown Land Management Act 2016 may also fall within the Act where they grant agricultural tenancies. The exclusion of employed tenants means that sharemilkers or managers paid a salary plus a profit share may or may not be covered depending on the characterisation of their relationship; the distinction is frequently litigated before NCAT.

The Act creates a balanced but asymmetric set of rights. Tenants enjoy:

• The right to insist on a written agreement (s 5(1)) and to have disputed terms settled by NCAT.
• The right to carry out Schedule 1 improvements without consent and to receive fair compensation (s 7(2)).
• The right to compensation for improvements made with consent or with NCAT approval (ss 6, 7).
• The right to compensation for general improvement through superior management (s 18) and for stored products (s 19).
• The right to remove fixtures after reasonable notice, subject to the owner’s election to purchase (s 10).
• The right to receive accounts and to have a joint record of condition (ss 12, 13).
• Protection against contracting-out (s 27).

Owners enjoy parallel rights to compensation for their own improvements (ss 8, 9, 16), a right of entry (s 11), the ability to purchase tenants’ fixtures (s 10(4)), and a right to compensation for deterioration (s 19A). Both parties must keep accounts (s 13) and cooperate in making records (s 12).

The sustainability object in s 3(a) is framed as an exhortation rather than a directly enforceable duty, but it colours the Tribunal’s assessment of what is "suitable and desirable" under ss 7(1)(c) and 9(1) and what constitutes "good farm management" for the purposes of ss 18 and 19A.

Compensation is almost always "fair compensation" rather than a fixed formula. Section 15(2) requires valuation by reference to the financial returns expected by a hypothetical incoming tenant (expressly excluding sharefarming). Section 17 permits regard to the parties’ financial resources, expected returns "and other factors", introducing a discretionary equity that can lead to contested expert evidence on soil science, farm budgeting and discount rates.

Termination rights are tightly prescribed. A year-to-year tenancy requires six months’ notice expiring at least one month after the end of the annual cropping program (s 14(4)–(5)). Sharefarming for crop growing requires one month’s notice after the cropping program ends (s 14(3)(a)). These rules cannot be overridden except by agreement or for breach.

The Act is civil rather than criminal. It contains no offence provisions or infringement notice regimes. Enforcement occurs exclusively through NCAT. Section 21(1) lists the available orders: specific performance, injunctions (expressly authorised even where equity would not otherwise grant them – s 21(2)), compensation, termination, possession, variation of earlier orders, interim orders and ancillary relief. The Tribunal cannot award more than $500,000 or order works whose cost exceeds that sum (s 21(3)); larger claims must proceed in a court of competent jurisdiction.

An order for payment by a trustee owner is registrable as a charge on the land (s 23) but is not recoverable personally against the trustee. Failure to comply with an NCAT order can be enforced as a contempt or, in the case of monetary orders, as a judgment of the Local Court or Supreme Court under the Civil and Administrative Tribunal Act 2013.

Because the Act implies terms into every tenancy, breach also sounds in contract. A party may therefore elect to sue for damages at common law or seek the statutory remedies. The three-month limitation in s 20(2) applies only to applications "under this Act"; common-law claims may be subject to the Limitation Act 1969.

The Act sits within a web of interlocking statutes. Its sustainability object expressly imports s 6(2) of the Protection of the Environment Administration Act 1991, which lists the well-known principles of ESD (precaution, intergenerational equity, conservation of biological diversity, internalisation of external costs). Schedule 1 item 4 refers to the Biosecurity Act 2015 for the definition of "pests" and for authorised destruction or control. Item 10 refers to the Food Act 2003 for building standards. Service rules in s 28 now align with modern electronic-service provisions appearing in the Electronic Transactions Act 2000.

Dispute resolution is routed through NCAT, so the Civil and Administrative Tribunal Act 2013 and its procedural rules govern practice and procedure, costs (generally no costs unless special circumstances), and enforcement of orders. The Act expressly preserves NCAT’s powers under that statute (s 21(6)).

Interaction with the Conveyancing Act 1919 arises in two places: s 23 permits registration of compensation charges under s 187 of the Conveyancing Act, and the law of fixtures at common law is modified by s 10. The Act does not displace the general law of waste, although s 19A provides a statutory analogue for deterioration.

Where the land is Crown land, the Crown Land Management Act 2016 may impose additional constraints on the owner’s power to grant tenancies or to consent to improvements. If the farm is subject to a mortgage, the mortgagee’s rights under the Real Property Act 1900 or Conveyancing Act must be considered before a tenant can remove fixtures that might affect the security.

The Act does not apply to residential tenancies (expressly excluded from the owner’s entry right in s 11(2)) and is distinct from the Residential Tenancies Act 2010. Sharefarming arrangements that are in substance joint ventures rather than tenancies may fall outside the Act and be governed by partnership or contractual principles.

The most significant modernisation occurred in 2001 when the Agricultural Tenancies Amendment Act 2001 substituted entirely new Parts 2, 3 and 4, repealed the old arbitration divisions, inserted the ESD object, expanded the definition of "tenant" to include sharefarmers explicitly, introduced the general-improvement and deterioration provisions (ss 18, 19A), and aligned compensation language with contemporary valuation practice. The 2001 amendments were driven by a recognition that the 1941 Act was outdated, that oral agreements were causing costly disputes, and that environmental degradation required statutory encouragement of sustainable practices.

The Agricultural Tenancies Amendment Act 2012 substituted Part 4 again, replacing the former arbitration and mediation regime with direct NCAT jurisdiction, removed the obsolete Farm Arbitration Committees, and made consequential changes to limitation periods and order-making powers. This reform was part of a broader NSW government policy to consolidate civil dispute resolution into a single tribunal and to reduce costs for rural litigants.

In 2013 the Statute Law (Miscellaneous Provisions) Act (No 2) made minor amendments to update cross-references to the new NCAT legislation. The 2024 amendments (Statute Law (Miscellaneous Provisions) Act 2024 No 25) updated s 13 (accounts) and comprehensively rewrote s 28 (service of documents) to accommodate contemporary electronic communication methods and to align with similar provisions in other NSW Acts. These changes reflect the gradual shift from paper-based rural transactions to digital service.

No regulations have been made under the Act since the repeal of the 2006 Regulation, leaving the Schedule 1 list as the primary mechanism for prescribing tenant improvements as of right.

Because most matters are determined by NCAT, reported appellate decisions are sparse. The Supreme Court has on occasion granted leave to appeal under s 83 of the Civil and Administrative Tribunal Act 2013 on questions of law. Controversies have centred on three areas.

First, the characterisation of arrangements as "tenancies" or "sharefarming arrangements" within s 4. In several NCAT decisions the Tribunal has emphasised substance over form: a contract labelled "joint venture" but conferring exclusive possession and requiring the "tenant" to bear all input costs while sharing gross proceeds has been held to fall within the Act.

Second, the valuation methodology in s 15(2). The requirement to value improvements by reference to returns to a hypothetical incoming tenant (expressly "not being a sharefarming arrangement") has produced disputes over discount rates, residual value of fertiliser, and whether climate variability should be factored into the hypothetical tenancy. Expert agronomist and valuer evidence is almost always required.

Third, the interaction between s 19A deterioration claims and express authorisations in the agreement. Owners have argued that broad "husbandry clauses" authorising the tenant to manage the farm "in accordance with its own methods" waive s 19A rights; tenants counter that only specific authorisation of the impugned practice displaces the statutory right. The Tribunal has tended to construe waivers narrowly, consistent with the anti-contracting-out policy in s 27.

No High Court or Court of Appeal decision has yet settled the meaning of "fair compensation" or the precise content of the ESD obligation in the agricultural context. The paucity of superior-court authority is itself a source of uncertainty for practitioners.

Most practitioners miss that the three-month limitation in s 20(2) runs from "the relevant dispute or other matter arises or the end of the tenancy, whichever is the later". A tenant who discovers deterioration-related damage years after vacating may still be within time if the dispute "arises" only upon discovery. Conversely, an owner who delays issuing a compensation claim for improvements may be statute-barred even if the tenancy has not yet ended.

The definition of "improvement" in s 4(1) excludes repair or replacement of items already on the farm when the tenant entered "except as provided by this Act". Schedule 1 item 9 nevertheless permits certain repairs to buildings after notice if the owner fails to act. The interplay between the exclusion and the exception is a frequent trap; many tenants have been denied compensation because they failed to give the prerequisite notice.

Section 10(4) gives the owner an election to purchase a fixture upon notice of removal. The election must be made "at any time before the end of the notice period". If the owner serves the purchase notice late, the tenant may remove the fixture and the owner loses the statutory right. The election converts the fixture into an "improvement" for which compensation is assessed under s 7(2), not market value.

Sharefarmers must be alert to the differential notice periods and the special valuation rule in s 19(2)(b). A sharefarmer entitled to 50 % of produce receives only 50 % of the value of stored grain left on the farm, even though the grain may have been produced entirely by the sharefarmer’s labour and inputs.

The sustainability object is not merely aspirational. When NCAT determines whether an improvement is "suitable and desirable" under s 7(1)(c) or assesses "good farm management" under s 18 or s 19A, the Tribunal routinely receives evidence on whether the practice complies with the ESD principles. A tenant who clears native vegetation without approval or applies fertiliser in a manner likely to cause algal blooms may find both compensation denied and a counter-claim for deterioration upheld.

Finally, the charge created by s 23 over trustee-owned land survives transfer to a new owner who takes with notice. Purchasers of farmland must therefore conduct searches in the General Register of Deeds for any registered s 23 charges, a step rarely taken in ordinary conveyancing.

Compliance begins with a written agreement that addresses every default term in Part 2 and expressly records the parties’ intentions on improvements, compensation rates (where they wish to depart from "fair" compensation), notice periods, and management standards. The agreement should annex a detailed condition report completed jointly at commencement (s 12) with photographs, GPS coordinates of fences and soil-test results. A second report should be prepared at termination.

Owners should maintain a register of all improvements carried out by either party and insist on written consent or NCAT approval before non-Schedule 1 works. Tenants must give the precise notice required by s 10(3) before removing fixtures and should photograph the site before and after removal to prove compliance with the make-good obligation.

Both parties must keep proper accounts. For sharefarming, this means contemporaneous records of all inputs, harvest weights, sales and expenses. Requests for copies under s 13 should be made in writing and acknowledged.

Sustainability compliance requires more than lip service. Parties should incorporate by reference an environmental management plan that references the NSW DPI guidelines on soil health, native vegetation and nutrient management. Where fertiliser is applied, keep records demonstrating compliance with the Biosecurity Act 2015 and the POEO (General) Regulation.

When a dispute arises, gather evidence early: soil tests, satellite imagery, agronomist reports, financial budgets demonstrating returns to an incoming tenant. Because NCAT is not bound by the rules of evidence, hearsay and opinion evidence from experienced farmers can be persuasive, but tribunals still prefer independent expert reports on valuation.

Before entering any new tenancy, search the General Register of Deeds for s 23 charges and obtain a statutory declaration from the owner that no compensation orders are outstanding. On termination, serve any termination notice by a method that complies with the updated s 28 (email to a designated address is now sufficient if previously specified).

For larger corporate owners or institutional lessors, implement a farm-tenancy playbook that mandates annual joint condition reviews, quarterly account exchanges and mediation before NCAT applications. Insurance policies should be checked to confirm that both owner and tenant improvements are adequately covered and that public liability extends to activities on the farm.

Finally, because the Act is protective legislation, any clause that purports to exclude statutory rights is void to that extent (s 27(1)). Drafting must therefore use the language of "agreement as to amount" or "express authorisation" rather than blanket waivers. Regular review of agreements against the current version of the Act (including any new regulations) is essential; the 2024 amendments to service provisions mean that older templates may no longer protect against claims of invalid notice.