There are many doors left open in lease agreements. To help protect yourself, make sure your lease is solid and strong by following these tips from Jim Farrell of Farmers National Company.
- Only use a written lease - an oral lease isn't a strong enough foundation in the days of volatile markets.
- Be sure the names and addresses of all parties are on the lease.
- Have an accurate and complete legal description of the property.
- Use a yearly lease, rather than a multi-year lease - which often favors the farm owner, not operator.
- Clearly outline the amount and payment terms of the rent, along with remedies if delinquent conditions arise.
- Identify who is responsible for what costs - make no assumptions.
- Include a statement that prevents lease assignment or subleasing.
- Assure timely fieldwork and protection of the soil and water. Also stipulate that fall fieldwork, seeding and fertilizer isn't to be completed without consent of the owner.
- Reserve hunting rights and income.
Other provisions to consider include: prohibition of burning or harvesting straw or stalks without owner permission, insurance requirements, compliance with USDA farm programs, security interest in the growing crop and requirement of actual yield results and yearly soil testing.
It's also a good idea to consult a professional when drafting a lease, to ensure you're getting the best quality possible and that all doors are closed and solid.