25
Jan
Government of Alberta Grazing Leases
The Government of Alberta, through the Lands Operations Division of Public Lands Disposition Management, Forestry and Parks, grants grazing dispositions of public land to qualified holders who can include individuals and corporations. A grazing disposition (lease, licence, or permit) provides an interest in certain lands with specific obligations to manage livestock, keep certain acceptable improvements such as fencing maintained, a rental rate to the Province, and have a specific process for transfer/assignment on sale or on the death of a holder. Once issued to a holder, these interests 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. Recent updates to the form of assignment of these dispositions can be found at www.alberta.ca (search for Application for Assignment of Agriculture Dispositions). The approval time of a grazing disposition assignment has recently improved to only a few months. Normally the real estate practitioner involved in such a sale or estate transaction will seek to separate any transfer closing dates on fee simple lands from the grazing assignment, thereby allowing some of the funds to flow to the seller on closing, while the grazing lease consideration continues to be held in trust until the assignment is registered. The purchase of a grazing lease can also be used as collateral for refinancing.
A couple of practise points to be wary of:
1. The responsibility for the payment of the assignment fee to the Alberta Government of $3,150 (as of 2020) should be contemplated in the AREA Agricultural Purchase Contract standard form and schedule.
2. Copies of the grazing lease, denoted by the “GRL” prefix, Grazing Licence (“FGL”), Grazing Permit (“GRP”) Farm Development Lease (FDL) or Associated License of Occupation (DLO) can be obtained from the department noted above.
3. The Assignor must have held the lease for a minimum of three years related to at least 2/3 of the land proposed to be assigned to an arm’s length third party (Public Lands Administration Regulation, Alta Reg 187/2011 s.156.).
4. 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.
4. For more information on Alberta Grazing Dispositions, please contact us.
Author: Mae Chow
This article is intended to give general information only. We recommend you contact a lawyer for specific legal advice.
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