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Making a Farm Lease
Farm Lease Agreements are contracts between an owner of farmland and a tenant who plans to use the land for farming or raising livestock. As a property owner, you can make and sign Farm Leases to safeguard your interests and generate income without having to work the farm or ranch yourself. With signatures from the owner (the "lessor") and the tenant (the "lessee"), this essential contract helps define each party's respective expectations. You can tap or click the button labeled "Make document" to take a closer look at the sample Farm Lease and see what information you'll need to provide to personalize your lease.
There are different types of farm rental arrangements, but this document from Rocket Lawyer is specifically for what is often called a "cash-rent" Farm Lease Agreement. This means that the tenant pays for the use of the land, but the land owner does not share a percentage of the income generated from crops or livestock. The advantage to this type of agreement is that the land owner receives predictable, scheduled payments. The disadvantage is that they don't receive a possible larger payment if the tenant has an exceptional year.
If you want to take a part of the crop or livestock risk/gain as the land owner, you can enter a Crop-Share Lease Agreement. For this type of lease, you should work with a lawyer to make sure your agreement meets your specific needs.
Even if you are renting from or leasing to a longtime friend or neighbor, it is crucial to record the details of each rental in a lease. You might decide that you want this document because, when made properly, it grants the following benefits:
Some consequences of not signing this document might include property damage, unexpected changes to the rental arrangement, unauthorized usage of the property, and late or unpaid fees.
As with any legal contract, a Farm Rental Agreement will not be legally binding until it is signed. Unlike a blank Farm Lease template that you may find on another site, each rental contract on Rocket Lawyer comes with the option of Document Defense®, so an On Call attorney can assess the situation and take action if you need to demand payment or experience any other issue.
Specifics that you should plan to cover in a Farm Lease are:
Farm Leases made on Rocket Lawyer include details about the relationship between the landlord and tenant, namely that there is no business partnership or joint venture in place. The contract also states that creditors or others cannot put liens on property the landlord owns to collect from the tenant. Finally, the agreement limits the tenant to using the property for only planting, growing and harvesting of crops or the feeding, pasturing, maintenance or production of agricultural livestock. It restricts tenants from using any type of chemicals that will cause long-term effects on the land and it disallows dangerous materials to be stored on the premises.
As you may expect from a document like this one, a Farm Lease will also include rules related to past due fees, insurance and liability, the owner's option to sell, and governing law. Further personalization is permitted, if necessary.
The cost of finding and working with your average law firm could total anywhere from several hundred dollars to thousands, if your matter is complex. If you have decided to draft this free document with Rocket Lawyer, you will need to use the following directions. You can always ask an attorney in our nationwide network to review it for you after generating it.
To be frank, you can charge whatever the lessee agrees to (which may or may not be in everyone's best interest), but to determine a fair lease amount, you will need to balance expenditures and potential gains. Ideally, both parties will have their expenses met and both will enjoy a profit. If you are thinking about a long-term agreement, you'll want to try to ensure that the tenant can maintain your land well and afford ongoing expenses.
If your tenant will be growing the same crops that you are accustomed to doing yourself, you should have a good idea about what the expenses and yields might be. You may also want to look up the current rates for land in your area.
You and your tenant can decide how to cover these expenses. During the term of the agreement, the landlord still owns the irrigation system, but the tenant will be using it. Here are some possible solutions:
Grain bins are not exclusively included in this lease, but you can customize this lease or create a separate equipment lease for use of your grain bins. If the tenant chooses to lease your bins or bring in other pieces of equipment, make sure to consider the amount of utilities required to operate or maintain them.
Often farm or ranch land will include residential buildings such as single-family homes, bunkhouses, or mobile homes. You can choose to include those in the lease or you may even keep residing in one of the buildings as part of your agreement. However, even if you do not charge extra rent for these buildings, you should have a standard residential Lease Agreement in place so you can control who lives in the houses, how long guests can stay, and how repairs are made.
Finding someone to proofread your agreement might take a long time if you do it on your own. An easier approach worth consideration is to get help via Rocket Lawyer attorney services. Rocket Lawyer Premium members are able to request a document review from an attorney with relevant experience or send other questions. When managing your rentals, you can work confidently with Rocket Lawyer by your side.
To make this contract truly legal, you need to sign it, digitally or otherwise. RocketSign® makes the online signature process easy. With a Premium membership, you also may make a copy of it, download it in PDF format or as a Word document, or print it as necessary. Once you're finished, all signers should get copies of the fully executed contract. You may also wish to explore our entire collection of additional legal documents.