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Farmland Rental In Indiana Workshop
Setting the rental amount is one of the components of leasing farmland that can be stressful. You can avoid some of the stress by putting your farmland lease in writing.
By taking the time to write down the lease, you are able to get your thoughts down on paper so that you can make a clearer decision. Additionally, it gives you a record to go back to if a disagreement arises.
It also serves as legal proof of your agreement and provides a way for your asset to be handled in the event that a tragedy would strike and your heirs are left with crops growing in the field. It is best when the lease is being written for the landlord, tenant and a notary or witness to be present.
Having a good landlord-tenant relationship is necessary when it comes time to negotiate a farmland lease. Therefore, as a tenant, I suggest talking to your landlord throughout the year and letting them know what you have been up to on their property. Specifically, letting them know what the yields were like and the results of any soil test.
A good landlord-tenant relationship makes it easier to talk about the fine points within a farmland lease. Many tend to group the items in a farmland lease into five areas: General terms, land use and cropping program, landlord’s rights, tenant’s rights and enforcement of agreements and arbitration.
The general terms section states the length of the lease, rental amounts/share and contribution totals, how the rent will be paid and how termination of the lease notice needs to be given. It is also good to declare in this section that this is an agreement, not a partnership.
Under the land use and cropping program section, you should find information about the acres involved, any limitation on what crops can be produced and government program provisions.
In the landlord’s rights section, there should be information on the landlord’s involvement in management decisions, who is in charge of replacing and repairing buildings, and who is to pay the taxes.
Under the tenant’s rights section, you will often find information on their responsibility to maintain the appearance of the farm (i.e. What if the fence gets destroyed?) and storage/use of pesticide and other chemicals.
The enforcement of agreements and arbitration section deals with the liability of damages to the other party and legal issues about who is to handle the crop if a tragedy strikes (i.e. Can the lease be inherited or is it terminated?). There should also be information on how to handle amendments to the lease and how to resolve disputes. If the tenant is responsible for the lime cost, then an agreement needs to be determined and written in this part of the lease on how to handle residual lime payments if the lease is terminated before all the benefits of the lime application is realized.
For more information about land leases, consider signing up for the Farmland Rental in Indiana Workshop. This program is scheduled for Nov. 4 from 6:30-8:30 p.m. at the Purdue Extension – Putnam County Office (physical address of 152 E. Columbia St., Greencastle). We ask that participants please register by Oct. 31 at: https://tinyurl.com/FarmLand24. During this program, participants will learn about farmland property taxes and farmland leasing. This program is great for landlords to attend to learn more about the farmland leasing process.
Visit www.extension.purdue.edu/putnam or ontact the local Purdue Extension Office at 653-8411 for more information regarding this week’s column topic or to RSVP for upcoming events. It is always best to call first to assure items are ready when you arrive and to RSVP for programs. While many publications are free, some do have a fee.
Upcoming Events:
Oct. 14 – Extension Office closed for Columbus Day
Nov. 3 – Putnam 4-H Awards Program
Nov. 4 – Farmland Rental in Indiana, 6:30-8:30 p.m., Extension Office. Register at https://tinyurl.com/FarmLand24
Nov. 5 – Curb Your Urge to Splurge-Holiday Edition