Land Lease Agreements

[polo1665]

Currently about 4 of the 33 acres we own are leased out to a local farmer. He pays us $50 per acre, per year, for the lease. This lease was in place with the prior owner, and when we bought the place I verbally told the farmer that we would continue for now with the arrangement that they had prior to our buying the property.
I am thinking that I should put this agreement in writing for both of our protection and was wondering if any of you guys/gals have such an agreement and how you worded it.
If I have to get a lawyer to write this up I will, but It would seem like it should be simple enough that I could word it properly. Anybody got a form letter I could copy

Mark

 

[JJT]

If it were me I'd leave things as is. If you are worried about liability, don't renew. $200/yr isn't worth losing sleep over, and is certainly isn't worth getting a lawyer involved.

 

[Western]

If it were me I'd leave things as is. If you are worried about liability, don't renew. $200/yr isn't worth losing sleep over, and is certainly isn't worth getting a lawyer involved.

X's 2

 

[blueriver]

X's 2

X's 3 !!!

 

[MikeD74T]

The only reason I'd want a written agreement would be to allow termination if a reason to do so arose. Tying yourself & property up for a year for only $200 doesn't seem completely logical, although I don't think you should necessarily raise the price. I'd also have to consider, as would any court, what the farmer has invested in the property, i.e. crop value, should you want to terminate. For example a court may tell you that you must pay back the $200 plus the harvest value or replacement value of any crops now growing that the farmer depends on to continue his livelyhood as a penalty for early termination. MikeD74T

 

[polo1665]

If it were me I'd leave things as is. If you are worried about liability, don't renew. $200/yr isn't worth losing sleep over, and is certainly isn't worth getting a lawyer involved.

Not worried about liability, not losing sleep, and do not want to get a lawyer involved. Leaving things as is, will probably be what will happen. I have no issue with the farmer and only wish to make sure that no issues arise. If there is nothing in writing then it goes to follow that there is nothing to renew.

The only reason I'd want a written agreement would be to allow termination if a reason to do so arose. Tying yourself & property up for a year for only $200 doesn't seem completely logical, although I don't think you should necessarily raise the price. I'd also have to consider, as would any court, what the farmer has invested in the property, i.e. crop value, should you want to terminate. For example a court may tell you that you must pay back the $200 plus the harvest value or replacement value of any crops now growing that the farmer depends on to continue his livelyhood as a penalty for early termination. MikeD74T

As it is (without a written agreement), termination would be strictly his loss. I know that $200 does not seem like a lot, but that is $200 in my pocket, no cost for me to maintain the land, and the land is put to good use. The farmer makes out pretty well in the bargain as well.

I guess I am just a little apprehensive about someone using my land without some sort of written permission involved. Maybe I'm just being paranoid. I appreciate the input form the group.

Mark

 

[bigtiller]

I cash rent my place on a verbal contract. Done it for 13 years on only 31 acres and nobody has any complaints. I figure farmers today have enough paper work to keep the government, banks and lawers happy. If I had 640 acres that might be different. But I guess it all depends on how much respect each party has for the other with our small plots of ground.

 

[mikeyee]

For most lease cases, the main problem arises when you try to terminate their right to modify/work/be on the land. A clause in a agreement saying you have authority without consent is normally a good clause stating you had a reason. This reason can be:
1. negligence due to improper land use that was agreed upon.
2. not paying lease
3. reasons where you suffered a financial loss from their actions

Also its also important to add a "no mechanical lien" clause where if someone that leased the land could file that they improved the land and could hold the land hostile for not being paid for improving the land. Many subcontractors/contractors do this to owners of land in order to insure payment. For leasing, its pretty common to add this important clause to avoid protection from this mechanical lien (state that the lease identity waives his rights to this claim. And for added security if its a big deal; get it notarized (its like 5$)

I learned all this from a litigations/engineering class on court cases. Hope that helped!

 

[2manyrocks]

Whether or not you want to see a lawyer, you might consider checking your insurance policy and maybe having a discussion with your agent whether you have enough coverage. What I worry about most is some stupid accident and then there is a lawsuit. Seems like our farm policy has some coverages in it that you don't have in a normal residential insurance policy.

There are some issues with terminating a land lease in the middle of a growing season. Even if it has been verbal, if it has always been a year to year land lease, it's probably a year to year lease when it comes down to it.

The fact that you asked the question suggests to me that you want to look at this carefully and then decide what you need to do in your own situation.

 

[riptides]

Ditto what 2manyrocks said. Not only your insurance policy should be checked, but also the other party should carry insurance for working someone elses land.

We have something written that spells this out for both parties, the lease term, the basic work to be performed, and the dollar amount. It is a basic contract, simple stuff, really, but we both have interests and business is business.