Rushville Republican

Agriculture

November 12, 2012

Expert: Consider legalities when terminating, renegotiating farmland leases

RUSHVILLE — As the end of grain harvest draws near, many landlords and tenants will be renegotiating or terminating farmland lease agreements - a process full of legal requirements, a Purdue Extension agricultural economist warns.

First and foremost, lease agreements and terminations should be in writing. While oral farmland lease agreements are as legal as written leases in Indiana, Gerry Harrison said some details of the oral agreement might be disputed.

“Oral leases should be avoided,” he said. “There are many problems with oral leases, including what is or was the actual agreement.”

Earlier this year, the Indiana Court of Appeals ruled that a lease termination is required to be in writing, which protects both landlord and tenant.

“It could be very risky to rely on an oral notice to terminate a lease,” Harrison said. “Further, if a new leasing arrangement is needed with the existing tenant and a lease agreement does not come, the tenant, without a proper notice to quit, likely has the land for the coming year at the same rent or arrangement as the current year.”

Indiana law also requires that a notice to quit, or terminate, a lease needs to be delivered by a landlord or tenant in a timely manner. For a lease of at least a year, law requires notice to be delivered three months before the end of the lease year.

If a lease doesn’t specify the lease-year end, Harrison said it’s customary in Indiana to consider the end of February of the coming crop year as the lease-year end.

“Farming is a continuous process. If there is to be a new tenant, the current tenant needs to plan for the transition, and the new tenant would likely want to start preparations for the coming crop year during the late summer or the fall of a current crop year,” he said.

For landlords and tenants who are renegotiating lease agreements, Harrison said it’s important for both parties to have an understanding of the farmland’s rental value.

“Landlords must recognize the difference in the rental value of varying farmland parcels as to size in acres and quality of the land,” he said. “While crop farming has been quite profitable in recent years, an oddly shaped 30 acres is not likely to be as desirable to a tenant as a very fertile 300-acre parcel.”

Some lease renegotiations might require professional help to draft an appropriate rental agreement.

Harrison prepared an in-depth look at farmland lease renegotiations and terminations titled “Indiana Farmland Leases - Key Considerations and Laws.” It’s available by emailing him at harrisog@purdue.edu.

More information about farmland leases also is available in Harrison’s free Purdue Extension Publication, “Legal Aspects of Indiana Farmland Leases and Federal Tax Considerations,” which is available for download at http://www.extension.purdue.edu/extmedia/EC/EC-713.pdf

1
Text Only
Agriculture
  • Q and A: Peas Best as Early-Spring Crop Q. This year some of our peas started to die. This would start by the (rusty) post where my husband anchors a pea fence. Then the disease spread to other pea plants in the row. It went from the post and progressed east. The plants west of the post di

    August 22, 2014

  • ASA announces date for Succession Planning Workshop ST. LOUIS -The American Soybean Association (ASA) Succession Planning Workshop in Columbus, Ohio is rescheduled for Jan. 15, 2015.“The information provided in these workshops is very important for soybean producers to hear and understand so they can

    August 22, 2014

  • Purdue assisting with study for regional food hubs WEST LAFAYETTE - Purdue Extension will host meetings throughout Indiana for specialty-crop producers, wholesalers and community leaders to help the Indiana State Department of Agriculture assess the potential for a statewide network of regional food

    August 22, 2014

  • Purdue: Shale oil 'dividend' could pay for smaller carbon footprint WEST LAFAYETTE - Unanticipated economic benefits from the shale oil and gas boom could help offset the costs of substantially reducing the U.S.’s carbon footprint, Purdue agricultural economists say.Wally Tyner and Farzad Taheripour estimate that sha

    August 22, 2014

  • ag-rv081514-extension awards pic Women honored with extension awards for dedication to agriculture WEST LAFAYETTE - Purdue Extension honored two women for their dedication and service to agriculture with the Women in Agriculture Achievement and Leadership awards Wednesday evening (Aug. 13) at the Indiana State Fair.The Achievement Award, which rec

    August 15, 2014 1 Photo

  • Abundant corn, soybean crops expected again in Indiana, nation WEST LAFAYETTE - The federal government expects Indiana and the nation to grow bumper crops of corn and soybeans for the second consecutive year, adding to already adequate supplies but further holding down prices farmers will get for their productiv

    August 15, 2014

  • Pinney Purdue field day Aug. 20 WEST LAFAYETTE - The 2014 Pinney Purdue Field Day on Aug. 20 will enable participants to stay current on agricultural production issues and visit with fellow producers as well as supply and service exhibitors.Pinney Purdue Agriculture Center is at 1

    August 15, 2014

  • Purdue: Cover crops make stover more profitable WEST LAFAYETTE - Farmers using cover crops as a soil conservation method can remove much more corn stover per acre for biofuels or other uses and at the same time potentially increase their income, Purdue University research shows.The research points

    August 8, 2014

  • ASA responds to Russian ban on U.S. food imports WASHINGTON - In response to Russian President Vladimir Putin’s announcement Wednesday of an impending retaliatory ban on a significant number of agricultural imports to Russia, American Soybean Association President Ray Gaesser highlighted soybean fa

    August 8, 2014

  • Programs to analyze crops report, farm bill WEST LAFAYETTE - Farmers attending two Purdue Extension programs at the Indiana State Fair on Tuesday (Aug. 12) will get a good idea of how corn and soybean crops are shaping up for the fall harvest and how the yields could guide financial decisions

    August 8, 2014