What is in this article?:
- Cropland leases: What producers need to know
- Maintenance of property
• In today’s world, producers realize that lease terms and misunderstandings as to the provisions in lease agreements can be costly and may even result in the complete breakdown of the landlord-producer relationship.
Maintenance of property
Maintenance of property — Alease should expressly state the responsibilities of both the landlord and the tenant in regard to the maintenance and repair of the leased property, as well as any improvements on the premises. Often a cropland lease will involve the maintenance of soil fertility and the control of noxious weeds. It is wise to address these issues in detail. A good farm lease will also address the possibility of reimbursement or the discounting of rent, where the producer is forced to spend a large or unanticipated amount of money in the maintenance or repair of the landlord's property or improvements.
Liability issues — Acropland lease should not unfairly apportion liability to the producer. In addition, the lease should require that insurance is carried on the property, and the lease should assign the responsibility to obtain and maintain coverage to one of the parties to the agreement.
Federal farm programs — A farm lease that involves cropland should also address federal farm programs, especially whether the landlord or the farmer has the authority to make determinations as to farm program and conservation program participation.
Arbitration provisions — Producers should understand that, by signing a lease agreement which includes an arbitration clause, they are limiting their right to use the Court system to protect their interests. Arbitration proceedings are, for all practical purposes, final.
Producers should also be aware that arbitrators are not judges and may have no legal experience or an adequate understanding of the legal issues presented by a cropland lease dispute. Producers should give significant thought to the consequences of an arbitration clause before signing a lease that mandates the arbitration of disputes between the landlord and farmer.
In conclusion, this article has simply highlighted some of the basic issues that should be addressed in a cropland lease.
It is always a good idea to have an attorney draft and review a cropland lease prior to entering into the lease agreement.
Remember, a quality farm lease that fairly addresses the above-mentioned legal issues may very well assist a producer in avoiding unneeded controversy and result in a longstanding and profitable relationship between the producer and landlord.
EDITOR’S NOTE — Grant Ballard is an attorney with the Banks Law Firm in Little Rock, Ark. He practices in the area of agricultural law, including farm leasing, crop insurance disputes, and federal farm programs. He can be contacted by phone at (501) 280-0100 or by email at email@example.com.