Farm Lease Agreements FAQ

What is a Farm Lease Agreement?

A Farm Lease Agreement is a form of lease agreement in which the property being rented out by the landlord to the tenant is to be used for farming purposes. Although similar in many (and even most) respects to other forms of lease agreements, the Farm Lease Agreement has very obvious and explicit differences.

Who might be interested in a Farm Lease Agreement?

From the landlord’s perspective, just about anyone with a lot of farmable land (with good crop-growing potential) that is unable or unwilling to do any or all of the farming themselves might be interested in leasing out their farm property so that the land can meets its full potential. From the perspective of a tenant, using a farm lease rather than a straightforward purchase can be a great way to lessen financial risk or even acquire more land than could readily be afforded all at once. Of course, any individual facing a situation that could benefit from a Farm Lease Agreement might be persuaded to sign one if it is in their best interests.

Is a Farm Lease Agreement a type of Commercial Lease or Residential Lease?

Although a Farm Lease Agreement is unique enough to be considered its own category of lease agreement, there are elements of many Farm Lease Agreements that may remind you of more traditional Commercial or Residential Leases. For example, if a tenant is going to be using land to farm but not to live on, then it could be considered a type of commercial lease. However, some parties may enter into agreement to lease an entire farm – residential buildings and all – which would make the Farm Lease Agreement a form of both types of lease agreement.

Who can lease a farm?

Any landlord with a farm to lease can generally lease it out provided that they comply with all local regulations and licenses. From the tenant’s perspective, all you really need to lease a farm are the financial means to do so. Tenants will generally be required to have their own permits and licenses, of course, but the actual leasing of farm property is generally a privilege reserved to anyone with the means to do so. As long as the contract conforms to all local laws and regulations and both parties receive consideration from the contract, two parties can enter into just about any type of agreement they want.

What are the provisions of a Farm Lease Agreement?

Let’s take a look at the most common provisions you’ll see in Farm Lease Agreements:

• Identification: The Name and Address of the parties involved will be listed here, as well as an explanation of the role that each of the parties will take as a result of signing this contract.
• Grant and Lease Term: This will provide the specific details of the property in question, such as its acreage, the buildings it contains, its address, etc. Additionally, it will typically outline the terms of the lease itself such as its dates and expiration.
• Rent: This provision will outline how much rent needs to be paid, and may include additional instructions for the handling of late rent payments.

There may be a degree of smaller “sub-provisions” within a Farm Lease Agreement that you’ll want to pay attention to. For example, maintenance of the grounds you’re responsible for may be outlined in the specific Farm Lease Agreement you’ll be expected to sign as a tenant.

What should I look for in a Farm Lease Agreement?

From the tenant’s perspective, you’ll want to make sure that you can identify the provisions listed above. Additionally, you want to be aware of all of your duties in taking care of the farm itself, as you may be responsible for maintenance of certain aspects of the landscape you had not planned on maintaining. Other variables may arise and will vary from landlord to landlord; make sure you’re aware of these variables before signing anything.

From the landlord’s perspective, you’ll want to make sure that your full terms are represented in the Farm Lease Agreement you have your tenant sign. Even small details that you require should be put into writing so that you can prove that the tenant did indeed agree to these terms should they fail to live up to their promises.

What added variables are included with a Farm Lease Agreement?

In addition to the usual provisions of a lease, a Farm Lease Agreement has some extra variables that aren’t typical of many other leases. For example, the maintenance of weeds along the property fence may not be an issue for most commercial renters, but for a farm tenant, the agreement might require that they’re responsible for them. Additionally, there are farming-specific taxes and tax exemptions which will have to be reported as the result of the business generated from a Farm Lease Agreement, and a tenant will be responsible for providing for his or her own licenses and local permits.

When is a Farm Lease Agreement valid?

Once signed by two fully-consenting parties, the Farm Lease Agreement will be valid. Because the issue of “consideration” is built right in to most lease agreements, it’s not a concern for a contract’s validity. Of course, both parties should not only be of sound mind but should have the other prerequisites to be making this decision – for example, basic needs like the landlord officially owning the property in question must be met.

When is a Farm Lease Agreement enforceable?

Once a Farm Lease Agreement has been signed, the contract itself should be enforceable. However, as is the case for many lease agreements, the actual enforcement of this type of contract will generally not come until certain conditions, such as the basic timetable outlined in the contract itself, are met.

When is a Farm Lease Agreement effective?

Once signed, the agreement will be effective. It will essentially run out of effectiveness once both sides have both satisfied the terms of the lease, though this does not mean that the contract cannot be used in legal challenges later on.