A farmland lease as a landowner is a great way to earn some extra income. And for tenants, leasing farmland is an opportunity to start your own farm when you don’t yet have the funds to purchase your own property. 

The process and termination of farmland leases can be tricky at times, though. So, it’s important to know your rights as a landowner and as a tenant.  

There are two main types of leases: written and verbal. 

Many farmland leases in Nebraska are verbal. And most of those verbal farm leases are between family members. This means that the family members entered into an unwritten or “handshake” agreement for leasing the farmland. People usually prefer this lease method because they don’t feel the need to enter into a legal contract with a family member they feel they can fully trust.

However, a verbal lease between individuals, especially families, can pose some problems whenever the tenant decides they want to end the lease. The most common legal problem that comes with verbal leases is how a farmland lease can legally be terminated. Legal issues over verbal farm leases can take a toll on the relationship between family members and lead to a never-ending battle. 

According to an article by J. David Aiken, Water & Agricultural Law Specialist at the University of Nebraska-Lincoln, “for unwritten leases, six months advance notice must be given to legally terminate the lease.”

Written farmland leases are just that, written. For these, termination guidelines are clearly stated in the written lease. “If nothing is specified, a written lease terminates automatically on the last day of the lease with no automatic renewal,” according to the article by Aiken.

So, before you enter into a farm lease, whether you’re a landowner or a potential tenant, make sure you’re taking the right steps to make it easier for yourself in the future.

Readers should not act upon the information contained in these materials without legal guidance. This information should not be considered as legal advice or as a legal opinion.