Reminder: New leases need to be signed before March 1, 2014.
Is your farm lease thorough? Think about what your lease would look like for a rental house. Compare that to your farm lease. If you have a verbal lease (handshake agreement), your lease is likely very minimal and may only specify the amount of money to lease a specific farm. Even written leases often lack important information. Landowners have more ability than they may realize to protect their land through detailed farm leases.
Written leases are encouraged because they reduce the likelihood of a disagreement or misunderstanding regarding the lease terms. By writing out the terms of the lease, decisions are made before potential problems might arise. A written lease would also protect the tenant should the landowner sell the property during the lease term. Leases that cover more than one crop year are required to be in writing.
Written leases, at a minimum, should include the following information for cash leases (See ISU Extension publication FM 1564 (AgDM file C2-01) Improving Your Farm Lease:
- Names (and possibly addresses) of all parties
- Accurate description of the property
- Definite period for the lease to run (beginning and ending dates)
- Kind and amount of rent, and time and method of payment
- Signatures of all parties
Ideally, written leases would be even more detailed than this minimum to cover topics like management, maintenance, and conservation. Some basic components of leases can be found from the Center for Absentee Landowners website, http://www.absenteelandowners.org, or the Sustainable Farm Lease website, http://sustainablefarmlease.org/.
Some suggested additional components might include:
- Termination and renewals
- Date by which notice of termination would be required. In Iowa, a lease termination notice must be properly served by September 1. However, an earlier date may be stated in the lease. A lease would be automatically renewed if it were not properly terminated in time.
- Landowner rights
- Right to enter the property
- Type of relationship formed by the lease, usually landlord-tenant
- Land Use
- Allowed and prohibited uses
- Specific crops to be allowed/prohibited
- Landowners right for entering property
- Buildings, machinery, and non-cropland
- Recreational uses
- Hunting/fishing rights
- Operation and management
- Expected contributions of the landowner and tenant for the cost of operation and management
- Repairs and maintenance to:
- Conservation practices
- Weed Control
- Repairs and maintenance to:
- Contributions of both parties
- Tenant reimbursement for undepreciated value
- Who does/pays for repairs
- Required conservation practices
- Conservation problems to address
- Conservation improvements (terraces, sediment basins, etc.)
- Nutrient management
- Residue management
If you are interested in discussing how to improve your lease agreement, specifically through including conservation/land use provisions, please contact us. Through our Conservation Lease Project, we can help write an addendum to a farm lease that includes many of these provisions and identifies on a map where specific practices are expected. Contact Sara at 563-568-2246 ext. 3, [email protected], or stop by the office to discuss your options.