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Friday, May 6, 2016

More on farmland leases

Thursday, December 1, 2011

It is always best to have a good landlord-tenant relationship when it comes time to negotiate the lease.

Therefore, as a tenant, I suggest talking to your landlord throughout the year and let them know what you have been up to on their property. Let them know what the yields were like, the results of any soil test and it wouldn't hurt to give them cookies or some holiday treat just to let them know you appreciate them leaving their property as farmland.

By developing a good landlord-tenant relationship, it 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 and Cropping Program, Landlord's Rights, Tenant's Rights, and Enforcement of Agreement and Arbitration.

The General Terms section states the length of the lease, rental amounts/share and contribution totals, how 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 and Cropping Program, 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 if the landlord is to pay for the lime applied to the field or if the tenant is.

Under the Tenant's Rights section, you will often find information on what machinery/labor the tenant is responsible for, their responsibility to maintain the appearance of the farm (i.e., what if the fence gets destroyed?), 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 and 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 between the landlord and tenant. If the tenant is responsible for the lime cost, then an agreement needs to be determined and written 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 are realized.

Writing a farmland lease can be complicated. Next week's article will discuss some of the resources that you can use when determining how you want to configure your next farmland lease.

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 County or 812-829-5020 in Owen County, 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:

* Dec. 6 -- Controlling Cover Crops PARP Credit Workshop, Vigo County Fairgrounds, 7:30-11 a.m. Call 812-268-5157 Ext. 3 to RSVP due to limited seating,

* Dec. 7 -- Goat and Sheep Webinar, Owen County Extension Office,

* Dec. 8 -- Crop Production Clinic, 4-H Fairgrounds in Alexandria, 9 a.m.-2 p.m. Those attending can receive CCH, CEU and PARP credits for the event, which will be determine the cost. Call 765-641-9514 to register,

* Dec. 10 -- State Forestry, Crops and Entomology Judging CDE, and

* Dec. 12 -- Last Chance PARP, Clay County 4-H Exhibit Hall. Cost is $10 for PARP credit. Call 448-9041 for further information.