Leasing your farmland can be a way to bring in extra money, and it is a good option for property that you are not utilizing. While there are many advantages to leasing farmland, there are also some potential pitfalls that you need to avoid. You want to make certain that you enter into a lease agreement that is beneficial. It is often a good idea to seek legal guidance with farmland lease agreements to protect your rights.
Rental prices should reflect the current market value of property in your area for the type of use that the tenant intends. Make sure that you include a clause that allows you to increase rent. Look into farmland values through the United States Department of Agriculture (USDA). They provide annual reports that show cropland and pastureland values. Follow state laws for lease renewals. In Minnesota you can specify the date in the lease or must provide three months’ written notice if you intend to terminate the lease. In Wisconsin, you must give 90 days’ written notice prior to the lease end date.
Address Land Sales
A lease could inhibit your ability to sell your property. Many people think that if they sell their land, any leases in place are automatically ended; however, that is not usually the case. Generally, a buyer will need to keep a tenant if they have a current lease in place. This could make it more difficult to sell your land. If you are considering selling your property, consult with an attorney to include details in the lease that will make selling easier. If you want to sell your land, include some verbiage in the rental agreement.
Right to Go onto Property
Typically, a landlord cannot just go onto the tenant’s property, even though they own the land. The landlord needs to get written permission from the tenant to enter the property, except for repairs and emergencies. If you need to use the land, for example, to get into other sections of your property, make sure that you include permission in the lease. If you do not have authorization and it is not in the lease, you could be prosecuted for trespassing.
Include Permission for Hunting
If you use some of your land for hunting purposes, you must get written permission from the tenant to hunt on their leased property. For this reason, you should include hunting permission in the lease itself to prevent problems from occurring.
Remember that a written lease agreement is a contract and it takes precedence over a verbal agreement or handshake deal, so always write the details into the contract.
Leasing farmland can be lucrative and offer you many benefits and extra income. Do not get into a lease without help from a skilled attorney. At Moen Sheehan Meyer, Ltd, we have years of experience working with farmland leases. We are happy to assist you throughout the process. Contact Moen Sheehan Meyer, Ltd. online or call us today for a free case consultation at (608) 784-8310.