25 Oct Lease Renewal’s Loom
Lease Renewal’s Loom
Rooster Ag’ Farm Management
It’s that time of year when the sunsets come a little too soon, and the farmers continue to work the fields long into the night. It’s Harvest time, and with the harvest comes a time of reflection on the growing season and a time of preparation for the next season. As combines roll, it’s time to dig out your farm leases and dust them off for an annual review.
The Farm Management team has laid out some considerations as the farm lease last notice deadline approaches. October 31st is typically the last notice day to make any changes to your lease arrangements in Illinois. Communication is key to a successful relationship, and ensuring your goals are identified and actionable is our top priority.
- Additional lease provisions – Have you given thought to items such as conservation or sustainable farming practices, investing in farm improvements, and overall flexibility? There are situations in which a reduction in cash rent makes sense. These can help offset production risks to transition to specific farming practices or when determining how to pay for farm improvements. Having transparent conversations allows us to work with the right tenant and ensure everyone’s long-term success.
- Assuming the status quo – handshake agreements leave room for vague interpretation. We encourage a written lease to clearly address the interests of each party, which ultimately strengthens the relationship between the land owner and farm operator. Even if you plan to renew with the same tenant, it’s crucial to provide a termination letter acknowledging the past verbal agreement and simultaneously agreeing to a new lease structure.
- Lease termination – If you want to make any changes regarding any details in your current lease, such as tenancy, or change in rent structure (50/50 farming, cash lease, etc.), a written notice must be given four months prior to the lease start date, presumably March 1st of the growing season. A written notice is not required if your lease specifies an annual term, that supersedes this deadline. In order to terminate your lease and renew it differently, a written termination letter sent by certified mail is strongly suggested to ensure it is received.
It can be cumbersome to have difficult conversations with lifelong friends or even family; a farm manager can work as a liaison and preserve your relationship. While leases and renewals seem like they add a lot to think about, we are happy to help you every step of the way. Feel free to check out our Farm Management page for more information on the services we have to offer and to get in touch with one of our specialists today.