How to Amend an Agricultural/Commercial Lease Agreement

What are comprehensive land consolidations and why they affect agricultural lease agreements

According to the latest estimates from the Supreme Audit Office published in January 2025, completing the remaining comprehensive land consolidations (CLCs) at the current pace will take at least another 50 years and require at least 150 billion crowns. This means the process will affect farmers and landowners for a whole generation.

Land consolidations are not a voluntary matter for all landowners. The proceedings are initiated by the land office if landowners holding more than half of the agricultural land area in the cadastral territory agree. The entire process typically takes four years, provided there are no complications. Landowners receive new land parcels that are supposed to be commensurate with the original ones based on criteria of price (max. 4% difference), area (max. 10% difference), and distance (max. 20% difference).

For agricultural lessees, land consolidations present a major legal challenge. The legal consequences of CLCs affect not only ownership rights but also contractual obligations – that is, agricultural and standard lease agreements. And this is where the problem begins, often catching not only farmers but also landowners by surprise.

Termination of agricultural lease relationships by law – what you need to know

Act No. 139/2002 Coll., on Land Consolidations, contains a key provision, Section 11(8), which stipulates that a decision on the exchange or transfer of ownership rights terminates existing lease relationships, temporary gratuitous use, and fixed-term leases for land parcels ex lege on 1 October of the current year.

Under current Czech legislation and case law, the term "lease relationships" also includes agricultural lease relationships. An agricultural lease is a specific form of lease where the lessee not only uses the leased property but also derives benefits (fruits) from it – for example, harvesting agricultural crops. Since the Civil Code (Act No. 89/2012 Coll.) regulates agricultural leases as a special type of lease, the provision on the termination of lease relationships during land consolidations also applies to them.

Key case law provides a clearer interpretation. The Prague Municipal Court (judgment ref. no. 10 A 107/2015-31) and the Supreme Administrative Court (decision ref. no. 2 As 186/2018-35) have consistently held that the implementation of land consolidations does not affect the existence or validity of lease agreements as such, but it does affect the established lease relationships concerning the object of the lease. In other words: the agreement remains valid, but the rights and obligations arising from it in relation to the specific original land parcels terminate.

Furthermore, the Supreme Court of the Czech Republic has emphasised that this principle of termination of contractual obligations also applies to other legal relationships not explicitly mentioned in Section 11(8) of the Land Consolidations Act – for example, a loan for use or a relationship similar to a loan for use. This means it is a broadly applicable rule that applies to all usage relationships concerning land parcels included in a CLC.

Why most clauses in agricultural lease agreements don't work

Landowners and farmers often think they can ensure the continuity of the lease with a simple clause in the agricultural lease agreement. For example, a phrase like: "All changes arising from a potential land consolidation (parcel numbers, area) will be specified in a new amendment to this agreement and will become part of it." However, courts have repeatedly found such wording to be ineffective.

Both the Supreme Administrative Court and the Prague Municipal Court have agreed that a general clause that merely anticipates a technical amendment to the agreement does not, in itself, prove the existence of a usage (lease/agricultural lease) relationship to the new land parcels after the land consolidation is completed. Such a provision does not provide sufficient legal certainty because it does not specify which particular land parcels the relationship will extend to after the CLC, nor what conditions will apply.

In their decisions, the courts point out that a landowner has the right to freely dispose of their property, and land consolidations are an ex lege reason for the termination of usage relationships. If a general clause were to automatically establish a new agricultural lease relationship for the new land parcels, it would constitute a disproportionate interference with the ownership right without a specific expression of the owner's will.

A correctly formulated clause should contain:

• The lessor's commitment to conclude a new agricultural lease agreement for the land parcels acquired in the CLC

• A precise deadline by which the new agreement must be concluded (e.g., within 2 months of the CLC decision becoming legally effective)

• Specification of the new agreement's effective date (e.g., as of the CLC's effective date or 1 October of the relevant year)

• The terms of the new agricultural lease – whether they will be identical to the original agreement or how they may change

• Specification of rights and obligations during the transitional period

Template agreements from the State Land Office contain precisely this type of commitment, which ensures continuity while respecting the legal consequences of land consolidations.

How to correctly set up an agricultural lease agreement before a CLC begins

In the case of land consolidations, prevention is always better than dealing with complications after the agricultural lease relationships have already terminated. If a landowner or lessee knows that land consolidations are underway or planned in the cadastral area, they should address this risk when concluding or amending the existing agricultural lease agreement.

You can expect comprehensive land consolidations in cadastral areas where they have not yet occurred – which is 9,186 out of a total of 12,232 cadastral areas in the Czech Republic. Information about the initiation of a CLC can be obtained from the State Land Office or on the official notice board of the municipality where the land is located. The notice of the initiation of land consolidation proceedings is posted for 15 days.

Basic rules for ensuring lease continuity:

1. Commitment to conclude a new agreement
The agreement should explicitly state that the lessor undertakes to conclude a new agricultural lease agreement with the lessee for the land parcels they acquire in the CLC. This wording should be clear and specific – e.g.: "The lessor undertakes to conclude a new agricultural lease agreement with the lessee with identical content for the land parcels of which they become the owner within the CLC, no later than 2 months after the decision on the comprehensive land consolidation becomes legally effective."

2. Setting a deadline for concluding the new agreement
The law does not specify a deadline by which the new agreement must be concluded. Therefore, it is advisable to agree on one in the contract. A period of 2 to 3 months from the date the CLC decision becomes legally effective is usually chosen to give both parties enough time to negotiate the terms.

3. Effective date of the new agreement
The new agreement should become effective no later than the date of termination of the original agricultural lease relationships, i.e., 1 October of the current year when the decision on the exchange of ownership rights becomes legally effective. This prevents a period of legal vacuum during which the lessee would have no right to farm the land.

4. Transitional arrangement for the period until the new agreement is concluded
Some template agreements contain a transitional provision that allows the lessee to continue using the new land parcels until a new agricultural lease agreement is concluded. However, this arrangement should be formulated to comply with the statutory termination of agricultural lease relationships and not contradict Section 11(8) of the Land Consolidations Act. Consult with the lawyers at ARROWS to ensure such a provision is legally sound – contact us at consultation@arws.cz.

Conditions of the new agricultural lease
The agreement may stipulate that the new agricultural lease will have the same conditions as the original one (rent per hectare, duration, rights and obligations), or it may allow for the adjustment of conditions to reflect changes arising from the CLC (e.g., change in the distance of land parcels, soil quality).

All these points should be clearly and comprehensibly formulated in the agricultural lease agreement. The ARROWS law firm regularly specialises in preparing agricultural lease agreements that protect the interests of both parties and take into account the specifics of comprehensive land consolidations. For a legal consultation, contact us at consultation@arws.cz.

What to do if the CLC has already been completed and you don't have a new agreement

A situation where the land consolidation has already become legally effective and the lessee has not concluded a new agreement for the newly created land parcels requires immediate action. From the date of termination of the agricultural lease relationships (1 October of the current year), the lessee has no legal title to use the land, which means they would be using another's property without legal grounds – i.e., possession without legal title. Such a state can lead to penalties and the loss of entitlement to subsidies.

If you find yourself in this situation, the following steps will help minimise the risks:

Step 1: Immediate contact with the lessor
The first and most important step is to immediately contact the lessor (landowner) and start negotiations to conclude a new agricultural lease agreement. If there is goodwill on both sides, the situation can be resolved relatively quickly. The ARROWS law firm can help you negotiate the terms of the new agreement and ensure your interests are fully protected. Write to us at consultation@arws.cz.

Step 2: Preparation of a new agricultural lease agreement
The new agreement should precisely define the subject of the lease – i.e., the specific newly created land parcels (parcel numbers, area, cadastral territory). The lawyers at ARROWS will ensure that the agreement contains all the legal requirements, including:

• a precise definition of the land parcels (with reference to the Land Registry after the CLC)

• the amount of rent and payment due dates

• the duration of the lease (fixed-term or indefinite)

• the rights and obligations of both parties

• grounds for termination and notice periods

• provisions for future land consolidations

Step 3: Written form of the agreement
An agricultural lease agreement for agricultural land must be in writing if it is concluded for a fixed term longer than two years. Otherwise, it is deemed that the lease was agreed for an indefinite period. However, a written form is always recommended – it provides legal certainty and serves as evidence in case of a dispute.

Step 4: Retroactive effect or swift conclusion
The law does not allow for the retroactive effect of an agreement to cover the period since the termination of the original agricultural lease relationships. Therefore, it is necessary to conclude the new agreement as soon as possible and to take into account the fact that the lessee is already de facto farming the land. If the lessor refuses to conclude a new agreement or wants to fundamentally change the conditions, contact the lawyers at ARROWS, who will negotiate a fair solution for you – consultation@arws.cz.

Step 5: Proving continuity of farming for subsidy purposes
If the lessee receives agricultural subsidies, they may be required to prove the continuity of land use. The absence of a valid agricultural lease agreement can cause problems during inspections. In such a case, it is necessary to present the new agricultural lease agreement to the subsidy authorities and explain the situation caused by the land consolidation.

Specifics of agricultural leases and notice periods

An agricultural lease has a number of special features that must be taken into account when concluding a new agreement after a land consolidation. These specifics arise from the provisions of Section 2345 et seq. of the Civil Code.

Lease year
For an agricultural lease, one lease year is considered the period from 1 October to 30 September of the following year, unless the parties agree otherwise. This means that a notice of termination for a lease of indefinite duration must be delivered so that the lease ends at the end of the lease year – i.e., on 30 September. The notice period is twelve months. Therefore, if you want to terminate a lease as of 30 September 2026, you must deliver the notice by 30 September 2025 at the latest.

Rent due date
Unless agreed otherwise, the rent for an agricultural lease is paid annually in arrears and is due on 1 October. This means that for the lease year 2024/2025 (from 1 October 2024 to 30 September 2025), the rent is due on 1 October 2025. The parties may agree on a different payment schedule – for example, monthly instalments – which reduces the lessor's risk of not being paid the rent.

Form of the agreement
If an agricultural lease is to be agreed for a fixed term of more than two years, the agreement must be in writing. Otherwise, it is deemed that the lease was agreed for an indefinite period. This is particularly important when concluding a new agreement after a CLC – if you want long-term stability, the agreement must be in writing.

Termination for health reasons
An agricultural lease contains a specific provision according to which the lessee can terminate the lease with a three-month notice period if they become unable to farm the land for health reasons, even if the lease was agreed for a fixed term. This right protects a lessee who cannot continue farming due to health problems.

Death of the lessee
The lease does not terminate upon the death of the lessee, unless the agreement provides otherwise. However, the lessee's heirs have the right to terminate the lease with a three-month notice period. This provision allows the heirs to end the lease relationship if they are not interested in or able to continue farming.

Change of lessor's ownership
If the land is sold, the lease rights and obligations pass to the new owner. This means that the lessee has the right to continue the lease with the new owner under the same conditions. However, the new owner can terminate the lease with a six-month notice period if they did not consent to the lease agreement. The lawyers at ARROWS can help you ensure that your lease agreement contains provisions that will protect you even in the event of a sale of the land – write to us at consultation@arws.cz.

Reasonableness of the rent
The rent for agricultural land in the Czech Republic typically ranges from CZK 2,500/ha/year to CZK 12,000/ha/year, depending on the type of land, soil quality, and region. After a land consolidation, the quality or distance of the land parcels may change, which should be reflected in the rent amount. The parties should pay attention to ensuring that the rent corresponds to the reality of the new land parcels.

The land consolidation process step-by-step – when to act

To be able to prepare for a land consolidation with sufficient notice, it is important to understand the individual phases of this process. The entire land consolidation process takes an average of four years, provided there are no significant complications. This means you have a relatively long time to prepare and ensure the continuity of your agricultural lease relationships.

Phase 1: Initiation of proceedings
Land consolidation proceedings are initiated by the land office, either on its own initiative or at the request of the owners of more than half of the agricultural land area in the affected cadastral territory. The notice of initiation is posted on the official notice board for 15 days. This is the first moment you should start to act – find out about the course of the CLC and start preparing to amend your agricultural lease agreements.

Phase 2: Initial meeting and election of a board of representatives
The land office convenes an initial meeting to which it invites the participants (landowners). At this meeting, a board of representatives is elected to represent the interests of the landowners throughout the process. Landowners have the opportunity to express their requirements and comments on the draft land consolidation.

Phase 3: Compilation of claims
The land office arranges for the compilation of the landowners' claims, which contains data on the price, area, distance, and type of land parcels. Landowners can file objections to the compilation within a specified period (usually 15 days).

Phase 4: Preparation of the Plan of Common Facilities (PSZ)
The Plan of Common Facilities is a key document that proposes measures in the public interest – for example, field roads, anti-erosion measures, water management measures, or nature conservation measures. This plan influences the final layout of the land parcels.

Phase 5: Exhibition of the draft land consolidation
The draft of the new land arrangement is prepared based on the landowners' requirements and the Plan of Common Facilities. The draft is made available for public inspection for one month. Landowners have the opportunity to submit comments and objections.

Phase 6: Decision on approval of the draft
The land office issues a decision approving the draft land consolidation if owners of at least 60% of the land area agree with it. An appeal can be filed against this decision.

Phase 7: Decision on the exchange or transfer of ownership rights
After the decision approving the draft becomes legally effective, the land office issues a decision on the exchange or transfer of ownership rights. It is this decision that terminates the existing agricultural lease relationships to the original land parcels as of 1 October of the current year. The decision becomes legally effective on the last day of the 15-day period from its posting.

Phase 8: Registration in the Land Registry
After the decision on the exchange of ownership rights becomes legally effective, the land office forwards the documents to the Land Registry office, which records the new state in the Land Registry. From this moment on, the ownership relationships are legally valid and registered.

At which phase should you act:

• No later than phase 4 or 5 (exhibition of the draft), you should start preparing amendments to your agricultural lease agreements or negotiating the terms of new agreements.

• Before the decision on the exchange of ownership rights is issued (phase 7), the supplementary clauses in the agricultural lease agreements should already be in place, or there should be a clear agreement with the lessor on concluding a new agreement.

• Immediately after the decision on the exchange of ownership rights becomes legally effective, a new agricultural lease agreement should be concluded to avoid a legal vacuum.

The ARROWS law firm monitors land consolidations for its clients and will alert you in time to the need for a legal solution. To ensure the protection of your rights, contact us at consultation@arws.cz.

Security and trust – why handle your lease with the ARROWS law firm

The issue of agricultural lease agreements in the context of land consolidations seems simple at first glance – a landowner and a lessee agree on the use of land. In the real world, however, this area hides a multitude of hidden exceptions, procedural details, links to other regulations, and risks that a layperson often does not see.

For example, the ex lege termination of agricultural lease relationships is not intuitive – most landowners and lessees assume that the agreement remains valid. Court case law on ineffective clauses shows that even seemingly logical provisions may not be legally functional. The deadlines for negotiations and concluding new agreements are tight, and if you miss them, a legal vacuum with serious consequences arises.

The ARROWS law firm deals with this agenda daily, which allows us to significantly shorten our clients' time and minimise the risk of errors. Our portfolio includes more than 150 joint-stock companies, 250 limited liability companies, and 50 municipalities and regions for which we provide long-term legal services. We pride ourselves on speed and high quality, which in the area of agricultural lease agreements and land consolidations means the ability to react promptly to new situations and ensure the smooth continuity of rights.

ARROWS is insured for damages up to CZK 350,000,000, which means maximum security for the client. If an error were to occur in our work, the client is financially protected. For owners of large agricultural enterprises or investors who own extensive agricultural land, this aspect is key.

We also regularly partner with in-house corporate lawyers to resolve special matters, such as land consolidations, international agricultural lease agreements, or complex restructurings of ownership and usage relationships. Thanks to our ARROWS International network, we can solve legal problems with an international element – for example, if the lessor or lessee is based abroad or if foreign investors are involved in Czech agriculture.

If you don't want to risk mistakes, damages, or fines, you can safely leave the entire matter to ARROWS. Just contact us at consultation@arws.cz – our lawyers are ready to help you.

Conclusion

Comprehensive land consolidations bring fundamental changes not only to the landscape but also to the legal relationships between landowners and users of agricultural land. The ex lege termination of agricultural lease relationships is a fact that cannot be ignored or circumvented by mere general clauses. The only reliable protection is a precisely formulated agricultural lease agreement that includes the lessor's commitment to conclude a new agreement for the newly created land parcels, including clear deadlines and conditions.

The vast majority of landowners and lessees are unaware of the legal risks associated with land consolidations. The consequences include loss of continuity of land use, disputes over rent, fines for illegal use of agricultural land, and loss of subsidies. Yet, with foresight and proper legal preparation, all these problems can be avoided.

The ARROWS law firm provides comprehensive legal services in the field of agricultural lease agreements and land consolidations. Our lawyers have experience in handling hundreds of agricultural lease relationships and can ensure that your rights are fully protected. Thanks to our insurance coverage of up to CZK 500 million, you can be assured of maximum security. We also offer the possibility of connecting you with investors or business partners if you are looking for financing or sales opportunities in the agricultural sector.

Do not hesitate to contact us at consultation@arws.cz – we will resolve your situation quickly, professionally, and reliably.