Agricultural Property Lease Agreement

As an owner of land in the countryside with a ranch or farm placed on the territory, you might not want to use it yourself. Instead, another person interested in farming can rent your land. In this case, it is a good idea to sign an agricultural property lease agreement.

In this article, you will find information on what an agricultural property lease agreement is, what should be included in this document, and crucial steps to follow when preparing the form.

Moreover, we will cover cases in which a landlord and a tenant agree to sign an agricultural property lease agreement to prevent potential problems and arguments.

What is an Agricultural Property Lease Agreement?

A property land lease is a document that is widely used in agriculture when it comes to renting land for farming.

There are two types of agricultural property lease agreement:

Cash lease.
Crop-share lease.

The difference between these types is based on the rental rates. However, the essence is the same since both forms are used for renting land for farming.

A cash lease

The main feature of a cash lease is a fixed price that the tenant has to pay for renting the land. For example, the price might depend on the sum per acre, or it can be fixed for the whole property.

This type of lease contract might seem appealing for landowners since they receive the same amount of money each month, enabling them to plan their budget in advance. It causes a feeling of stability. However, a cash lease might be dangerous for tenants because their outcome depends on the reaped crops. It means that sometimes, they will have to pay more than they have received when using the land. It is possible to agree on some exceptions concerning price-changing circumstances.

A crop-share lease

When a landowner and a tenant agree on a crop-share lease, the landowner will get a part of the crops that have been grown on their land. Using this type of lease is usually more convenient for tenants since they do not have to worry about paying the rent in seasons with low agricultural productivity.

Moreover, the landowner might even add their money for some essential input costs. But not all landlords would agree on a crop-share lease since more time is needed to watch their land and productivity.

When to Use an Agricultural Property Lease Agreement

We recommend using an agricultural property lease agreement when you want to find a tenant for your land or want to rent land yourself. This form provides a comprehensive list of agreements that might improve your rental experience, safeguarding you from problems and misunderstandings.

As a landlord who does not want to perform agricultural activities themselves, you might like the idea of renting land. There are numerous advantages of this kind of land use:

The land will be improved and used for good reasons. For example, your ancestors might have cultivated the land, so it is still favorable for growing crops.
As a landlord, you might want to reduce taxes. Check if the sum you pay depends on the type of land in your state. In some cases, if your land is used for agricultural purposes, the amount of taxes will be smaller.
You might simply have no time for farming. In this case, you can still make money by renting land and receiving a sum from a tenant or a crop share.
You can contribute to the development of local farming and be proud of the products that were produced on your farm.

What Should Be Included in an Agricultural Property Lease Agreement

When planning to sign an agricultural property lease agreement, you should consider some crucial points to include in it. Some of them are essential because the government usually asks for them, while some should be included since they make the lives of a landowner and tenant much easier.

Rental period
Description of the land
Attorney fees
Rental details concerning a rental rate that both parties have agreed on
Some termination rules
The list of farming activities that the landowner allows performing on their land
Plant species that a tenant can grow
Prohibitions concerning subleasing;
Possibilities to buy land
A list of requirements connected with local conservation provisions that the tenant must follow
A type of insurance that should be purchased
A tenant’s consent to exterminate weeds on the land
A tenant’s consent to take care of the land and improve it

How an Agricultural Property Lease Agreement Works

To begin with, you have to choose whether you want to sign a written agricultural property lease agreement or an oral agreement that will be enough. We recommend spending time on a written form because it is a more reliable option.

Find all the essential steps that you should follow when filling out an agricultural property lease agreement:

Write down the names of the landowner and the tenant.
Briefly describe the tenant’s agricultural goals.
The landlord must write down the following details: location, features, and bounds of their land.
Fill out the first and the last date of the rental period.
Write down the price for land rent (per acre and the total sum for a year).
The tenant and the landowner should agree on the permitted uses of the land.
After that, some cases of prohibited uses should also be mentioned in the form.
In point number six, the tenant agrees to follow some rules concerning annual plans. In addition, some actions might be filled in.
The ninth paragraph refers to the determination of the agreement. Any party that would like to end a rental period should notify the other party in advance. Write down how early a person must send this notice.
Moreover, fill out the number of days in which one of the parties can provide written notice in case of some exceptional circumstances.
You can agree on some additional conditions and write them down in point number 13.
Both the landlord and the tenant should sign the document and write the current date on it.