Over the past several months, I’ve had several parties call with questions about their lease. This contact has been from all walks of life, meaning younger, older, very wealthy, not very wealthy, just all the combinations that you can think of. There are even situations between family members and situations between neighbors who have been friends for decades.
Essentially, all of the questions about the land lease are in the details called the provisions. Specifically, it boils down to not having them spelled out in the lease, or not even having a written lease. Usually, the trust between the landlord and tenant erodes quickly if there are questions as to who pays for what within the lease.
If you need to start a written lease and want to know where to begin, consider downloading a blank lease from the website:aglease101.org. On that page, select the link named “document library” and the downloadable lease forms are in the right column.
One retired and quite elderly farmer/landlord from the Auburn area came up to me after a presentation at the Lease Workshop and said: “I don’t need a written lease! I was raised to respect and honor a man’s word as his bond!” I responded by saying: “You are absolutely right; your generation’s word was your bond.” Our older generation conducted their business by handshake or verbal agreements, and it worked well for them.
In my observation a couple of things happen that make the ‘handshake’ agreement less useful now. One is that there are all kinds of ‘deals’ (amendments) made with the leases by our fathers/mothers and grandparents. So, standard lease practice isn’t in place for this lease. Therefore, when one party passes, or is no longer active, the lease is handed down to the next generation and these quirky amendments to the lease are questioned.
The other observation is that every neighborhood is just a bit different. Just when I think I’ve got the standard lease arrangements figured out, someone says: “That is not how we do leases in this neighborhood.” Having local rules for a lease isn’t wrong at all, is just makes things different.
So these are just a couple of examples to illustrate the importance of a written lease. Getting the lease provisions written down in a way that both parties can understand is critical for the long term success of the lease agreement. There really isn’t an option in my view.
Let me finish this column by saying, communication between landlord and tenant is the backbone of a solid lease arrangement. Many times, if the two parties had contact throughout the year, instead of just at lease negotiations, the visit about next year’s lease would become so much easier. Tenants need to be sharing information about the cropping year as it happens and landlords need to be communicating their expectations for how the land is managed. The visiting about the land resource as the year progresses will usually preserve that lease arrangement for decades to come.