Sep 2, 2021 | The Practical Real Estate Lawyer

The following checklist is meant to act as a guide to various lease terms and provisions specific to farm leases. However, each lease is specific to the parties involved; accordingly, some of the items addressed below may not be relevant to a given lease. Similarly, the below list does not attempt to address all matters that may be addressed in a given farm leasing arrangement.

Farm Leases: Twelve Important Things to Consider - by Marisa Bocci - Presented by ALI CLE

Description of the farm

  • Do you have an accurate survey or legal description? Is there an USDA/FSA number associated with the farm?
  • Is the rent being charged by “cropland” acres?
  • If so, do you have an accurate survey of the cropland acres? (Who decides what is cropland?)

Length of the lease

  • Is this an annual lease?
  • Multi-year lease?
  • Does the tenant have the right to renew the lease?

Note that leases involving permanent crops are often for longer terms (tied to the growth cycle of the permanent crops); leases involving row crops or pastureland are often one year in length.

Practice tip: In order to make a farmland development arrangement economically viable for permanent crop tenants, lease arrangements often have terms that address the timeline necessary to plant the crops and install any initial irrigation infrastructure. Further, depending on the type of crop, the lease term will correspond to the viable life of the crop (noting that certain permanent crops have harvest lives ranging from 25 to 50 years). Extension rights allow a tenant to continue to harvest should the orchard or vineyard continue viability beyond the initial contemplated life of the crop.

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