Properties smaller than one hectare
Persons other than individual farmers (i.e. any company) wishing to buy an agricultural property with an area of less than one hectare will no longer need a permit from the National Agency for Agriculture Support (the "Agency"). However, other limitations will still apply, including the Agency's pre-emptive right and right to acquire such properties. A farm must still be operated on the property and the property may not be sold for five years without an Agency permit. These obligations were reduced, however, the bans will continue to apply for 10 years following the property acquisition, and any earlier sale has to be permitted by the court. These restrictions were lifted for properties with an area of less than one hectare and located within the administrative borders of towns. No restrictions apply to properties with an area of less than 0.3 hectares and this was not amended.
Shares in companies owning agricultural properties
The Agency's pre-emptive right and right to acquire shares was modified. Such rights will now pertain to shares of a company being an owner or perpetual usufructuary of agricultural properties of at least five hectares (0.3 hectares to date). At the same time, for calculation purposes, the area of such properties includes properties held in perpetual usufruct (previously companies had to be owners only).
The Agency may exercise the pre-emptive right or right to acquire shares for a longer period of two months. When sending a notification about the pre-emptive right, companies are now obliged to provide the Agency with a balance sheet, income statement, up-to-date list of shareholders and the management board's representation on contingent liabilities. The Agency may still audit the company's documents if its shares are transferred.
Also, if a partner in a partnership is changed, the Agency's right to buy that partnership's agricultural property was limited to properties of at least five hectares. This also applies to partnerships being owners or perpetual usufructuaries of agricultural properties.
The amended regulations implement a new limitation on joint-stock companies wishing to make a stock exchange debut and owning perpetual usufructuaries of agricultural properties with an area of at least five hectares. These companies will be required to notify the Agency about the general meeting resolution on seeking admission of their shares covered by a prospectus to trade on the regulated market, and the Agency will become entitled to acquire such a company's properties for consideration. No such limitations pertain to trade in shares of listed companies and this was not changed.
The amendments make it clear that for the acquisition of agricultural properties as a result of a split, transformation or merger, no Agency permit is needed, but the Agency may still acquire these properties.
For the acquisition of agricultural properties within bankruptcy or enforcement proceedings, an Agency permit is no longer required, but the Agency may still acquire these properties.
The new aspects are the Agency's duty to launch and maintain an IT system for posting announcements on the intended sale of agricultural properties and the sellers' duty to demonstrate that no eligible entity was interested. This is one of reasons for the Agency to permit a person other than an individual farmer to acquire a property.
The amended regulations will undoubtedly facilitate commercial trade in small agricultural properties and the shares of companies that own them. However, the current limitations must be complied with or else the transaction may be declared null and void.