Under Iowa law, an agricultural tenant has the right to remove stems (stems, leaves, spikes) left in a field after harvest, unless otherwise provided in the lease. Stover can be used as feed or litter or sold from the farm. Tenants and landowners can specify a different agreement in a written lease or limit the amount of stover removed. See PM 3053A, Issues with Stover Removal on Rented Land for more information. Determining the duration of the lease Many agricultural leases are only valid for one year at a time. In fact, in Iowa, oral leases cannot be valid for more than a year. However, a recent survey found that 41 per cent of spot leases and 68 per cent of crop-sharing agreements between the same parties had been in place for more than 10 years. The maximum fixed term of a lease in Iowa is 20 years, but leases can be regularly renewed if both parties agree. Harvesting How are the costs of combining, drying, transporting and storing crops shared under a shared-share lease? If the corn drying equipment is part of the rental unit, the landlord often provides the dryer and storage facilities. If the corn drying unit is portable, it may be jointly owned, or either party may own it and charge the other party a specified amount for its use. Fuel and electricity costs for drying are usually divided in the same proportion as harvesting. In some cases, the tenant is paid extra to deliver the owner`s share of the farm warehouse crop to a lift or processor. This section deals with the beginning and end of the lease and the amount of lease payments.
You can define how you want to receive payments, when they are due, and what happens if the tenant pays late (or doesn`t pay). They can also determine what will happen if they do not leave at the agreed time. It includes the ability to exclude customers from subletting. Many factors influence the terms of a single farm lease. Multi-year leases provide an incentive for owners and operators to invest in long-term land improvements and maintain soil fertility and conservation structures. They also avoid the uncertainty of frequently establishing new relationships. To determine whether a lease is fair and equitable to both parties, it is necessary to examine the lease as a whole, rather than simply looking at the individual terms or sections of the lease. One provision of the lease may be favourable to one party, while another provision may be more favourable to the other party and the two factors may balance each other. Several federal and state laws affect rental conditions. Such legal considerations promote business efficiency, ensure that rental terms are implemented as intended, and protect the interests of each party. It is important to consult professional legal counsel for legal advice and deliberations. Utilities and ServicesThis provision requires the tenant to pay for all utilities or services related to its operation.
This includes expenses related to growing plants to restore the land as it was at the beginning of the lease. Although utilities are usually included, you should have detailed discussions about water rights and use. This section explains when the payment(s) is due and what the amount of the payment(s) will be. Details can be added as needed. If the contract is a flexible lease or some form of crop sharing agreement, details should be defined and stated here about what each party is responsible for and/or the factors that trigger changes from the base lease. If the owner requires a deposit for possible repair of the damage, it should be included in this section. Fixed cash lease In a fixed cash lease, the tenant pays a certain amount of cash rent per acre per year for the use of agricultural resources. The owner may establish certain restrictions on which plants can be grown or on tillage, conservation and pest management practices that can be used. Apart from that, the tenant has a free hand in planning the agricultural and livestock production program on the farm unit and receives all harvest and related goods payments from the USDA. A lease is automatically continued from year to year, unless one of the parties terminates a separate written notice of the lease agreement. In Iowa, a notice period for the lease must be properly delivered in writing before September 1 before the end of the rental year.
This applies to both rent-in and crop-sharing leases, but not tailor-made farming agreements. In a written lease agreement, a date prior to September 1 may be specified for the delivery of a notice of termination. The requirement to terminate a farm lease by September 1 does not apply to areas of less than 40 acres (in Iowa) that are primarily used for animal feed. But even an oral lease is automatically extended if it is not properly terminated in time. The distinguishing feature of a crop sharing lease is that the owner receives a share of the harvest and payments from the USDA in exchange for the land resources used. In Iowa, a typical division for corn and soybeans is that the owner receives half the grain. A variant is a lease of 50 to 50 harvest shares with a small cash payment to offset some of the seed technology costs or reduce tillage. In other areas where the value of agricultural land is lower, the owner is only allowed to receive 25 or 30 percent of the crop.
The owner`s share in a hay harvest varies depending on the distribution of the cost of planting seedlings. In some cases, the tenant pays cash rent for pasture or hay land. There may be separate rental fees for a good set of buildings or grain stores. Owner privileges In Iowa, there is a legal owner privilege (created by state law). The privilege applies whether it is a cash rent, a flexible rent or a harvest share. The legal lien is a lien “over all crops grown in the leased premises and over all other personal effects of the tenant that have been used or retained for the duration and that are not exempt from performance” and gives the landowner priority over other security rights such as those of lenders. Conservation programs can provide short-term payments for adherence to certain practices, as well as long-term benefits in the form of reduced erosion, increased fertility, and cleaner water. If the incentive payments do not fully offset the tenant`s additional costs or reduced income for adhering to maintenance practices, the tenant may be reluctant to participate […].