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Farm Lease Agreement
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Word
A comprehensive farm lease template is an essential legal tool for farmers and businesses who wish to lease out their farm land to third parties.
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What is a farm land lease template?
A farm land lease template is a legally binding document that sets up the rules for using agricultural land for farming operations. This document provides a clear legal framework aimed at clarifying lease conditions, preventing disputes, and protecting both parties’ rights throughout the duration of the lease.
A simple farm lease agreement template includes the following important elements:
- detailed description of the parties involved;
- location and size of a farm;
- purpose and type of the lease;
- payment mode, frequency of payments, and late fees;
- duration of the lease;
- termination of the lease and its renewal (optional);
- obligations of the parties involved;
- applicable law; and
- dispute resolution.
The parties involved in a farm lease agreement are a landlord and a tenant. A landlord is an owner of a farm who wishes to rent it to a tenant. Under a farm lease template, a landlord could be an individual or a business. It is also possible that a landlord could be represented by a property manager authorized to sign this document on their behalf. A tenant is an individual farmer or a business that wants to use the farm for specified agricultural purposes.
Which types of the lease this template is suitable for?
There are four most popular types of the lease, for which the present farm lease template can be used:
- Cash Rental Lease. According to this type of a farm land lease template, a tenant can use a farm for various agricultural projects and pay regular rental cash payments in exchange. This is the most popular type of farm lease in the U.S.
- Crop-Share Lease. This type of farm lease allows the tenant to use a rented farm to raise specific crops only. Once the harvest is collected, a tenant shall return to the landlord a portion of it. This portion constitutes a rental payment under a lease contract and substitutes a regular cash payment under the normal lease.
- Livestock-Share Lease. In this farm lease agreement sample a tenant shall use a rented farm to increase or grow livestock (e.g., cows, horses, etc.). Rent is being paid in the form of a percentage from the increased number of livestock. This type of farm lease agreement remains less popular.
- Flexible (Variable) Cash Lease. This rent adjusts based on yield or commodity price, a hybrid between cash and crop-share. For example, a part of the rent can be paid in cash, while the remainder is being covered by the cash equivalent of crops.
Difference between a commercial property lease agreement and a farm lease
A farm lease is a special type of commercial activity that generates profits. The most common misconception is that many farmers may think that using a standard commercial property lease agreement is suitable for a farm lease as well.
| Farm Lease Agreement | Commercial Property Lease Agreement | |
|---|---|---|
| Type of a property being leased | Farmland, pasture, ranches, orchards, vineyards, and other agricultural land. | Office, co-workings, stores, warehouse, restaurants, other types of commercial premises. |
| Purpose of usage | Agricultural production, crop cultivation, livestock grazing, or related farming activities. | Business operations, retail sales, professional services, manufacturing, storage, or other commercial activities. |
| Type of rent payments | Cash, share of crops, livestock, hybrid etc. | A fixed cash rent, triple-net or other arrangement. |
| Legal framework | State laws and the provisions of the original lease. | State commercial leasing laws, contract law, and property law. |
| Typical lease duration | Often seasonal, annual, or multi-year. | Commonly three to ten years, although any negotiated term may be used. |
| Maintenance responsibilities | Parties have to decide who shall be responsible for fences, irrigation, allocation of pesticides, fertilization etc. | Parties have to allocate responsibility for minor and major repairs, maintenance of common areas, HVAC systems etc. |
| Parties involved | Landowners, farmers, ranchers, and agricultural businesses. | Commercial landlords, property management companies, retailers, office tenants, and other businesses. |
To sum up: If you are looking for commercial premises to start doing your business, including provision of services, office work, sale of goods, a commercial property lease agreement template is the right legal tool for that arrangement. When, however, you are looking to lease or rent our agricultural land for doing farming, including cultivation of crops or raising a livestock, in such a case this farm lease agreement template is a right choice.
Why is having a professionally written farm lease contract essential for agricultural businesses in the U.S.?
A solid and professionally written farm lease agreement template from FasterDraft:
- Fixes the rent payment—no one-way change by either party
Mike has farmed his neighbor’s land on a handshake agreement for six years. When his neighbor tried to raise the rent, Mike learned the hard way that without a written lease, either party can be change conditions of the lease any time.
- Aligns with the U.S. legal context
FasterDraft offers templates that fully align with applicable state and federal laws. We never sell multijurisdictional or generic templates.
- Reflects current best practices
This professional template reflects the most recent best business practices in agricultural business.
- Saves legal costs
You get a complete document template with a professional outline at $29.99, while drafting the same document with an attorney would cost you $400 or more and weeks of waiting.
How to draft a farm lease agreement template?
The law does not define a form for a farm land lease template. Therefore, parties are free to incorporate any provisions they want. At the same time, inclusion of certain clauses is essential to ensure the coverage of all important elements of the lease, like farm description, parties’ details, amount of rental payments, and lease duration.
Therefore, below we made a short list of key elements a well-drafted farm lease contract should have:
Description of the Farm
The text of a contract must define the type of a farm and its precise location and size (in acres or hectares). The parties should also define for which particular purpose a rented farm could be used. Failure to adhere to the purpose of usage may result in earlier termination of a lease contract by a landlord.
Besides that, a farm lease agreement sample shall define the type of lease (i.e., cash, crop, or livestock), as it directly affects the applicable payment model under the contract.
Maintenance of the Farm
The duty of maintenance is a duty of care that requires a person to ensure safe and efficient usage of a rented farm. The maintenance may include either of the following duties:
- minor repairs (e.g., repair of a fence);
- collection of waste or its disposal;
- drainage and irrigation system maintenance, etc.
The parties to this contract can define who shall be responsible for the maintenance of a farm during the lease period—a tenant or a landlord.
Payment Model
Even a simple farm lease agreement template shall stipulate a clear payment model. In particular, a tenant should be aware of how much, when, and how to pay rent. Thus, the text of a contract shall define:
- form of payment (e.g., cash, share of crops or livestock, etc.);
- frequency of payments (e.g., monthly, within a certain period of time after the harvest, etc.);
- acceptable payment methods (e.g., cash, debit card, etc.);
- allocation of additional costs (e.g., veterinary control over the livestock, feeding, etc.);
- penalties in case of a delayed payment (optional).
Duration
A farm lease contract template must define the day on which the lease starts and the day on which the lease ends. The start date of the lease could be the same date the parties sign this agreement or any other date in the future. The state laws do not limit the maximum duration for which the farm could be rented for. However, the average period of farm renting varies between 2 and 5 years.
Termination
The rules governing termination of the farm lease in the United States differ significantly from how the standard residential or commercial lease may end. In case of a termination by either party, the notice period and the agreement’s last date depend on whether there is a fixed end date in the farm lease or not.
If there is a fixed end date, in most of the states this is a contractual term of the written agreement that defines when and how the lease should be terminated. Typically, either party should be able to end a farm lease contract any time with or without a cause by sending a prior written notice to another party. A notice period may last between 14 and 90 days on average. In some cases, legislation of certain states may provide specific requirements for a statutory notice to be sent. For example, in Illinois a statutory notice must have the following wording (735 ILCS 5/9-206): “You are hereby notified that I have elected to terminate your lease of the farm premises now occupied by you, being (here describe the premises) and you are hereby further notified to quit and deliver up possession of the same to me at the end of the lease year, the last day of such year being (here insert the last day of the lease year)“.
Where the contract does not specify the end of the lease, provisions of state-applicable regulation shall apply. For more information regarding termination of the farm lease in that situation, read the next section below.
Parties may also end an ongoing farm lease contract by signing a mutual lease termination agreement. In such a case it does not matter if the ongoing lease has or doesn’t have a fixed end date as the contract may end any time.
Renewal Clause
Parties may wish to include in a farm land lease agreement template an automatic renewal clause. If this is so, a farm lease is being prolonged automatically after its end date for the same period of time as the duration of the original lease. If either party opposes such an automatic renewal, in that case that party shall send a prior written notice about the non-renewal before the agreed lease end date.
State-by-State Guide on Terminating a Farm Lease with no-fixed end date across the U.S.
If the ongoing farm lease contract does not have a fixed end date and you are willing to end it, it is important to know about the compliance with mandatory legal deadlines applicable for termination and defined in state laws. Failure to align with indicated deadline locks you in a farm lease for one more year.
| State | Deadline for termination notice | Termination of the lease | Legal framework | Exception |
|---|---|---|---|---|
| Iowa | Written notice must generally be served on or before September 1 to terminate the tenancy for the following year. | Farm tenancy terminates on March 1 | Iowa Code §§ 562.5, 562.6, 562.7 | (i) If the crop is a corn, termination cannot be later than 1st of December. (ii) If the farm lease is a mere cropper, the lease must end on the date of full harvesting the crops. |
| Texas | Primarily defined in the farm lease agreement. If there is a verbal contract or the contract does not specify the termination notice, applicable state law shall apply. | As specified in termination notice. In the absence of the contract regulation, check state law. | Texas has no dedicated farm-tenancy statute — the general residential/commercial default notice rule applies, which is why a written lease with clear termination terms matters even more here. | In the absence of contractual regulation, the provisions of the Texas Property Code applies by default. In particular, if the rent paying period is one month, a 30 days’ prior notice of termination shall be sent. When the rent paying period is less than one month, the termination notice shall be equal to such a rent paying period (Texas Property Code § 91.001(b) and Texas Property Code § 91.001(c)). |
| Nebraska | 6 months before lease end, or September 1 at the latest, whichever is earlier | End of lease year (year runs March 1–March 1) | Nebraska Supreme Court precedent on “notice to quit,” applies towards the notice period. | Not applicable. |
| Illinois | Written notice must generally be given at least 4 months before the end of the lease year for year-to-year farm tenancies. | A year-to-year farm tenancy terminates at the end of the lease year following proper notice. | 735 ILCS 5/9-206 | The statute specifically addresses termination of year-to-year farm tenancies. |
| Kansas | Written notice must be given at least 30 days before March 1 | Farm or pastureland tenancy terminates on March 1, subject to statutory protections for fall-seeded crops. | Kansas Statutes Chapter 58 “Landlords and Tenants”, Articles 2506 and 2506(a) | (i) If the notice of termination after the 30th day preceding March 1 and when the planting of a crop has not started, the last lease date shall be either the day following the last day of harvesting such crop or August 1 in the such succeeding year (which ever comes first); (ii) if prior to receiving such a notice a tenant has applied paid fartilizers on the ground and has not planted the ground, the landlord must fully compensate the tenant all such expenses. |
How to customize a lease template at FasterDraft?
To get a fully personalized legal document template, follow the instructions given below:
- Click the “Create Document” button.
- Answer simple questions in the form.
- Select a template’s format—farm lease agreement template Word or PDF.
- E-sign the document online.
- Make a payment.
- Download, print, and instantly use your customized farm lease agreement.
Table of content
Frequently Asked Questions (FAQ)
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1. What is the difference between a farm lease template and a commercial lease agreement?
A farm lease template is a legal document that defines terms and conditions for a temporary usage of the farm for various agricultural purposes. Those purposes may include raising livestock, crops, etc.
Contrary to that, a commercial lease agreement is a formal document under which one party rents out commercial premises from the other party for doing business. In other words, you may need a commercial lease contract when you want to open a restaurant or a bar.
Apart from that, the content of both documents also varies significantly. For example, rental payments under a commercial rental agreement should be performed in cash only. However, in a farm lease contract template, a tenant can make rental payments in various forms, including
- cash payments;
- fixed percentage from harvested crops;
- fixed percentage from raised or increased livestock; or
- hybrid.
Finally, the list of a tenant’s duties and obligations also differs depending on the type of contract. For instance, in a farm lease agreement, a tenant is required to adhere to federal and state environmental laws when doing business on the farm, which is not the case when renting office space under a commercial lease agreement.
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2. Which clauses shall a basic simple farm land lease agreement form include?
Neither federal nor state laws define the exact list of clauses a farm lease should include.
Besides that, the final content and structure of the document widely depend on the arrangement between the parties. For instance, under one farm land lease template, parties may not include an automatic renewal clause, while in another similar farm rental contract, the same clause could be kept.
At the same time, there is a list of mandatory elements every farm lease contract template should have to remain complete and legally sound. Those mandatory elements are the following:
- description of the farm (location and size);
- purpose of the lease;
- amount and frequency of lease payments;
- duration of the lease;
- grounds for immediate termination of the lease;
- maintenance duties;
- dispute resolution clause; and
- applicable law clause.
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3. How to sign a farm lease template?
A landlord and a tenant shall put their signatures at the end of the document. Without either party’s signature, a document will not become legally valid and binding for the parties.
You can put a signature by hand after printing out the document, or you can e-sign it using online e-signature tools.
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4. What happens if I don't give proper notice to terminate a farm lease?
Failure to deliver a termination notice on time may lock you in the lease arrangement that you no longer want, as well as cost a full extra year of unwanted rent.
If the parties to the current farm lease contract are on good terms, the party willing to end the agreement may persuade the other to terminate the lease based on the mutual consent. If this is the case, a separate lease termination agreement should be signed.
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5. Can my tenant harvest crops after the lease ends?
Yes, most of the state laws allow tenants to prolong the farm lease contract in the part allowing tenants to harvest planted crops, provided specific circumstances are fulfilled.
For example, in Kansas if the notice of termination is sent after crops have been planted, in such a case the termination notice shall be construed as fixing the termination of the tenancy of such portion to take place on the day following the last day of harvesting such crop or crops, or August 1, whichever comes first (Kansas Statute, Chapter 58, Article 2506).
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