Sample 5-year farm lease

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Below is some language I provided a landowner. It describes a multi-year lease with a 5-year term that is renewable in the 3rd year. The arrangement could read something like:

“We (the landowners) promise the rental of the farm to (farmer’s name) from January 1, 2012 to December 31, 2016 at an annual rental rate of $____ per year payable (monthly/annually by ____ date). By December 31, 20__ we (the landowner) may extend the lease to December 31, 2019. Or we may extend the lease beyond December 31, 2016. If we (the landowners) terminate the lease prior to December 31, 20__ (farmer’s name) has:

1) 90 days to remove their livestock, equipment, or other of their property from the farm.

2) Is entitled to a fair reimbursement to all planted annual row crops currently on the farm.

3) Will be reimbursed for the greater of $____ or sum total of receipts/verifiable records of expenditures on the farm within the 36 months prior to the notification date not to exceed $____ and not including any charge for labor by the farmer tenant or members of his family.

The farmer tenant is not entitled to any reimbursement if the farmer terminates the lease prior to the agreed date.”

The number 3) provision should provide some protection and incentive for the farmer tenant to communicate and provide a record to the landowner as fertilizer/lime/seed/herbicide is applied. That way there will be a record of land improvements in case the lease is terminated early. In the event the tenant does little or nothing to maintain the land and the lease is terminated early the landowners are obligated to a minimal reimbursement to the tenant.

Three additional thoughts:

1) I would state that the entire farm must be mowed or otherwise harvested at least once per year.
2) Fences are maintained by the landowner providing materials and the tenant providing labor.
3) If use of facilities (barns) are included in the lease, there should be some regular inspection of the building(s) where the landowner pays for maintenance (such as windstorm damage, gutter repair, etc etc) but the farmer tenant must pay for damage (tractor hitting a door or support beam etc etc)

Finally, it’s impossible to foresee all circumstances so having regular communication between landowner and tenant (and finding a conscientious and trustworthy tenant!) are critical!!