It doesn’t make sense to pay to use a piece of land, invest time and effort into raising a crop, and not even have a paper outlining an agreement with the owner.
Yet it’s something lawyer James Steele, of Robertson Stromberg LLP, says he sees repeatedly, as well as handshake agreements and handwritten rental deals. Across the country, none of these informal agreements are sufficient if there's a disagreement and the rental matter ends in court. Overall, having a written land rental agreement in place is a critical, yet often neglected, piece of farm business that could save both parties time and money if anything with the rental ever went wrong.
Include all the details
A rental agreement needs to be longer than a one—to two-page document and include as many details as possible. Steele says he often sees producers show up with an agreement where the term and rate have been determined, but not much else.
A rental agreement document must spell out the obligations and consequences, and what happens if conditions aren’t met. For example, who is responsible for repairing and paying for the fence or who pays the property tax?
If this basis is not covered, both the landlord and the tenant will be left confused about their rights and obligations.
Agreements may also include details like only growing specific crops or the need to be organically certified.
While it’s OK for the landlord to have housekeeping items like removing weeds in the agreement, ensure the tasks aren’t too difficult for you as a renter, such as perfect weed maintenance throughout the entire property.
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