A strong farm lease isn’t just a formality, it’s the foundation of a flourishing farming partnership. Whether you’re an experienced operator or a first-time farmer, a well-crafted lease prevents confusion and helps both parties stay on track. Here’s how to create a crystal-clear, ironclad lease that protects your interests.

  • Put it in writing – Handshakes are great for a gentlemen’s agreement. But nowadays even gentleman farmers need to get it in writing. A verbal agreement is a recipe for misunderstandings. A written lease keeps both parties aligned, offering clear terms and expectations. By documenting everything, you eliminate the possibility of differing recollections. A written contract is legally binding, reducing the risk of disputes and ensuring the lease terms are clear and enforceable.

Be sure both parties keep copies of the lease and if any changes occur, update it in writing and get both signatures. A signed document protects the relationship and sets the stage for a smooth, long-term partnership.

  • Legal names & land layout – Clarity starts with the names. Use the full legal names of both parties, whether individuals, LLCs or corporations. A lease with incorrect or informal names can lead to confusion if legal issues arise. Be as specific as you can be from the start.

Next, describe the land in detail. Don’t rely on vague terms like “a field on State Highway 10.” Be as precise as possible. Parcel IDs, GPS coordinates and detailed addresses are all excellent ways to spell out just what land you’re talking about. This way there’s no ambiguity about what land is being leased, reducing the potential for disputes.

Keep in mind, if you’re leasing part of a larger tract, specify the exact portion being rented. This ensures everyone knows which land is covered by the agreement.

  • Dates & duration defined – Lock down the lease’s start and end dates. Define how long the lease lasts, whether it auto-renews (sometimes called an “evergreen contract”) or needs renewal each year. If the lease automatically renews, specify the required notice period to terminate, which is typically 30 to 60 days. Keep in mind that state laws may dictate when non-renewal notices must be given, so make sure the lease aligns with local regulations.

For multi-year leases, consider including terms for adjusting rent based on market conditions, inflation or land improvements. Farmers know just how vulnerable they can be to outside forces and this helps ensure both parties can plan for future changes without surprises.

  • Rent rules & payment schedule – Be clear about how much rent is due, when it’s due and how it’s paid. Cash rent per acre, crop-share agreements and a number of other methods are commonly used, but both parties should agree on the amount and payment schedule. Rent might be due before planting, after harvest or split between the two, but make sure the terms are clear.

In a crop-share agreement, make sure the lease states the exact percentage of the harvest going to the landowner and the operator. Be sure to be clear about who gets subsidies or other government payments and if and how they’ll be split.

While it might not be pleasant to contemplate, prepare for years with crop failures or no harvest. Address whether rent is still due in such cases and if government payments are impacted by crop losses.

  • Duties & responsibilities – The lease should clearly define both parties’ responsibilities. For the operator, this typically includes planting, maintaining and harvesting crops while also complying with state and federal laws on pesticide and fertilizer use. Operators should avoid unauthorized public access, dumping waste or making structural changes to the land without permission.

The landlord also has responsibilities, such as disclosing any hazards on the property, like wells, underground tanks or waste disposal sites. Landowners might also be required to help fund improvements, like drainage systems or terracing, and ensure the land is ready for farming.

The lease should address the condition of the land at the start and end of the lease. Some leases require the operator to return the land in similar condition, particularly when it comes to soil fertility. This helps preserve the land’s long-term productivity.

  • Insurance & indemnity protection – Both the landowner and operator should maintain comprehensive liability insurance to cover accidents, injuries or property damage. Whether it’s an accident with equipment or an injury on the land, proper insurance prevents costly litigation and ensures both parties are protected.

In addition to insurance, include a hold-harmless clause that releases each party from liability for accidents as long as both are complying with the lease terms. This ensures neither party can sue the other for accidents outside their control.

Finally, include an indemnity clause, which requires one party to compensate the other for damages or losses caused by a breach of contract. For example, if the landlord fails to disclose a hazard and the operator suffers damage because of it, the landlord is responsible for covering those costs.

By following these steps, you’ll create a lease that’s clear, concise and protective for both the landowner and the operator. A solid lease ensures both parties are on the same page, reducing risks and strengthening the partnership. With these key components in place, you’re ready to build a successful and long-lasting farming relationship.

For more information and tips on securing the services of an attorney specializing in farmland leases, visit farmlandaccess.org.

by Enrico Villamaino