Here is a great excerpt from an article in last month’s issue of Successful Farming:
5 Farmland Leasing Misconceptions
By Jeff Caldwell, News Editor
Whether you’re renting out your farmland or you’re leasing the land to farm yourself, today’s lower grain markets put a premium on reaching a fair agreement in which both sides of the deal will be able to make it work. Regardless of the agreement (cash rent, flexible rent, crop share), there are a few misconceptions that can sometimes damage what would otherwise be an amicable, fair deal.
The most important thing, one specialist says, is to get everything in writing. That may seem to be a foregone conclusion, but a lot of land deals are confirmed with a handshake, says University of Nebraska Extension ag law specialist David Aiken. So, get the deal down on paper and, in doing so, “spell out the rights and responsibilities before issues arise,” he says in a university report.
Here are five misconceptions that Aiken says are common in land lease agreements. Look out for these – whether you’re the lessee or the lessor.
1. Landlords can tell their tenants how to farm the land.
“During the period of the lease, the tenant is in charge of how things are done on the farm, not the landlord. From a legal perspective, the tenant calls the shots unless the parties both agree otherwise,” Aiken says.
2. Landlords can trespass if they own the land.
If you own the land but are leasing it out, you can be prosecuted for trespassing if you venture out on that ground without the lessor’s permission. This is one area where a written lease can be a huge asset.
3. Any lease is terminated when land is sold.
It’s commonly thought that if a parcel of land is sold to a new owner, any previously held leases are ended. “If the landlord sells rented land, the new buyer is subject to any existing lease. If the lease has not been legally terminated, the new buyer may be stuck with the tenant for one to two more years,” Aiken says.
4. Landlords can raise rent at any time.
The new crop year for Aiken’s state of Nebraska is March 1. The state’s lease establishment deadline is September 1. After that date, the landlord cannot change rent “without the tenant’s agreement,” he says.
5. Landlords can hunt on their leased land.
If you own it, don’t assume you can automatically go onto your land to hunt. “Landlords can’t hunt on rented land unless the tenant agrees to it,” Aiken says.
“While the savvy tenant often will accommodate the landlord’s interests in order to keep the lease, working from a written lease, working from a written lease will benefit both parties,” he says.