Written lease for farm land is solid business practice

Posted 4/18/01

Written lease for farm land is solid business practice

A written lease for farm land is a good practice. Oral leases for one calendar year are enforceable, but the terms of the lease, such as the price, plow-back rights, conservation issues, etc., are more certain and less subject to dispute if the lease is in writing.

If the lease is for more than one year, it will not be enforceable unless it is in writing. This means a renter or landlord cannot legally hold the other party to the terms of a multi-year lease unless the lease is written.

This can be a problem if the land is sold, if the landlord dies, or if the landlord attempts to raise the rent or to rent to another farmer.

It can also be a problem if the tenant plants a perennial crop such as alfalfa, or makes substantial improvements to the land on the assumption the tenant will be able to lease long-term.

The payment of rent is an important part of any lease. A landlord wants to be certain the tenant can pay the rent. The tenant wants to insure the rent is paid to maintain a good relationship with the landlord, avoid eviction and have the opportunity to rent the property the next year.
A landlord lien can accomplish the goals of both landlord and tenant. Under Minnesota law, a landlord has a lien for the unpaid rent in any crops produced by the tenant on the rented property.

A perfected landlord lien has priority over the liens and security agreements of most other creditors.

To perfect a landlord lien, a lien statement must be filed with the appropriate government office within 30 days after the crops begin to grow. To perfect a land lien you should contact an attorney knowledgeable in agricultural law.