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 smith535@purdue.edu. Purdue University is an equal opportunity/equal access/affirmative action institution.

Upcoming 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