State-Specific Leasing Issues

1. Allowed Number of Years
2. Acceptable Agricultural Practices
3. Agritourism
4. Protection for Tenants with Crops in the Ground
5. Lease Termination Notice Rules
6. Tenant Rights Upon Sale of Leased Property
7. Requirements for a Valid Farm Lease
8. Recording Requirements
9. Property Tax Exemptions
10. Water Issues
11. Other State-Specific Issues
12. How an Attorney Can Help
13. Additional Resources

Laws related to agricultural leases vary in each state, and state leasing laws can significantly impact your farming operation.  As a result, it is extremely important to speak to a lawyer who understands farm leasing in your state both during lease negotiations and before you sign a lease.

This page is designed to give you an overview of the categories of legal leasing-related issues that tend to differ from state to state. You can use this page to help you identify lease provisions that you should double-check with a lawyer.

Note that this list is not exhaustive, and your state may have additional legal particularities that could impact your farm operation.

Some states have maximum term lengths for agricultural leases. California Civil Code Section 717 provides that no lease for agricultural purposes can be for longer than 51 years. Section 24 of the Iowa State Constitution’s Bill of Rights limits agricultural leases to no longer than 20 years, and Section 15 of Minnesota’s Bill of Rights limits agricultural leases to no longer than 21 years. Some states, like New York, do not set any maximum length on written farmland leases.

Bottom line: If your lease is longer than the allowed number of years in your state, you might not be able to rely on your ability to stay on the land until the end of the lease. Check whether your state has a limit on lease length for farm leases.

Some states have passed laws or rules generally called “acceptable agricultural practices.” These rules can be either mandatory or voluntary. For example, Vermont’s Agency of Agriculture, Food, and Markets has issued mandatory regulations farmers must follow that are an attempt, in the agency’s words, “to conserve and protect natural resources … Accepted Agricultural Practices are basic practices that all farm operators must follow as a part of their normal operations.”

Bottom line: Before signing a lease, it’s important to know whether the state in which you are farming has acceptable agricultural practices rules, whether these rules are mandatory or voluntary, what the rules require, whether your intended operation can comply with these rules, and what happens if acceptable agricultural practices rules are violated. The landowner and farmer should understand and agree to these rules.

Many states have enacted laws governing agritourism, which can be defined in different ways. For example, Colorado’s law governing agritourism defines it as an activity related to the “normal course of agriculture” engaged in by participants for recreational or educational purposes. Section 13-21-121 of Colorado’s Revised Statutes limits the farmer and/or landowner’s legal liability if accidents happen on the farm to people participating in agritourism-type of activities, if there have been adequate warnings posted of the dangers of participating. Similarly, in Minnesota, state law provides a liability exemption for farmers who require visitors to their farm to sign liability waivers with specific language, and who post specific warnings. Many states have enacted variations of this type of law, but the details differ from state to state.

Bottom line: Your farm could benefit from state law liability exemptions if you follow certain specific practices related to agritourism (requiring liability waivers or posting warnings, for example). Finding out about these rules and following them could mean that your farm would spend less money on attorney fees and/or settlement payouts if a visitor is injured on your farm and sues you (tenants and landlords are often sued at the same time by plaintiffs’ attorneys).

Some states protect farming tenants who have crops in the ground when their lease is terminated. For example, Minnesota law provides that planted and growing crops are the farmer’s personal property, and if the lease terminates prior to harvest, the farmer may have the right to remove those crops (Minnesota Statutes 557.10, 559.114).

Other states also provide that the farmer-tenant has the right to cultivate and harvest crops sown prior to a notice of termination from the landowner-landlord. (See Oregon, 91.230; Montana, 70-26-206; Georgia, 44-7-8; Virgin Islands, VIC-792, Alaska, 09.45.140; Alabama, 35-9.2, for example. This is sometimes known as the doctrine of emblements.)

However, each state is different regarding the requirements for this rule protecting tenants to be implemented, so you should check with a lawyer if you find yourself in this situation. Additionally, to ensure protection in this situation, you can put language in your lease stating that crops in the ground are tenant property and that set forth a procedure for allowing the tenant to harvest the crops or to be paid for the value of the lost harvest.

Bottom line: If your lease is terminated with crops in the ground, the tenant may have some protections. These protections can also be added directly into a lease.

Some states have enacted laws that govern how a farm lease can be terminated. Termination rules can differ depending on whether the lease is a year-to-year lease, whether it is oral or written, and in some states, depending on the amount of acreage that is leased. In Iowa, a strict procedure must be followed even if the written lease provides for a certain date of termination (Iowa, 562.5-562.7).

Bottom line: Lease termination is a big deal with serious consequences for tenant farm operations and landlord income streams. State law on termination can affect whether and how long you can stay on leased land, or whether tenants can stop paying rent to a landlord.

State law may govern the rights a tenant has if the landlord sells (or otherwise transfers) the leased farmland during the lease term. (Federal law could apply too, if the landlord declares bankruptcy.) It is always important to include a provision in the lease that states that you can continue to farm under the lease even if the land is transferred.

Bottom line: Tenants should make sure they can stay on their rented land until the end of the lease, even if the landlord sells the land. It’s best to put this in the lease itself, but state law might protect tenants in this situation.

Your state may have particular basic requirements for what a valid farmland lease should include, and if those requirements are not met, the landowner might be able to challenge its validity and terminate your lease. A common requirement is that a lease be in writing (instead of a “handshake deal” with nothing in writing).

Written leases do not have to be formal, but a lease should generally contain at least the following basic terms in order to be legally enforceable:

• Landlord and tenant names
• Description of the land to be rented
• Rent amount ($)
• Signatures of both the landlord and tenant

Iowa, Indiana, and Missouri have various types of recording requirements for farmland leases of different durations. Recording requirements mean that you have to take the written lease to be formally filed (recorded) with a local government office (often the county clerk’s office). Failure to follow recording rules can result in a lease that is unenforceable.

Bottom line: If your state has recording requirements and you don’t follow them, you cannot depend on your lease.

Almost every state exempts or reduces property taxes for land that is being used for agricultural purposes. This is often done through programs called Differential Assessment or Current Use programs. This is an important incentive for non-farming landowners to lease to tenant farmers. The Property Tax Savings page in this toolkit has a map linking to each state and its agriculture-related tax rules.

Especially if you live an arid region of the country, an area that experiences drought, or an area that has minimal water access, it is very important to address water use and availability in your lease. The scope and specificity of water laws vary greatly from state to state, and can seriously impact your operation – especially in drought years or in cases of water contamination (in a flooding or hurricane situation, for example).

Each state has its own set of laws and regulations governing agricultural and other uses of surface water and groundwater in the state. The law surrounding the use of water is constantly evolving and very complex. Considering the importance of clean water to every farm operation, farmers should seek guidance about state water laws related to agricultural operations.

Your state may have enacted other types of laws that can impact your farming activities and your lease. It’s best to talk to a lawyer experienced in agricultural leasing in your state before signing a farm lease.

Additional Resources

See the Leasing Resources page.