“In general, a good lease is one in which both parties agree it is fair and both completely understand each other’s expectations,” says Wesley Tucker, University of Missouri Extension ag business specialist.
According to Tucker, most problems with a pasture lease occur when one or more parties don’t fully understand what the other expected. Whether the lease is verbal or in writing, Tucker says taking the time to discuss issues ahead of time will prevent 99% of the problems that will arise later.
But, Tucker adds, “Writing out a lease forces you to consider what may seem like minor details now, but can become explosive issues later – things such as who’s responsible for fence repair, will the pastures be mowed, who has the right to enter the property, or can the tenant sublease the property.”
Moreover, Tucker explains verbal leases of more than one year are usually considered invalid and unenforceable. Although verbal leases are binding on heirs, enforcing them can create many other problems.
“Having the lease written out is probably the best thing to do in most all cases,” Tucker says.
As a minimum, Tucker says the minimum requirements of a written lease should include the names of both parties, legal description of the property, duration of the lease, rental rate and payment arrangements, and signatures of both parties. Other items he suggests considering include:
- Landowner entry rights. Unless agreed upon in the lease, the landowner doesn’t have the right to enter the property.
- Subleasing. If the lease doesn’t disallow subleasing of the property, then the tenant can sublease for the same original purpose without the landlord’s permission.
- Fence repair and soil fertility. Agreeing on who’s responsible for fences and who pays for materials ahead of time will ensure that fences are maintained and kept in working order.
Other special agreements include the use of buildings, how often pastures should be clipped, noxious weed control and any special restrictions either party desires.
“It is in both the landlord and tenant’s best interest to carefully consider all details of a lease ahead of time to prevent future disagreements. A written lease is a good way to force everyone to consider the details. Plus, it creates an incentive for both parties to structure the lease so it is beneficial to both,” Tucker says.
You can find a fill-in-the-blank pasture lease to use directly or as a guide to creating your own at www.mwps.org/stores/mwps/files/Free/ncr_109.pdf.