Components of a Lease
Having a good
landlord-tenant relationship is a must when it comes time to negotiate the
lease. Therefore, as a tenant, I suggest talking to your landlord throughout
the year and letting them know what you have been up to on their property. Specifically,
letting them know what the yields were like and the results of any soil test.
A good landlord-tenant
relationship makes it easier to talk about the fine points within a farmland
lease. Many tend to group the items in a farmland lease into five areas:
General Terms, Land Use & Cropping Program, Landlord’s Rights, Tenant’s
Rights, and Enforcement of Agreements & Arbitration. The General Terms
section states the length of the lease, rental amounts/share & contribution
totals, how the rent will be paid, and how termination of the lease notice
needs to be given. It is also good to declare in this section that this is an
agreement, not a partnership.
Under the Land Use &
Cropping Program section, you should find information about the acres involved,
any limitation on what crops can be produced, and government program
provisions. It should also declare who has hunting rights and who can give
those hunting rights to others (i.e. if the tenant has the rights, can they let
their nephew or son hunt there).
In the Landlord’s Rights
section, there should be information on the landlord’s involvement in
management decisions, who is in charge of replacing and repairing buildings,
and who is to pay the taxes. Sometimes you will see information on whether or
not the landlord pays for the lime applied to the field.
Under the Tenant’s Right
section, you will often find information on their responsibility to maintain
the appearance of the farm (i.e. what if the fence gets destroyed) and
storage/use of pesticide and other chemicals. Additionally, you will find
information on subleasing possibilities, who is responsible for controlling
soil erosion, and if the tenant can use cover crops on the property.
The Enforcement of
Agreements & Arbitration section deals with the liability of damages to the
other party and legal issues about who is to handle the crop if a tragedy
strikes (i.e. can the lease be inherited or is it terminated). There should
also be information on how to handle amendments to the lease and how to resolve
disputes. If the tenant is responsible for the lime cost, then an agreement
needs to be determined and wrote in this part of the lease on how to handle
residual lime payments if the lease is terminated before all the benefits of
the lime application is realized.
As always, if
you have any questions or would like information on any agriculture,
horticulture, or natural resource topic, then please contact your local Purdue
Extension Office at 448-9041 in Clay Co. or 829-5020 in Owen Co. or reach me
directly at firstname.lastname@example.org.
Purdue University is an equal opportunity/equal access/affirmative action
opportunities available to you through Purdue Extension include:
December 31 – Clay Co. Extension Office Closed
January 1—County Holiday, Extension Office Closed
January 5—State 4-H Poultry Workshop, 10 AM—1:30 PM, Boone Co. 4-H Fairgrounds