What You Should Know When Buying Farm Land With a Crop Lease in Place

The terms of a farm lease are flexible.

You're considering making an offer on a piece of agricultural ground but the seller informs you that the acreage is under lease to a farmer. Before you enter a contract to buy, find out a little more about the terms of that lease.

Duration

A crop lease agreement is legally binding, and the contract will stipulate how long the farmer may continue to lease the land before he must relinquish his rights.

Parties

The landowner is the landlord and the farmer who is leasing the land is the renter, or the producer.

Financial

If you purchase the land, the annual fee the farmer pays to the landlord then belongs to you. But if a county farm bureau controls the agreement, you may be liable for purchasing a portion of the seeds, herbicides and fertilizers for the crop; in return, you will receive a portion of the harvest.

Terms

Some cropland leases are automatically renewable, and the farmer's right to continue to farm the ground will carry on unless you follow the steps in the lease contract to it.

Pros and Cons

If you want to grow your own crop, you may have to wait a year or two until the crop lease expires. But you may find that the annual fees the farmer pays you are more to your liking than growing your own crops.

References

• University of Missouri: Extension, Farm Lease Agreements
• Corn and Soybean Digest: Flexible Lease Agreements