MAY 30, 2016 Updated NOVEMBER 1, 2020
A provincial grazing lease is a common interest in land with specific rules for transfer/assignment. Often Crown lands are declared to be available to the public and leases are granted. Once issued, however, they become very valuable assets and can be willed to heirs on death. When sold or assigned they can be worth tens of thousands of dollars. There is a standard form of assignment of grazing lease approved by the Minister for both individuals and corporations. The approval time of a grazing lease assignment can take upwards of 12-24 months. Normally the real estate practitioner will seek to separate any transfer closing dates on fee simple lands from the grazing lease assignment, thereby allowing some of the funds to flow to the seller, while the grazing lease consideration continues to be held in trust until the process is concluded. The purchase of the grazing lease can also be financed/used as collateral for refinancing.
The forms for the assignment documents can be found here:
Currently, the following Department is your contact point for assignment purposes:
Agriculture Maintenance Unit, Land Policy and Programs Branch, Public Lands Disposition Management Section
Alberta Environment and Parks.
A couple of practise points to be wary of:
- The responsibility for the payment of the assignment fee to the Alberta Government of $3,150 should be contemplated in the AREA Agricultural Purchase Contract standard form and schedule.
- Copies of the grazing lease, denoted by the “GRL” prefix, can be obtained from the department noted above of the Government of Alberta for no fee.
- The Assignor must have held at least 2/3 of the leased lands for three years to be able to transfer/assign the same to an arm’s length third party (Public Lands Administration Regulation, Alta Reg 187/2011 s.156.).
- Surface Leases from oil companies may also be payable on a grazing lease. This lease revenue, payable in advance, should also be assigned and adjusted to the Buyer.
For more information on Alberta Grazing Leases, please contact us.
This article is intended to give general information only. We recommend you contact a lawyer for specific legal advice.