How to best dissolve business relationships between farm and property owners

Timing and paperwork are important factors for both sides to consider.

Posted on Aug. 8, 2014 at 11:55 a.m.

Neil Sedaka had a famous song back in 1975 titled “Breaking Up is Hard to Do.” I think of that song sometimes when farmers or property owners call seeking advice about dissolving their business relationship.

Leasing farmland is a part of agriculture that has somehow avoided the paperwork shuffle many aspects of the business have taken on as farms have become larger. It is still common to cement a deal for $50,000 or more on just a simple handshake. Sometimes, this is just beyond my understanding.

Many of the requests for leasing advice occur in the spring, right around planting time. Technically, neither a landlord nor tenant needs to accept changes to a lease if they are occurring after Feb. 28, Indiana’s expiration date for oral contracts if no other date has been agreed upon. The courts have said notification that a party wants out of a lease must be given at least 90 days before that date.

In modern agriculture, notification to quit a lease by Dec. 1 does not make much sense. Many farmers apply fertilizer, lime and herbicides after harvest is complete. Manure is spread in the fall, fields are plowed and chiseled, and soil samples pulled for the upcoming crop needs.

A notice to quit is more practical if given in August or early September. While it still may not be a comfortable thing to do, it is still better than the hard feelings generated when a notice is given after a lot of preparation has been completed for next year’s crop.

And, like a lease itself, it is a good idea to deliver that notice in writing. It is very hard to dispute a written notification, especially if a return receipt is requested.

If you are looking for more information about farmland leases, check out www.agecon.purdue.edu/extension/pubs/. By clicking on Farmland Leasing Resources, you will find example leases, and other useful information.

Jeff Burbrink is an Extension educator in agriculture and natural resources. Write to him at 17746 E. C.R. 34, Goshen, IN 46528; call 533-0554; or fax 533-0254.

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