If you own more farmland than you can actively use, leasing that land to another farmer is a smart way to earn income from the unused land. But, leasing farmland does come with some risks. According to the real estate lawyers of the Law Offices of Bromm Lindahl Freeman-Caddy & Lausterer in Wahoo, NE, to protect your land and your finances, every farm lease should include the following five terms.
Farm Lease Must-Have Terms
1. The Basics
To be a valid contract, real estate lawyers say your farm lease will need to include the basics: the names and addresses of both the landlord and the tenant, a reasonable identification of the property, the lease start and stop dates, the rental fees and their due dates, and the signatures of both parties. Notarization of the signatures is not required but is a good idea.
2. A Description Of How The Tenant Will Use The Land
Every farm lease must contain a section explaining the nature of the tenant’s farming business. This ensures that both parties are on the same page. For example, if a tenant wishes to plant corn on land that was previously used to graze sheep, but the landowner thinks the tenant will continue to use the land as a pasture, problems might ensue. Additionally, all leases should list banned activities (such as dumping waste or chemicals) and any conservation practices that must be followed (such as crop rotation).
3. What Happens In Case Of Emergency
The lease should state what happens if there is a natural disaster like a flash flood or tornado. It should also have contingencies for man-made disasters like chemical spills or a broken fence that lets livestock loose. Your lease should explain who is liable in each of these situations and whether or not the lease will continue after the emergency.
4. Maintenance, Repairs, & Improvements Needed
All farms need constant maintenance and repairs. Some land may need improvements before it can be used as the tenant intends to use it. Your lease should set forth a schedule for these activities and state who will pay for the costs of such repairs or improvements.
5. How To Terminate The Lease
Your farm lease will have a natural end date, but you also need to plan for early terminations. Explain what happens if either party needs to cancel the lease before the scheduled end date and whether or not that person will have to pay damages.
Whether you are starting your farm lease from scratch or considering modifications, the real estate lawyers of the Law Offices of Bromm Lindahl Freeman-Caddy & Lausterer can help you draft a lease that will ensure your farmland is preserved for years to come. Call them today at (402) 443-3225 or visit their website to find out more.