Q: I lease out some of my farmland for cash rent. My tenant didn’t pay any rent to me this year, but says he’ll do better next year and will pay me then. I don’t believe his promises. I want my money and I want him out. Can I do anything?
A: A farm lease is, essentially, a commercial or business lease and those laws apply. Most provinces have their own legislation pertaining to these questions, so as always, check with a good local lawyer who specializes in this area.
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If you have a tenant who’s in breach of the lease, there are a number of things to think about to get a legal remedy.
First, the nature of the breach is important. Provincial laws and case law treat some breaches differently. Failure to pay rent is the most straightforward. Most provinces’ laws state that if a tenant is in arrears for a specified time (often two or three months), then your remedies arise. It’s usually easy to show whether a tenant has paid or not.
Failure to properly care for the land, improper use of chemicals or seeding crops prohibited by the lease can all amount to non-monetary breaches of the lease. Check your provincial statutes to see if those breaches are treated the same as a failure to pay rent. If they’re not, then your case to evict is not as strong.
Assuming the breach of your lease is one the law allows you to take legal action on, what can you do?
One option is to “distrain” for rent. This means a landlord can seize the property of the tenant, as long as that property is located on the land that is leased or was located there but was moved elsewhere by the tenant in an attempt to avoid paying you.
If you hire a bailiff to seize these items, the bailiff must give the tenant notice as to what was seized, indicate an amount that must be paid to release the item and indicate a time frame within which full payment must be made.
The provincial legislation usually sets out that time frame and any other requirements.
If the tenant pays, then you give his belongings back and he is entitled to carry on with the lease unless he breaches again. If the tenant doesn’t pay, then you are entitled to sell his goods as long as it’s done in a commercially reasonable manner.
You cannot, for example, seize a brand-new combine and sell it for $5,000 just to satisfy a rent payment. Your bailiff can seize enough goods to pay the debt to you plus pay his costs, but he has to be reasonable and not overseize.
It is important to note that if you distrain for rent you cannot lock out the tenant or terminate the lease. These are almost always mutually exclusive remedies.
Landlords who seize through distress, plus terminate the lease, are almost always found liable for a wrongful seizure or termination, and you can end up paying money to the tenant.
If there are no assets on the land to seize, you can terminate the lease instead. You can sue the tenant for the money owing, get a judgment and get the sheriff to seize goods to satisfy the judgment. Once you have a judgment, you are not limited to items on the leased land. The sheriff can seize any assets liable to seizure that belong to the tenant-debtor.
Proceed cautiously and get good advice from a lawyer as well as a reputable and experienced bailiff.
Rick Danyliuk is a practising lawyer in Saskatoon with McDougall Gauley LLP. He also has experience in teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
