Leasing agricultural real property as one of the forms of managing the property of the Agricultural Property Stock of the State Treasury

Abstract

A lease agreement with a purchase option, referred to as ‘agricultural leasing’ in legal scholars’ writings, is regulated under Article 38a of the Act on the Management of Agricultural Real Properties of the State Treasury (hereinafter referred to as ugnrSP). Although the said provision has been in force since 19 January 1994, it is not used in practice. So far, no ownership has been transferred under this procedure, which is indeed perplexing. Under the said provision, property of the Agricultural Property Stock of the State Treasury may be leased to natural or legal persons, with the tenant having the right to purchase the leased property no later than at the end of the lease term. Lease with a purchase option may prove beneficial for both the National Centre for Agricultural Support (hereinafter referred to as KOWR) and for the lessee. The agreement carries a lending functionality as it is a form of a loan granted by KOWR to the tenants. On the other hand, in this form KOWR may transfer property that requires large financial expenditure, thereby making its presence in the Stock economically unprofitable, which cannot be sold on the basis of a contract of sale. The purpose of the article is to examine whether, in view of the changes introduced in recent years as regards the sale of agricultural real properties from the Agricultural Property Stock of the State Treasury, it is possible to enter into lease agreements with a purchase option, what real properties may be sold under this agreement, who may be a party to it, as well as to establish why Article 38a is not applied in practice.