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Owning Land

Farmland Leases: What You Need to Know

August 2, 2019

Leasing farmland 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 farm 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 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.

About the Author
Ryan Schroeter, Broker for National Land Realty in Nebraska and Iowa, grew up on a farm in Northeastern Nebraska. His father and grandfather instilled his love and respect for the land and for the outdoors in him at a very young age. He has been an avid hunter and fisherman since he was able to carry his own gun and fishing pole. His outdoor passions include upland game, waterfowl, turkey, and big game. Ryan, his wife Brenda, and their two daughters live in a small rural community between the Elkhorn and Missouri River. He is a 1997 he graduate of the University of Nebraska - Kearney, Nebraska during this same year he received his real estate license. In 2003, Ryan obtained his broker's license. Ryan is an Accredited Land Consultant (ALC) through the Realtors Land Institute (RLI) being 1 of the 7 in Nebraska. His main focus is crop land and recreational properties in Nebraska and Iowa; throughout his years in real estate sales, he has sold row crop farms, recreational/hunting farms, ranches, acreages, development and transitional property. While at National Land Realty, Ryan has received numerous Top Producer awards. He is also a registered appraiser working under Steve Kroeger a Certified General Appraiser and is working on obtaining his Certified General Appraiser license. View Ryan's Listings and Reviews on NationalLand.com