Good Faith Understanding
This Good Faith Understanding (“Understanding”) will outline the human, land, infrastructure, stewardship, community, and financial duties for both 501(c)(3) Agrarian Land Trust (“Agrarian Trust” or “Trust”) and title holding corporations exempt from federal income tax under IRC 501(c)(2) or 501(c)(25) Agrarian Commons (“Agrarian Commons” or “Commons”). The Commons and The Trust acknowledge and agree that their performance under the terms of this Understanding and related Transaction Agreements, including property deeds, ecological stewardship standards, and leases, and all other dealings between the Commons and the Trust shall be governed by the principles of good faith and fair dealing.
Both the Trust and the Commons uphold commitments to fulfill aligned intentions and the shared mission of prioritizing land access for Black, Brown, and Indigenous communities and people in [REGION SERVED BY COMMONS]. Each party agrees that it will perform its duties under this Understanding and related Transaction Agreements in cooperation.
- COMMONS. Our land is the foundation of society, our economy, and the basis of health for humans and more-than-human beings. Our management and ownership regimes, our notions of private property and water rights do not override the laws of nature. We acknowledge the limits of fragile systems and that we are land-users in common with wetlands and wildlands that must be protected from damage and extraction.
- EQUITY for FARMERS. Farmers must be able to build equity in the land, and their business on it. Lease terms must allow the farmer or rancher to invest in infrastructure, soil health, and the long-term interests of the land. Farm practices and economic conditions must support the dignity of labor and provide a living wage.
- AFFORDABILITY. Our agricultural economy is profoundly distorted by energy, subsidies, speculation, absenteeism, commodity markets, unsustainable development, and real estate booms, and the value of food and farm labor is arbitrarily low. Agricultural Land should be affordable from generation to generation, and farmers and ranchers should have increased access to affordable housing and alternatives to credit and extractive loans.
- RACIAL JUSTICE & DECOLONIZATION. We acknowledge the historic and present inequities and systemic oppression inflicted upon indigenous communities and communities of color in the United States. We are committed to working to dismantle racism and systems of oppression by creating opportunities of secure land tenure and sovereignty for communities who have historically been denied access to land, have been dispossessed from their land, or who have otherwise been prevented from building equity through land and farm ownership. We engage in thoughtful consideration of racial equity when evaluating every project, considering active partnerships and initiatives; and when considering membership.
- RESTORATIVE JUSTICE. Enclosure, dispossession, and land loss have dislocated many people and communities from their connection, stewardship, and ownership of the land, creating untold inequity and trauma in our society. With deep respect for indigenous traditional knowledge, we recognize the inextricable links between extractive capitalism and colonialism, and advocate for alternative, indigenous-led approaches that contribute to community and environmental well-being, and participatory community-ownership. We support and share models of re-connection to land, land reparations, and wealth creation for dispossessed people and communities. We seek Commons projects that foster the spiritual and physical relationships of mutual care and respect between people, the land, and all species who share it.
- LAND and ECOSYSTEM RIGHTS. Respectfully borrowed from indigenous perspectives, the first inhabitants of Agrarian Commons land. We acknowledge that land and water are life and must be protected. Land and all lifeforms that inhabit it have inherent value and are interwoven, and therefore our work acknowledges the rights of land and ecosystems and calls us to consider deeply the impact of human land use and business decisions on human and more-than-human life. We oppose colonization, exploitation, and extraction from land.
- AGROECOLOGICAL and REGENERATIVE FARMING, FORESTRY, and LAND PRACTICES. Agrarian Commons apply ecology to farms and food systems, using a holistic approach that links ecology, socioeconomics, and local culture to deepen environmental, human, and community health. Simply, Agrarian Commons and Agrarian Land Trust facilitate farming practices that leave the whole farm ecosystem healthier year-to-year.
- PROTECTED in PERPETUITY. Agricultural land should be protected in perpetuity, taken out of the commodity market, and farmed using sustainable methods that preserve the public trust and protect ecological integrity. Farmers must be able to invest in the health of the land, protect vulnerable areas, and improve wildlife areas, habitat, and water quality.
- MOVEMENT BUILDING. Agrarian Commons and Agrarian Land Trust facilitate public awareness and engagement in allied movements for equitable land access and land care worldwide.
- AGRARIAN COMMUNITY. An agrarian community is all the many different kinds of people, organizations, and businesses that enable farms and food systems to exist. For example, farmers, truck drivers, retailers, tractor supply companies, seed and seedling companies, financial lenders, chefs, and consumers, are all necessary parts of a successful and thriving agrarian community. We understand that farms support—and are supported by–many hands. Race, ethnicity, gender, age, and experience of our farmers and board members, as well as diversity of farming types and sizes, are among the many forms of diversity we seek to uplift and support for healthy and diversified agrarian communities around the country.
VISION AND PRIORITIES
Agrarian Trust protects farmland for sustainable agriculture and preserves its affordability for new and disadvantaged farmers. The Trust buys farmland and accepts donations or charitable discounted sales of land, real estate, and property. The Trust will transfer land and real estate to an Agrarian Commons that is local, allowing greater flexibility in land leasing and direct participation and determination by closely connected stakeholders.
The purpose of the Commons is to own and preserve ecologically significant agricultural land and associated agrarian real estate and assets for disenfranchised people, furthering the Trust’s mission of supporting land access for next generation farmers. The Commons permanently protects farmland in communities across the country. The Commons further conveys 99-year lease tenure and equity interest to farmers, shares in ecological stewardship investment, and supports farm viability and local agrarian economies.
Agrarian Trust and [REGION] Agrarian Commons will identify, evaluate, and support land, real estate, and/or property opportunities for acquisition, investment, management, and stewardship. Agrarian Trust will raise capital to purchase land and to support the early stages of [REGION] Agrarian Commons operations, and may also raise capital to invest back into the earth, toward farm viability, and to support community wealth.
The Trust may retain a perpetual conservation easement, an Option to Reacquire, and/or a right of first refusal on land and real estate transferred to the [REGION] Agrarian Commons, providing a layer of protection to ensure Agrarian Trust mission goals.
AGRARIAN COMMONS DUTIES
The Agrarian Commons shall own agricultural land and assets and levy and collect rent and lease revenue from land, real estate, and property tenure agreements. The Commons will commit its financial and human resources and community capital to ensure proper support, investment, stewardship, and management of land, soils, ecosystems, buildings, infrastructure, housing, and other agrarian property assets. The Agrarian Commons Bylaws allow for the Commons BOD to engage employees, officers or agents to take over the day-to-day activities once the Commons is sufficiently capitalized and in a position to do so.
The Commons shall engage and collaborate with Agrarian Trust to raise philanthropic and investment capital. The Commons shall engage community and network capital and will participate and support outreach, engagement, and communications efforts and activities.
At the time of property acquisition, the Commons shall fund a Baseline Report, environmental Phase I testing, Title Report, title insurance, and other due diligence needed as part of property acquisition prior to transferring the land into the Commons. The Baseline Report for each property shall serve as a comprehensive assessment of all assets acquired into the Commons. Once in possession of the land, the Commons is obligated to conduct yearly monitoring and reporting of all land, real estate, and property and provide a Monitoring Report to the Trust. The Commons, and leaseholders of each property, are committed to and responsible for maintaining the whole property beyond “normal wear and tear” throughout the term of the lease and based on the Baseline Report(s). The Commons must also submit property deed, survey, lease, the execution of conservation easement(s), farm practice certification, farm/ranch management plan, forest management plan, soil testing, and other related Transaction Documents and property management documentation to Agrarian Trust. All Commons are required to comply with The Trust’s capital building and grounds plan; however, each budget plan will vary for each [REGION] Commons property.
The [REGION] Commons shall report to and exchange with the Trust, and shall comply with requirements set forth by the Trust, IRS regulations, and State specific legal, financial, and reporting requirements. Commons roles and responsibilities will be guided by and shall adhere to structure and language requirements set forth by Agrarian Trust, including standards set forth for each Commons and in the Property Management Plan for each property.
AGRARIAN TRUST DUTIES
Agrarian Trust shall oversee, guide, and support multiple local Commons, as they are structured as affiliated land-holding entities. The Trust shall provide legal and financial support, including raising and organizing human, network, philanthropic, and investment capital. The Trust will commit its financial and human resources and capital to ensure (1) acquisition, (2) investment in, and (3) stewardship and management of land, buildings, infrastructure, housing, and other agrarian property assets to the standards set forth in the Property Management Plan and in ways to align with and further Agrarian Trust mission. Agrarian Trust may also raise capital for investments in soils, renewable energy, housing, and farm viability.
The Trust shall receive charitable contributions of capital and the Trust shall use capital to acquire and invest in land, property, and agrarian assets. The Trust shall convey land, property, and agrarian assets to the local Commons, subject to, at a minimum, an Option to Reacquire. The Trust shall convey property deed, survey, lease, the execution of conservation easement(s), farm practice certification, farm/ranch management plan, forest management plan, soil testing, and other related Transaction Documents and property management documentation at the time of conveying land, property, and/or other assets.
Agrarian Trust shall guide and support multiple Agrarian Commons across the US that are established and operated at a local level, as they are structured as affiliated land-holding entities. [REGION] Agrarian Commons is one such Commons. The Trust shall provide legal and financial support, including raising and organizing human, network, philanthropic and investment financial, and land capital. The Trust will commit its financial and human resources and capital to ensure (1) acquisition, (2) investment in, and (3) stewardship and management of land, buildings, infrastructure, housing, and other agrarian property assets to the standards set forth in the Property Management Plan, in the Ecological Stewardship and Farm and Ranch Standards, and in ways to align with and further Agrarian Trust’s mission. Specifically, The Trust shall designate a portion of the financial capital raised for each [REGION] property transaction, including for long term stewardship and endowment for property and for [REGION] Agrarian Commons operations. Additionally the Trust shall raise financial, human, and network capital to be used as start-up operating funds for each Agrarian Commons. After the initial years of operation, The Trust’s goal is for each Commons to become financially independent of the parent organization as each Commons takes ownership of land and property capital, with the understanding that farm and ranch projects will vary in scope, circumstances, and quantity, and that these factors direct the growth of each Commons . Agrarian Trust may also raise capital for investments in soils and ecosystem, renewable energy, housing, farm viability, and community engagement.
The Trust shall receive charitable contributions of capital and shall use capital to acquire and invest in land, property, and agrarian assets. The Trust shall convey land, property, and agrarian assets to the Commons, subject to, at a minimum, an Option to Reacquire. The Trust shall convey property deed, survey, lease, the execution of conservation easement(s), farm practice certification, farm/ranch management plan, forest management plan, soil testing, and other related Transaction Documents and property management documentation at the time of conveying land, property, and/or other assets.
Should Agrarian Commons fail to comply with the reporting or other requirements set forth by the Trust, IRS regulations, or the State, after receiving written notice from the Trust, the Commons shall have a 365 day cure period. Should the Commons fail to cure the default described in the notice, the Trust may determine that the Commons has abandoned the property. In that instance, the Trust may remedy the abandonment through such actions as deemed necessary by the Trust, including exercising its Option to Reacquire.
The Trust, the Commons, and leaseholders shall jointly carry out ecological stewardship that includes soil regeneration and diverse ecosystems management for sustainable food production and wildlife habitat management. All stewardship practices shall be guided by Ecological Stewardship and Farm and Ranch Standards and shall be chemical-free, sustainable, diversified, and rotation-based.
No commercial resource extraction (e.g., mineral, timber, soil, water, and/or natural resource extraction) is allowed on any property unless to facilitate a Commons based sustainable management plan that is approved by the Commons and is of benefit to agricultural sustainability and soil and ecological restoration, regeneration, and health of people and earth. De minimus impacts are allowed without Commons approval. Impermanent or moveable construction that does not require a building permit, is allowed without Commons approval.
The Trust and the Commons hereby agree that, in the event of any dispute between the Trust and the Commons relating to this Understanding, The Trust and The Commons shall first seek to resolve the dispute through informal discussions. In the event any dispute cannot be resolved through informal discussions within ninety (90) calendar days, after being brought by a party to the attention of the other party, the Trust and the Commons agree that the dispute will be negotiated between the Trust and the Commons through mediation, if the parties can agree on a mediator. The costs of mediation shall be shared equally by the Trust and the Commons. Neither the Trust nor the Commons waives its legal rights to adjudicate this Understanding in a legal forum. Any criminal act is an exception to this clause.
NO FAULT and NEGLIGENCE
Each party shall be completely released from all liability, claims, debts, and/or obligations to the other party, including all claims for incidental, special, or consequential damages. Neither the Trust nor the Commons acknowledges any fault or liability with respect to any claim or contention in connection with either the Trust’s or the Common’s performance. The Commons, the Trust, and any lessees agree to release, indemnify, and hold each other harmless, except in cases of gross negligence or willful misconduct.
The Commons is obligated to maintain lease agreements and ownership responsibilities so as not to allow or create waste–voluntary or permissive (the Equitable Lease will continue as a collaboration between parties and will provide more details). If the Trust determines that the Commons is responsible for waste, the Trust may exercise the Option to Reacquire.
LIABILITY & INSURANCE
Lessee to Agrarian Commons
Please see Equitable Lease as to liability and insurance requirements.
Agrarian Commons to Agrarian Trust
The Commons shall carry property and liability insurance policies to cover all property and lands. Boards of Directors of Commons shall obtain directors and officers insurance. If some parcels of land or housing are not under a lease and/or in Commons ownership, the Commons must secure and maintain liability insurance for these properties until a new lessee is in place. The Commons shall pay and keep current on property tax, fees, and assessments during this transition period. The Commons shall pay and keep current and active accounts with basic utilities (e.g. water, electric, sewer).
IRS REQUIREMENTS OF 501(c)(3) and 501(c)(2) or 501(c)(25)
Agrarian Trust is responsible for: (1) ensuring that the Commons continue to qualify for tax- exemption; (2) verifying that any new Commons are exempt; and (3) updating the IRS on an annual basis of new Commons, the Commons no longer to be included in the Agrarian Trust group exemption letter, and Commons that have changed their names or addresses. Annual updates from Agrarian Trust to the IRS must include information about changes in purposes, character, or method of operation of the Commons included in the group exemption letter.
The Trust has the option of filing a group 990 tax return that covers the Commons, to include aggregated data from all the Commons. However, each Commons must agree to be included in the group return, and not file its own return. If a Commons chooses not to file as part of a group 990 tax return, it will be responsible for filing its own 990 tax return each year and to provide a copy to the Trust.
ADDITIONAL LAND, REAL ESTATE, and/or PROPERTY
After the Trust and the Commons execute this instrument, any and all future land, property, and/or real estate assets acquired as a part of the [REGION] Commons will be obligated to adhere to the terms of this Understanding. For example, if a Commons’ land is leased from a federal agency or another land trust, the land involved in the transaction shall conform to the terms of this Understanding. All terms of this Understanding shall be considered retroactive.
AGRARIAN COMMONS TO AGRARIAN COMMONS
Collaboration between the [REGION] Commons with other established Commons across the United States is essential to ensure long-term vitality and sustainability. Collaboration may include resource sharing, movement and awareness building, collective learning, collective marketing, and general solidarity-based networking.
APPENDIX may include the following documents, specific to each Agrarian Commons’ land, real estate, and/or property:
Attachment A – Property Management Plans
Attachment B – Baseline Reports and Monitoring Report
Attachment C – Equitable Lease
Attachment D – Option to Reacquire
Attachment E – Ecological Stewardship and Farm and Ranch Standards
Attachment F – Commons Bylaws