Sample Lease Agreement for Farm Land

The owner usually provides land and buildings and pays half the cost of inputs such as fertilizers, seeds and pesticides if the harvest is shared 50-50. Owners are also usually responsible for drying, storing and marketing their share of the harvest. The tenant usually provides all the work, fuel, equipment and the other half of the joint expenses. However, there are many variations in the distribution of expenses. Publications FM 1811 (AgDM C2-15), Survey of Iowa Farm Leasing Practices and AgDM C2-30, Crop Share Leasing Commission, provide further details on the allocation of expenses under a crop sharing lease. AgDM C2-30 decision tool, Crop Share Lease Analysis, calculates input contributions from landlord and tenant to determine how profits can be shared equitably. Cost sharing One issue that often arises is the owner`s responsibility to share the costs of herbicides for weed control, which can partially or completely replace cultivation or other tillage methods. Most landlords agree to provide half the cost of these materials under a crop-sharing lease. Some believe that when no-till or minimum tillage practices are used, they should not pay the full 50% of the herbicide`s costs.

See FM 1811 (AgDM C2-15), Survey of Iowa Farm Leasing Practices for more information. Voice Media – Part 2 – Legal Issues, Written Leases, Lease Termination, Maintenance, Stress Management Form UCC1 must be submitted to the Iowa Secretary of State`s Office within 20 days of the lease going into effect in order to perfect the landlord`s lien. The advantages of a tailor-made farming contract are as follows: Regardless of the duration of your lease, do not lose sight of the fact that leases are legally binding documents designed to ensure correct payment and manage risk. To do this, include a statement about liability and insurance requirements for both parties. A strong farmland lease should also include language that takes into account the following: An agricultural lease agreement is a document that describes the expectations and obligations of a landlord and tenant when renting a farm. An agricultural lease is similar to a standard residential lease; However, an agricultural lease goes even further by also including information specifically for agriculture to ensure that the farm remains productive and well maintained for the duration of the lease. There are many variations in the distribution of costs for the individual application of fertilizers and pesticides. Therefore, it is advisable to discuss these points in advance and indicate in the lease whether the landlord is involved in these costs or not. Custom farming contract As part of a tailor-made farming contract, the operator provides all the manpower and equipment needed for tillage, planting, pest control, harvesting and transporting the crop for storage. The landowner pays all other expenses and receives the entire harvest and all payments from the USDA. The customs operator shall receive from the owner a fixed payment per hectare or a fixed payment for each transaction carried out. As the saying goes, handshake chords work until they stop doing so.

The free ground lease templates you find online have problems and loopholes, but a document that may not be fully balanced for both parties is probably better than nothing at all. Maintain fertility Farm owners often worry about whether a tenant is maintaining or improving fertility levels on the farm. Regular soil tests can determine if additional nutrients are needed. While tenants should be discouraged from “degrading the soil,” applying additional fertilizers (especially phosphorus and potassium) when levels are already high or very high not only wastes money, but also contributes to nutrient runoff and pollution downstream. Harvesting How are the costs of combining, drying, transporting and storing crops shared under a shared-share lease? If the corn drying equipment is part of the rental unit, the landlord often provides the dryer and storage facilities. If the corn drying unit is portable, it may be jointly owned, or either party may own it and charge the other party a specified amount for its use. Fuel and electricity costs for drying are usually divided in the same proportion as harvesting. In some cases, the tenant is paid extra to deliver the owner`s share of the farm warehouse crop to a lift or processor.

Having a written lease Written leases make rental terms more final and leave less risk of disagreement and misunderstanding. People tend to selectively remember only those parts of conversations that reinforce their point of view. It protects not only the original parts, but also the assignees and heirs in the event of the death of one of the parties or the sale of the farm. Many farm families cannot afford to buy farmland because they do not have enough capital for a down payment, or the income will not be sufficient to meet the financing payments. Young families often have jobs, some working capital, machinery and management skills that they want to use on a farm to earn income for living expenses and future investments or deleveraging. If they are unable to buy land, they can lease land and accumulate equity for a possible future purchase. A common method is to exploit a combination of clean and leased land. This allows the operator to have a tether base with machinery and grain storage while renting additional acres.

The other side of the coin is risk management: if you have a problem with your million-dollar assets, it could turn out to be a million-dollar problem. For this reason, you need to make sure that your lease has been reviewed by a lawyer who is familiar with co-land leases. The termination must set the termination of the tenancy on the following March 1st. If the notice of termination is not served, the lease will last one harvest year under the same conditions and conditions. However, if a lease is acceptable to both parties involved, it can be terminated or amended at any time. The Environmental Protection Agency regulates the disclosure of lead-based color warnings at all locations in the United States. However, by way of derogation, the disclosures and rental requirements are based on the laws of the state and sometimes the county in which you live. Some agreements pay the customs operator a premium for the achievement of certain planting dates or yield targets. Others provide that the operator receives a percentage of the harvest instead of a cash payment, usually 20-25%. This is sometimes referred to as a “net share lease.” If the customs operator assumes responsibility for the purchase and delivery of the crops, the cash payment or the share of the harvest is usually higher. More details are published in FM 1823 (AgDM A3-15), Custom Farming: an Alternative to Leasing.

But should you use them? Certainly not without first reading the model with a critical eye and thinking about how each line applies to your property. Regardless of the source of your farmland lease, you should have a written contract that will be reviewed and reviewed by an expert. If you`ve ever thought about renting out your farmland, you`re probably familiar with the free farmland rental templates available on university agricultural extension websites. These PDF forms are easy to fill out, they seem to cover most of the areas you want to discuss, and they have the official look you want in a contract. Utilities and ServicesThis provision requires the tenant to pay for all utilities or services related to its operation. This includes expenses related to growing plants to restore the land as it was at the beginning of the lease. Although utilities are usually included, you should have detailed discussions about water rights and use. Free farmland leases, often available on the university`s agricultural expansion websites, are a great place to start. They`re easy to fill out, they seem to cover most of the areas you want to discuss, and they have the official look you want in a contract. However, you need to evaluate them critically, based on how each line applies to your property. It may be beneficial for both parties to add elements to the lease that meet the needs and prospects of the landowner as well as those of the farmer. .