What is in this article?:
- Farm Lease Types and Options for Renegotiation or Termination
- Written Leases
With rising crop prices, many landlords are trying to renegotiate the terms of their land leases, particularly cash rents. Most Nebraska leases are unwritten, which means that notice of termination must be given six months in advance, usually by Sept. 1. If the landlord cannot terminate the lease, the landlord cannot require the tenant to renegotiate the lease in order to avoid lease termination. However, smart tenants will want to think of the longer-term implications and renegotiate the lease. Tenants who refuse to renegotiate could lose the lease after the current crop year.
Many farm leases, especially those between family members, are not written but are verbal, handshake agreements. Because nothing is in writing, the parties may have different recollections of their agreement, making lease disputes more difficult to resolve. The most common legal issue associated with verbal farm leases is how a lease may legally be terminated.
- For unwritten leases, six months advance notice must be given to legally terminate the lease.
- For written leases, the terms of termination are outlined in the lease. If nothing is specified, a written lease terminates automatically on the last day of the lease. There is no automatic renewal.
Oral (i.e., unwritten) leases are legally presumed to be year-to-year leases. A year-to-year lease has no fixed duration and is automatically renewed for another year until proper notice has been given to the tenant by the landowner (or vice versa) that the lease is terminated.
Terminating oral year-to-year leases. The Nebraska Supreme Court has ruled that the lease year begins on March 1 for oral year-to-year leases (Moudry v. Parkos, 217 Neb. 521 ). Notice to a tenant to vacate under an oral year to year lease (legally referred to as a "notice to quit") must be given six months in advance of the end of the lease, or no later than the preceding Sept. 1.
For example, for the lease year beginning March 1, 2011 and ending Feb. 28, 2012, notice from the landlord that the lease will be terminated would have to be given to (and received by) the tenant no later than Sept. 1, 2011. The lease would then expire Feb. 28, 2012 with the new tenant (or new buyer) able to take over the lease March 1, 2012. If, however, the notice to quit were given (or received) after Sept. 1, 2011, the existing tenant would have the lease until Feb. 28, 2013.