Question for Farmers that Lease Ag Land

Buddy of mine put a 40 up for sale about 3 years ago....had a verbal agreement year to year with next door neighbor to farm it.

The land was recently sold and the new owner will not let this "leasing" farmer on it this Spring.

The farmer is upset with the seller and is threatening to sic his attorney on him.

I say, without anything but a verbal agreement, this is just an attempt at huffing and puffing and my friend need not worry.

Of course, the renter , now that the property is sold, would have gladly paid the seller "at least" what he sold it for.......what say you?

Tim

The operator or renter of the property must be notified in writing before Sept 1 if he will not have the land for the next planting year by owner.

So by what you told us the farmer has the right to farm it again this year if he was not notified in writng by Sept. 1

This also applies to verbal contracts. This is Iowa law your laws may vary.

Gary

Depends on state law, every one is slightly different. Perhaps this is in Wisconsin, but you didn't say for sure?

Also some states it depends if it is more or less than 40 acres, so if it's a 40 and there is a tiny bit of waste, that could matter.

Many states a verbal lease will auto-renew if nothing is communicated before the end of September or so.

This protects the renter from doing extra fall tillage, fertilizer, lime, contract future grain sales, and _then_ get the land jerked out from under him. Winter-wheat states have a spring deadline, typically....

In my mind, a pretty good way to handle this, really, or you have landowners taking advantage of theirtenents, waiting for the fert to go on and then locking them out.

But, every state is different, some have no clear rules and would need to be litigated individually. Most of these state laws are aimed exactly at verbal leases, as a written lease would already have the details spelled out.

I'm getting a bit lost on how your deal goes, not sure who is trying to sue whom, but the renter does have _some_ rights to get his fall work (for 2013 crop season) paid for, and rights to farm the land if no one told him not to by a certain time.

That would only be fair?

--->Paul

illinois is the same way, must be notified by september 1

It's easy to see all sides here, but your buddy really should have had some boundaries in place and the tenant probably has a leg to stand on if he's already applied some inputs for 2013. If he spent money on that land in anticipation of planting it and didn't learn of it's sale until this late date, your buddy might well be on the hook for some paybacks.

Even with our verbal agreements and year to year rental, we've got our deadlines agreed to and we both expect the other to live up to them.

Gary,,,,I would bet you are right and some law of this sort holds true in WI as well...hope this works out for all of them....the new owner is not a farmer and doesn"t seem to want anyone other than him on the property...

Thanks,

Tim

As I reread your message and get a better grasp on it, I say your friend and the new owner of the land did not understand their responsibilites as land owners/ landlords, and likely owe the renter something for not handling this issue legally and properly.

One of them owes the farmer something, in most states, in most cases. I don't know whickh one a judge would 'punish' for these mistakes, but either the seller or the buyer of the land is morally obligated to make this right with the farmer.

Very poor of them, your friend did not handle this sale properly. Unless there is more to the story, but there should have been yearly notification before fall that this could be the last year of the lease, etc etc etc.

Couple years ago I bought a 40 that was being rented out in January, if the renter would have come at me about it he would have been able to rent it from me for the previous year's rental rate. That was even brought up by the lawyers in the deed signing, that it was an unknown by them but a possibility. I already was aware of that, common knowlege in farm country.

Your friend, in my opinion, made a mistake in how he did business, and in this high-priced cut throat farming ecconomy, likely will face some issues on it.

Might be better to admit his mistake and work something out.

But there can be more to the story and I'm just not understanding your friend's side of the story..... Just have seen this sort of thing happen too often to farmers, land owners trying to take advantage of their tenents. (And yes, I see it the other way around with renters depleating fertilizers, etc too.)

--->Paul

I am pretty sure that lease cut-off date is Mar 1st in Ky. I f the tenent has inputs in the land and was not notified of the sale then he may have a case for restitustion.

I'm assuming you're in Wisconsin (by "WI" in user name)

According to Wisconsin law, the leasor must give notification of termination of lease agreement at least 90 days before the end of previous years lease. If no specific date is prescribed as end of lease, Dec 31st is considered end. Two or more consecutive years of maintaining same casual agreement (in form of unwritten lease) is considered enforcable.

That said, leasor must give leasee notice of termination of agreement NO LATER THAN Oct 2nd of previous year.

Terms of lease are NOT suspended with transfer of deed due to sale of property in question.


OK...I'm no lawyer, and I don't live in, nor farm in Wisconsin, but that all seems fairly straight forward and clear.

Wisconsin ag lease law goes on to determine what leasor owes leasee when terms of lease are violated.

Long story short, get a lawyer (familiar with Wisc laws pertenant to situation. (Leasor will be liable for legal expenses by what I read)

I'm no lawyer, but I did stay in a Holiday Inn once!

Love these questions. We have 50 states- each has an answer to most any legal question, either in statutes or case law. Only one state's laws apply- YOURS! The other 49 don't- and a consensus of guys on a tractor board doesn't play well in court, either.

Verbal agreements are binding in most states- otherwise, the parties would have the ultimate loophole. Have your buddy talk to a lawyer as far as the law regarding cancellation of annual ag rentals- most states have a cut-off date.

The key words here are "year to year verbal agreement" to rent/lease the land. Knowing that the land is for sale this means its for the crop year with the posabilaty of a new owner buying it and maybe not renting to him the next year unless something is set up in the sales contract. Thats why it better to have it in wrighting so there is no question about it. Bandit

IA Gary is on the mark for Iowa law, but I would assume it does vary state to state.

It looks like time for the lawyers to sock it out, or just let him farm it this year and give notice at the appropriate time.

Banditfarmer you are correct in Ohio. You have almost zero protection for renting ground there. It has to be protected with a contract.

Here is Iowa it is different. Even without a contract you have to give the tenant or land owner notice before Sept. 1st if there is going to be a change in the land/lease agreement.

The farm right next to me is going through that right now. It just sold and the buyer will not get to farm it until 2014. The tenant that has it currently leased will farm it this year. The rent will go to the new owner but he does not get possession of the land to use until 2014.

JDSeller- I have a question...In the scenario you just described, could the current renter not add any fertilizer to the soil and/or other practices that would be harmful to the soil, just because he was upset about losing the property?

I would hope that this was not done but people can do strange things when it comes to money.

It could happen that way but most times it does not. To get top yields you need to fertilize to make them happen. Also most leases state that the ground is to be cared for in a reasonable manner. If the tenant did not fertilize any he could be in breach of the contract and be liable for damages.

Some contracts here spell out when soil test are taken and that certain levels of nutrients have to be maintained.

In the case I am talking about it will work out fine. The tenant has most of the farm in hay and has already applied most of his next years fertilizer.

In SD the early notice does not apply if less than 40 acres. Below is the statute and some court interpretations for different cases. Just google it for your state an it will tell you what is the law.
SD Sustainable Farm Lease

A verbal agreement is just your word against his,not much anyone can do.If the renter has installed next years fertilizer in preperation for the next year or did fall tillage,the owner may be liable for that expense if the renter had reason to believe the contract was continuing on.

JD, the new owner might make more money renting it out if the rent is high enough. Jim

I'm not a lawyer but have bought several larger peices of property. In my opion the guy that sold the property is going to be responsible for the renters expenses. Unless the seller told the buyer about the rent agreemnent. If the seller didn't tell the buyer about the agreement or didn't mention it at the settlement then I don't see how you can hold the new land owner responsibe since during the settlement he is buying it free and clear. That's how all settlements that I have been to worked. I;m going to check with a few of my farmer friends to see how it works.

Verbal agreements are worth about as much as the paper they're written on and written agreements are only as good as the folks that sign them.As a practical matter what is the renter really going to be able to do about it? Court cases and lawyers are expensive and for a 40 acre piece of ground to be rented for one year how much could the renter hope to get anyway?If I was the renter I'd just say to Heck with it because it will be more trouble than what its worth to be on that land and the owner not wanting me there.

Sept 1st in Indiana.

lets see,this land was for sale for three years. a verbal agreement between the owner and a renter allowed him to farm it for those years. it sold and the new buyer, doesnt want to let the renter use it. so the renter is mad at the seller. sounds to me like they all got a good deal. owner got his land sold,renter made money, and buyer hopefully made a deal.the only problem I could see is if the renter has a crop in the field. in that case he MIGHT have claim on the crop itself. if any rent money changed hands he might be entitled to a portion of that also depending on when it was sold and what portion of the year he was not able to use it. What he actually legaly would be entitled to would depend entirely on your states laws. here normaly if a place sells,it sells with the condition that the seller can harvest any planted crops.