More Than a Handshake: Some Thoughts on Farm Leases

Rincker Law Farm Life, Food & Ag Law, Landlord-Tenant Law, Property Law Leave a Comment

I make no secret on this blog that I believe farmers and ranchers should make sure to get contracts in writing, including farm or ranch leases.  I want to stress that this is just as important for a family farm where the Landlord and Tenant may be family members.  Even if the Landlord and Tenant are different entities (with the same owners) then there should be a lease to help avoid an argument that one company is simply the alter ego of the other company.

A farm lease does not need to be overly complicated but should address the following issues:  (1) description of the farm/property (including/excluding buildings and structures), (2) term of the lease (e.g., 5 years, 20 years), (3) purpose of the lease (e.g., crop production), (4) payment terms (including property taxes and utilities), (5) insurance, (6) duties and prohibitions of each party, (7) decision-making, (8) repairs and maintenance of the property, (9) wind/solar/hunting rights, (10) participation in government programs, (11) destruction of the farm/property, (12) ability to assign or sublease, (13) indemnification, (14) confidentiality (if applicable), (15) Choice of Law, (16) Alternative Dispute Resolution (e.g., arbitration and/or mediation) or Choice of Forum, (17) whether there is a partnership between the Landlord and Tenant, (18) and any other issue that may be applicable to the transaction.

I recommend speaking to an attorney licensed in your jurisdiction and memorializing the farm lease.  The terms of a lease are too important to be negotiated with a handshake.

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