How to cover all the bases with a land rental agreement

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 piece of paper that outlines an agreement with the owner.

Yet it’s something James Steele and Travis Kusch, lawyers at Robertson Stromberg LLP, say they see 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 up 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.

The foundations of a rental agreement

A rental agreement needs to include the following (view details here):

1. Rent
2. Term
3. Protection of the soil

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. Kusch and Steele say they often see 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... Read More