Episode 44: Farmland Leasing 101

Hi everyone, welcome to the Farm Commons podcast, where we explore timely and important legal issues and questions facing the farming community today. For community-based farms with a focus on sustainability, managing legal risks is especially important, as many innovative farm enterprises like community-supported agriculture programs, on farm suppers and gardening classes, and unique arrangements for land access and employment do not fit nearly into our legal system, leading to vulnerability. But through legal education, we can cultivate greater resilience for your farm business, so that you can continue to grow in ways that best support you, your relationships, and your community. The Farm Commons will show you why and how.

Thanks for tuning in. Hi everyone, welcome back to the Farm Commons podcast. My name is Eva and I'll be your host for the show. I'm joined by Sarah, our staff attorney for Corisillians, and today we're going to dive into what you need to know when navigating the process of getting a farm lease in writing.

This is a very exciting topic, right Sarah? Oh, hi Eva, it is a exciting, yes, I would say it's a very exciting topic in terms of it's exciting to think about starting your new farm, but I would say words that come to mind for me are more like daunting and scary and a little bit tedious too. People don't like to think about having to write a lease or figure out what's in the lease or even talk to their landlord about the lease and what they need. It can be scary, but of course I am not a farmer myself.

I have never had a farm lease, but Eva, you are a farmer, have had a farm and have had experience leasing farmland, is that right? Yeah, yeah, for three years leasing farm lands to operate a farm business in the past. I was very excited to get on the land and start my farm, heart strong farm in North Carolina, and at the same time the leasing process was definitely daunting as an appropriate word, just looking at the written lease and feeling really good about the terms, but then when issues came up and some of the terms were kind of squishy and I was unsure as to how to relate to the landlord about things like repairs and maintenance and sometimes it was an annual lease and at the end of my first year leasing, I had assumed the same agreement would stand for the following year and when we had gotten into the next year, so January, the landlord had shared with me a bunch of updated terms to the lease, even though technically our lease had already started and if y'all are already confused, we will get into these details here in a minute and it was just kind of, it was a big question mark to figure out like do I try to renegotiate the lease because I'm already on the land and I'm here for another year and yeah, there can be a lot involved including negotiation, but also clear communication, lease can be a great tool for navigating conversations between tenant and landlord and I've been grateful to have my lease and I've been very ungrateful to have a lease that I had and yeah, it's a fine balance between sewing, confidence and resources and joy into a new farm and ever on land that is being leased and then also navigating the paperwork process that at its very base level is about the relationship between the farmer, the landlord and the land. Yeah, yeah, to live there.

There's a lot there. Well, okay, well, if there's a lot there, so let's get into it, Sarah and start at ground zero here. So for all our listeners, maybe some of y'all are beginning farmers and you're about to lease some land or maybe some of you are already in on land and maybe you're wondering like, do I have a lease, you know, what's going on here? Or maybe you're a farmland owner and you're planning on leasing your property to others so that they can start a farm business.

So the big question here is what is a lease and it's an important question because some folks assume that a lease is a written document, which it absolutely can be, but not always. Totally. Yeah, I mean, at its very basic level, a lease is really just a grant of authority to use land. So admittedly, leasing is not a very secure form of land use because the landlord or land owner always sort of has the upper hand, you know, the landlord has the whole entire bundle of property rights.

And when I say this, I can totally hear my property law professor John Nolan speaking, but it's true, the owner can sell the land, possess it, make productive use of it and get profits from it, and they can lease it, which is carving out some of these rights for the tenant who can then make productive use of the land themselves. So the lowly tenants then has whatever rights the land owner has granted to the tenants. But again, it's subordinate to the land owner who at the very end of the day can just terminate the lease and take back that grant of authority. Sure, it is supposed to be done legally.

And if the landlord doesn't follow the law, the tenant has some rights to address the harm, but ultimately the landlord is inherently more powerful. But under the right circumstances and with right tools, leasing can actually be a very good option for the beginning farmer. So it allows a new farmer to try out farming without a huge, expensive, scary long term commitment. No mortgage, no threat of foreclosure, no pressure to have to fix the roof on the barn or pay for the new sewer line.

Nope, that's the landlord's responsibility. As the tenant, your responsibilities are much lighter and fewer and that can actually be a great relief. Yeah, absolutely. And thanks there for breaking down the legal concept of leasing, including what at least does generally and then also some of the pitfalls.

And now that we know what at least does generally speaking, I know that it can be really confusing for people to try and pin down what at least is. And I mean, that's in a very like practical physical sense. So some producers might think at least is a special form that only an attorney can drop. So that includes certain magical components for it to be valid that only an attorney knows what those are and where they are and how they can be rendered into a legal document.

So can you please provide us with insights into this preconceived notion? So essentially the question is, you know, what is the basis for this belief and what does the reality actually look like? Yeah, great questions, Eva. This can be very confusing for folks indeed.

The truth is there is no special magical form that must be stamped with the court seal. It doesn't have to be a 30 page document drawn up by a lawyer and notarized and recorded with the county's public records. No, it can actually just be scribbles on a napkin from the local pub. And that's about at least if you're not completely astonished then, let me just add this.

It doesn't even have to be written down. You can enter into a lease agreement with anyone at any time over a handshake over a beer, whatever. No one needs to sign anything. Actually, no money needs to even ever change hands.

You know, I suppose if you really take it far, no one ever even needs to speak. I mean, this is a kind of a crazy fact pattern here, but I say this just to get the point across. Say, I land on her Lucy, open my gates and point to your sheep and you, Farmer Frida, put your sheep on my land to graze and I give you the thumbs up and come out there and I might pet your sheep from time to time, maybe fix the fence so the sheep don't get out. That to me appears there's some kind of agreement, some meeting of the mines that it's okay for you, Frida, to use my land and this in its most basic sense is a lease.

Yeah, that's an important phrase you use there, the meeting of the mines. Can you tell us more about that phrase and what it's about legally speaking? Sure. Yeah, I mean, a lease is a contract and it is a contract to use another person's land, specifically and the basic elements of the contract.

And going back now to my Law School days long ago, these are offer acceptance and consideration. So all together, these elements create a clear picture that there was a meeting of the mines. So let's talk about this offer part in the kind of weird example that I just gave. So Landowner Lucy pointed to Farmer Frida sheep and opened her gate.

This could be interpreted as an offer, not a very clear offer. For example, we don't know for how long she could do this or why she's offering or anything else, but still, it appears to be an offer. Then Farmer Frida brought her sheep right over and accepted it looks like it. Now what about this consideration piece?

So that's a little trickier. This can be real slippery for sure. The legal definition of consideration is based on the concept of a bargain for exchange. This means that both people involved are getting something that they've agreed to, which is usually something of value for something of value.

So here, it is unclear for my example if Farmer Frida is paying Landowner Lucy anything. If she is, obviously there would be consideration. But maybe she's paying in wool or lamb stew. In those scenarios, there's consideration present too.

But what if there's no money? No wool, lamb stew, nothing that seems obviously to have a monetary value. What if Lucy is doing this because she just likes Frida? She wants her to be happy and support her business.

Well, friendship and charity are both inherently valuable things too. So they're very well, may still be consideration in those cases too. Again, if there is this meeting of the mines, if an outsider could look at the situation and see that Frida and Lucy had an agreement, then a lease contract is valid. But we really got into the weeds there.

So let's try to reserve this a bit. So I say all this not to get all legal, scholarly and esoteric, but just to illustrate the point that Elise can take many, many forms. And as long as the basic, the basic contract elements are there, it is a valid legitimate deal. That doesn't mean that it's a great option to write your lease on an napkin or holler across your fence that, hey, you can use my land.

And that's enough. Writing a lease down on an actual piece of paper with both parties signing and dating the lease and also spelling out things like payment terms and the length of the lease and the rights and responsibilities of both parties. This is really important for several reasons. And here they are.

So when you write things down, you tend to remember things. Also committing your commitment to paper tends to make you really think through the hard things and all the details that can just get lost and muddled when we just talk about things or think about things. Also, when you write things down and sign your name to your commitments, you tend to take them more seriously. These are all very important reasons and can lead to greater communication, trust and follow through.

Yet there's another reason still enforcement. All of these other reasons I just mentioned are about preventing bad things. And that's the realm where Farm Commons prefers to operate, right, Eva? We like preventing the bad stuff in hopes that the farmers we work with operate into.

So those reasons are all about facilitating communication and creating really good, strong relationships with open communication. But even with the best of intentions, relationships, as we know, can break down well due to life and as many variables. So in that case, you may well be in a situation where you need to prove that the lease exists and prove that certain things were promised in that lease. And this is very hard to do when there's no real lease.

Not only is it hard to do, but I'm about ready to get all legalistic and esoteric here again, Eva. So stop me if this goes too wild. Okay. Okay.

Okay. So here is this really wonky legal topic called the statute of frauds. I know it sounds all exotic, but what it really means is when it comes to contracts regarding land, only those contracts that are written down will be enforced. Now, I know I just got into this whole thing about, you know, hey, a verbal lease is just fine.

You know, well, it is. It's totally fine. If you never have to go to court and argue about the lease and the terms of it and whether it's valid, that's perfectly acceptable. But if you do end up in court over a lease dispute, the judge is going to sit there and look at you squarely in the eye and say, listen here, Mr.

plaintiff tenant, there's no written lease. But I listened to you and to the landlord defendant. And it appears that there were all of the elements of the contract, you know, the meeting of the mind, the offer, the acceptance is consideration. But according to the statute of frauds, all I can do is say this lease, while valid, only existed for one year.

So that's right. That's the trick about this statute of frauds. It doesn't throw out all non written leases, but it does usually carve out an exception and says, you know, we just really don't like non written leases, but we understand that it's important to throw the tenant a bone here. So we'll offer something and say, okay, you can have a year, but no more.

Now every state has their own version of this statute of frauds, but typically it's about a year. So just know that the principal still stands that lease is a valid lease, even if it's a verbal agreement or on the back of the napkin. But also know that any lease that's not in writing or any terms that are left out on that nap and lease are not going to be enforceable in court. So as far as the enforcement reason goes, if you want to be able to enforce the lease in all of its terms, make sure that you have that lease in writing and that you have all of those terms that are important to you in writing in that lease too.

Yeah, absolutely. Thanks for that, Rhondam Sarah. And for all you listeners, now that you have a good sense of why you really are in a more legally resilient position when you write the lease down, so that's not limited to just one year, let's move on to what should the farm lease include? So if you are struggling to get a handle on that, we actually have a really great resource for you on our website, which has a list of all of the questions that you should address when creating a lease.

And ultimately, the answers to these questions are going to be the terms that you should include in your lease. So this resource, which is called Checklist of Questions for Farmer and Land Owners to Ask, really does serve a double role in that it helps you talk about what you need to talk about. Talk about all the things to talk about to create a good lease. And it helps you actually write the lease down as you work through that checklist.

So talk about lease term, how long is the lease and then improvements? Who's responsible for those and what kinds of improvements are certain parties responsible for? And as you talk through each of those questions and come to an agreement, you're actually creating the lease itself, which is pretty powerful. So the questions in our resource are divided into eight sections and we'll get into the details on each, but for now, those eight sections are the basic info like the parties and rent, then we get into the rights that the lease grants to the farmer.

Remember when Sarah mentioned that at its very core, a lease is an agreement to grant rights to the use of land to someone. That section covers all of those rights. And then a good farm lease, of course, is going to cover farming types of things. So you'll want to talk about all kinds of production related activities and also the use of facilities and structures on the farm.

How the lease will be renewed is of course critical, whether you can transfer the lease is to say, you know, you're leasing now, but you find a property farm property that you buy midway into your lease, can you transfer at least? And also can the lease be transferred while you are there and the landowner changes and also communication. How will the tenant and the landlord talk about the important things? Those are all key areas for farm lease.

And then we have, of course, additional areas of consideration too. So let's get into them. So Sarah, I know I just kind of stole the thunder a bit with the basics, but you want to, if you could you run through a basic list of questions that, you know, a good sound farm lease should cover. Far less than that.

Yeah, definitely. Yeah. Right. So the basics, you know, this is just all the, all the basic stuff that needs to be included in any good farm lease.

So you know, first of all, who are the parties involved? That sounds pretty easy, you know, pretty understandable. There's a landlord and there's the tenant, but then there are these other questions like, is the tenant acting in a personal capacity or on behalf of a business such as a farm LLC? And is everybody represented?

Is everybody who needs to be represented at the table? So are there other members of the LLC that maybe need to be present and sign that farm lease and understand what's involved in that? So, you know, exactly another thing to remember, exactly what kind of land is being at least. So is there a precise legal description and a map of the premises?

That feels like that's pretty, you know, obvious, but it's not always obvious. Maybe there are two different parcels of land to tax lots. And you really do want to make sure that that you know what land you're leasing is at both of them, just one of them. And then, you know, this is pretty obvious too, but sometimes these things don't make it up to the lease.

So a lot of times they don't actually. When does the lease begin? You know, is it beginning when you're first talking about the lease? Is it beginning when you sign it?

Are you signing it on this date? Maybe you're signing it on December 23rd, but you're not actually going to be on the land until January 1st. So determining, you know, when the actual lease start date is really important. And that gets to the notice stuff that we'll get into.

So also, when does the lease end? Another thing that should be obvious, but isn't necessarily, is it a lease for a month, a year, 10 years, you know, all that needs to be spelled out. And then, you know, what about the rental payment? When does it do?

How should it be paid? Is it paid in cucumbers? Cash? Is it monthly?

Is it on a yearly basis? And what if it doesn't get paid? Is there a late fee? If so, is there interest?

How is that determined? And then something else that doesn't always get talked about the taxes, you know, who's paying the property taxes? Is it going to be the landowner or is the leasing farmer going to chip in on that? So those together make a pretty comprehensive list of all the terms that any good farm lease has to happen in it.

Yeah, for sure. And in terms of like what the lease does, the lease grants the right of use for the land. But that right of use can be pretty expansive depending on what the parties agree to. So they're like, what rights does the lease grant to the farmer within the obvious, you know, overarching use of the land?

Yeah, I mean, at the very beginning of this conversation, we talked about how at its very core, a lease is really a grant of authority, you know, granting the authority to use a certain piece of land. But what does that mean? If the farmer is granted the authority to use this piece of land, what can they do on it? Can they engage in any kind of commercial use in the property?

What if they want to grow hemp? Is that allowed? You know, that those things need to be spelled out. Is it only agricultural use of the property or can they do other things?

Because they have agritourism on there. Can they do any processing? You know, these things really need to be figured out. And then it can be complicated too.

If there's a residential aspect of the lease too. So if there's a farm house on the property, then is that something that should be included in the commercial, you know, farming part of the lease or should those actually be separated out? That can be another good question. You know, can the farmer sub lease?

What if they need to leave? Not the farmers have a go on vacation, but if they did, could they sub lease their farm lands out while they're gone? You know, lots of different questions come up. And importantly, these are questions that you listeners can ask and explore with either your tenant or your land owner slash landlord is your exploring, releasing relationship and working on that resource to check list of questions to ask.

Yeah, these all come from that checklist and they're just, they're just so important. You can't understate the importance of these. Yeah, for sure. Well, how about production related issues?

What would you say, sir, like the top, some of the top questions are there? Yeah, I mean, getting into all the the farming bits here, then, you know, I mentioned before around what is that grant of authority? Can they do, you know, is hemp allowed or other kinds of crops allowed? Can we do livestock?

You know, is it okay to have cows on the land? I mean, that's a whole different kind of kind of use of the land. Then if you introduce livestock and all of a sudden, now you have these cows, they could get out of the cows. Don't necessarily respect fences all the time.

They might get out into the neighbors property. They might get into the road. All kinds of problems can potentially come from the use of livestock. So what is that allowed?

And what about, you know, what if the farmer wants to do organic? Are they allowed to do that? Or what if they're restricted to just doing organic? Maybe they want to do conventional.

What if they want to use pesticides or herbicides? Is that allowed? Or is the landowner going to prohibit that? You know, all that needs to be talked about.

So one of the other things we need to think about land stewardship practices. What about if the farmer wants to do, you know, cover cropping and some other, you know, conservation practices on the land. Will they be rewarded for that? You know, will the landowner pitch in on that and maybe reduce their rent if they engage in those practices that are actually going to be very beneficial for the landowner in the long run?

Yeah, for sure. Just communicating those goals for the, from business as well as the stewardship of the land, those can be mutually worked on between the two parties. So really good to communicate about those. Yeah.

All right, Sarah, let's see. What else? There's so much potential at least because you can cover so much and we are going to cover a little bit more for you for you all in terms of facilities on the property. So that may seem like obvious.

I'm like, oh, if I'm allowed to have livestock on the farm, then obviously I can use the facilities that exist like irrigation. I should be able to use that for bringing water out to the pasture so that the cows can get water. Well, that might be an assumption, but it may not be one that's shared by both parties. So Sarah, in terms of facilities, what would you say are some top questions to explore?

Yeah, when you brought up irrigation, it's really important now where I am in Oregon. I mean, there's such a water shortage so much so that farmers are leaving their land because there's no water right now in the drought. So yeah, irrigation is just an absolute, you know, no question, top-notch, top priority for farmers leasing land. But you know, what if the irrigation breaks down?

What if the pump breaks? Who's responsible for fixing that? So that those kind of maintenance and repair questions are going to come up around the use of facilities and equipment, really important to know who's paying for all that. And then there's just the basic utilities like the electricity to run the irrigation pump or what about how are we handling, you know, who's paying for the internet?

If that's going to be a piece of, you know, if you have an office on the farm or if you're living there who pays for all that, you know, who takes out the trash, the recycling, all of those things you'd imagine in a regular kind of lease, maybe a consideration for the farm too. So what about, you know, packed shut facilities, refrigerated storage, is all that going to be available for the farmer? And this can also be, you know, complicated when maybe the land's owner is doing farming as well. So how are you going to work together if you're both making productive use of the land?

Yeah, for sure, for sure. And then moving on to the length or the term of the lease. Like, let's explore renewal. Like, sir, you had earlier how it's important to set a start date and end date for the lease because it could be kind of squishy depending on, you know, when the agreement was made and when the farming actually happens or when the farmer actually gets onto the land.

But same for renewal, you know, like should have produced or assumed that thing, the lease will renew if nothing is said or something else because, right, that these agreements can't or so, lease agreements are so powerful because the parties have such authority over what the terms are, including how the lease renews. So what would you say are some of the top considerations for lease renewal beyond the obvious, like, let's talk about when the lease renews. Yeah, right. Yeah, I mean, I think one of the biggest one that comes up is, you know, just the lease just renew automatically, you know, under the whole, under the set of terms in your original lease.

And if you do nothing, does it just continue on under the same terms for that same period of time? Or are there, you know, affirmative steps that you have to take by either party, you know, maybe your lease, maybe you want to put something in there that says, you know, the lease will only be renewed if a month or three months before the end date that the tenant goes to the farmer and says, yes, I affirmatively, you know, want to renew, you know, maybe because not everybody wants to renew a lease. It's a big commitment. And maybe you decide after, you know, a year or five years of farming that actually you, you don't want to do this anymore.

Maybe you don't want to do it on this property anymore. Maybe you're actually in a position where now you can buy farmland. Now that you have several years of farming under your belts and you have, you know, a solid business plan and cash flow and business projections and lots of business, you know, evidence that you have a good business and can now apply for that traditional loan. So in that case, you don't want to be stuck in another five year lease.

So really important to know exactly how we are going to renew or not renew, you know. Yeah, for sure. I think the kids don't assume. Yeah, for sure.

Yeah. And then another big, another big problem that comes up is what if the farmer does a lot of improvements to the land? Maybe they put out hoop houses and maybe take a lot of care with the cover crops and soil amendments and really improve, you know, the health of the soil and the land. And maybe they, you know, build a packing shed.

So in that case, when they decide not to renew, what then, you know, what does the tenant get compensated for those improvements? Do they have the right to maybe their hoop houses that they can take with them? Can they? You know, these questions, that's another question that needs to be addressed.

And then, you know, another thing too is what about termination? What if what about early termination? So do you want something in the least that says that you can terminate the least under certain conditions, like something triggers a termination? Like if you are going to be farming organic, that's something that the land owners have is really important to them and something that you agree to do.

And then all of a sudden, the landowner finds out that you're using, you know, certain synthetic chemicals or pesticides. Does that trigger a default in the early termination of the lease? You know, is this something that maybe one party wants to have, you know, in the lease? So just a top, top few priorities there, Eva.

Yeah, just a few top important ones to consider for sure. And another area that we focus a lot on and across our programming up from comments is good communication. And yeah, at the end of the day, it's, you know, one person leasing from another, one party leasing from another and regular communication can be super helpful with avoiding problems between the farmer and the landlord. So Sarah, what are some mechanisms for communication that could be included in an lease to get our list or some ideas of what they can be thinking about?

Yeah, I mean, just something that can be really helpful is to, you know, maybe you'll obviously go, we're going to talk to each other. We're on this land together. Of course, we'll talk. We're friends.

We're, you know, in communication regularly, but I think it can be really helpful to build into a lease, you know, annual or even quarterly meetings. And also even you might want to just consider writing down some topics that will be discussed at those meetings. And you know, maybe you'll talk about your rental rates every year and make sure that it's at a place where that, you know, that feels good to everybody. And yeah, that part can be really, really helpful.

Yes, for sure. And that's setting those expectations. So I know that a meeting's coming up and maybe you all set an agenda about what you'll discuss for sure. Okay.

And then let's see, we talked about the transfer of the lease and, you know, asking the question if the farmer dies or decides not to continue farming, maybe the lease is transferred to another individual, or you know, what happens if the landlord passes away or sells the property to someone else, most farmers will want to make sure that the lease still attaches to any future land owners so that the lease should state as much. And so Sarah, like, how can a farmer make sure of that? Yeah. Well, a really important way to protect yourself in a lease, a good way to protect your lease in case the landlord's landowner were to die or sell the property is to put future lands owners on notice that your lease is valid and existent.

So the best way to do that, and in some states, and we'll get to New Hampshire specific rules on this, but is to record the lease in the county registered deeds. So that means just taking the document or at least you don't have to take the actual lease. If you want that to be private, just the main terms of the lease, just something called a memorandum of the lease is something you can take to the county recorder's office and get it recorded, which means it's in the public records. And it's something that any future land owner would have noticed of if they bought the property.

So best way for sure to protect your lease in that situation. Yes, get it recorded at the register of deeds very likely in your county. Yeah. All right.

So any other considerations before we move on to the New Hampshire state specifics for all you listeners in New Hampshire? Yeah. I mean, there are lots of other considerations. We won't get into all of them now in the interest of time.

But I think one I'd like to touch on at least is something called a first right of first refusal or an option to purchase. So that can be something that comes up a lot for farmers that are leasing land and really interested in buying land eventually. And if this is a piece of property that they're really interested in potentially owning someday, that sounds like that is maybe even an option for that the land owner would consider. It can be something that you might want to consider putting into the lease itself is this option or this first right of refusal.

So basically, if the land owner were to sell the property, you could have a provision on the lease that says that you as the tenants have an option to purchase it. So it means basically before the land owner goes and sells it to somebody else, that you get first steps. So you have the legal right to decide if you want to be the one to purchase that property. Yes, which may be something that you might be very interested in depending on how long you've been farming on that piece of land, how much you've invested in improvements, what your setup is like and maybe the setup is perfect for growing your farm far into the future.

So a good tip there, Sarah. Thank you. Yeah, no, thank you. This is such comprehensive info for our listeners on farmland leasing.

So now that you all know about the substance of what needs to be included in a solid farm lease, let's talk about what I'm sure many of you have been waiting for this whole time. Because this episode is about friendly saying, well, how am I trying to say this with a focus on New Hampshire state law, but the thing is everything that we've been talking about so far is applicable to farmland leases wherever in the 50 states you are. But to bring it literally home to one state and give farmers a new Hampshire some idea of nuances to be aware of with your state law and for for you listeners who are not in New Hampshire, this might cue you in on, you know, just how different laws can be from state to state. So you may be inspired to look into what your state has to say about farmland leasing.

So Sarah, what issues do producers need to be aware of with farm operations in New Hampshire when it comes to leasing? Now that our listeners understand that leasing law is different from state to state and each state has their own unique set of laws pertaining to land and leasing land. So like I said, many of those principles are the same across the nation, which is why the bulk of this episode is applicable to all producers everywhere. So let's share now the highlights of New Hampshire leasing law and what's important for folks to know about all that and their great state of New Hampshire.

Sure. Yeah, well, you know, there are basically five issues I'd like to highlight for our New Hampshire farmers. And these are number one, how long a lease can be in New Hampshire and how long a lease can be here. That's that pesky statute of frauds, how much notice you have to give to terminate a lease.

I want to also talk about the importance of recording your lease. And then finally, I want to talk briefly about the mediation program here in New Hampshire. If it disputes should ever arise between landlord and tenant. So first, how long your lease can be.

So some states rates limit the length of agricultural leases, but New Hampshire is not one of them. I mean, there is a limit, but it's 99 years, which basically is like forever. So not a big issue here, just something to be aware of if you hear whisperings of lease limit laws, not an issue here in New Hampshire, tends to be more of an issue in the Midwest, not in New Hampshire. So this is good for farmers who are really wanting a long term lease, which can be a huge benefit for land security, especially when doing something long term like planting apple trees or something.

Next up, the requirement to write down lease. So New Hampshire has its own version of the statute of frauds and it's very typical. If you have to write that sucker down, if you want a lease that is enforceable for more than one year, if you have to lease, if you have a lease of farm on Mr. Jones property, say for 10 years, and Mr.

Jones tries to end that lease and you're five and you end up in court with Mr. Jones, the judge is going to do that real judgy thing where they look down their glasses covered nose from their high up pulpit with the look of astonishment and bewilderment. After you tell them, you don't have this lease in writing. And say that you have no rights to be on that land past that first year.

And then they'll quote the statute of frauds and then it'll be sad. Now, on to notice, this is one that really trips people up again and again. It is also really important to understand. So let's try and shine some light on this.

The last thing you want to have happen is to plant $30,000 worth of garlic, which can't be harvested till next summer, then be told by a land owner, Larry, that he needs to terminate your lease at the end of this year, which is in just a few months, so long before your little garlic babies are ready for harvest. But this is just the situation one of our member farmers found themselves in. So these things do happen. Can this happen?

Is this legal in New Hampshire? Well, it depends on a lot of factors, but just know that in New Hampshire, your landlord must give you three months notice to terminate a lease. This can be confusing because it doesn't just mean that you have to be off the land three months from whenever your landlord gives you notice. It means that your landlord must give notice three months before the end of your lease period.

So this can be really tricky because sometimes it's hard to figure out when the lease period ends. If nothing's written down and you don't know how long the lease period is supposed to be, that's challenging. So just another good reason to write that lease down. And on a related note, let's talk briefly about recording.

Recording, as we mentioned before, is just simply making a legal document public record. So in New Hampshire, that is done at the registry of deeds. And this is important when it comes to land related matters, because even I talked about already, if a future owner goes to buy a piece of property, they are considered to have constructive notice of things related to this land if such things are recorded. So it's a very good idea to record your agricultural lease, or at least record, like I mentioned, a memorandum of your lease, which is a document that says the basic terms of the lease, but it's not the least document itself.

Again, if you want to keep that part private, this way, if the farm property is sold and you still have that you still have that bell lease and the buyer will have to honor that. So without such recording, you may still be able to enforce a lease in that situation, such as in the case where a buyer went out to the property and saw with their own eyes that there was somebody leasing it. But in New Hampshire, any lease for a term greater than seven years will not be enforced if they are recorded. So even if that buyer has actual awareness, they've been out, they've seen that you're on the land, they still could legally terminate your lease if it's not actually recorded in that registry of deeds.

So becomes really important here in New Hampshire. So lastly, I know a mediation. The New Hampshire Agricultural and Mediation Program is a USDA program that provides mediation services to the agricultural community to help resolve disputes before they ever end up in court. So if you're working on your lease, it may be a really good idea to include a provision about resolving disputes and to agree that if one comes up, you'll use this program to resolve the issues before spending a bunch of money and time suing each other.

Always good to measure twice cut months. Yeah. No. Do work on the front end, for sure, to avoid issues on the back end.

Well, great. So I think that's going to run down on the high notes for New Hampshire State Specifics for Land Lacing Law. I hope that helps you listeners in New Hampshire to understand some of the most important parameters for drafting up your negotiating or farmland leases. And then also for folks across the country gives you an idea of some examples of state specifics.

So really, really great information. And Sarah would love to leave our listeners with a couple of action steps that they can pursue as hopefully they go forth into this winter season of planning and office organization and visioning for the 2022 growing season. What action steps should producers be keeping in mind what you say for farmland leasing? Yeah, definitely.

So here's for beginning stages, if you're just in the beginning stages of finding farmland, your I say your action step really is to commit to having an open mind about leasing. So don't discount it as a viable farmland access option, because it really can be a great option for farmers, especially for beginning farmers, which is what I hope you understand better by now. So under the right circumstances, yeah, it really can be a great way to get on to land quickly and get farming. So with that in mind, go forth into the farmland linking sites.

There is one for your neck of the woods here. There's the New England farmland finder. And many of you might already be familiar with that. But if not, it is from New England Farm Link Collaborative, which has land not just to buy, but also to lease.

I did some digging around on there. And there were definitely some options for leasing out there. So the next action step I would say is for those of you who have a lease opportunity, maybe already on the table, you've already looked at that site or other sites and you've already found something that looks great. And you've started exploring that.

Maybe you've identified that piece of land, maybe you've already begun talking with a land owner. So your action step at that point, I would say before you quit your day job and haul all of your personal belongings off to the farm, go back to that checklist of questions to address any farmland lease. So this is the time to ask lots and lots of questions, download our checklist of questions and just get to it. So sit down with your prospective land, Lord, and ask the hard questions.

Say what you need, find out what they need. This is not the time to be shy or nice. It is the time to get it all out on the table and find out if this is really going to work for you. And lastly, if you've already secured a lease, you've saved, talked about the hard stuff.

You're going forward with it. But now you need to actually do the hard part of writing it down. Sierra Model lease. And we've got one on our website.

And there are also some other good options out there. For example, land for good has a bill to lease tool. And maybe that will be in our show notes, even if we have show notes. I'll drop a link to all of the resources you mentioned there in the show notes for you.

Great. Great. Yeah. So these model leases can be a real handy tool if you're already on the land and in a leasing situation.

Also, and maybe you've been doing this for years already without a lease, but you're looking for more security. So you might want to, at that point, consider writing it down and using one of those models to get there. Maybe you want that option to purchase. And maybe you want to convert this to a rent to own situation.

So we've got those resources available. And so go forth, check them out. Now's the time. Now is the time.

And best wishes to you all as you shore up, form, vision, dream, your farm land leasing relationships. Best wishes. That's all for now. Thanks for tuning in.

Thanks, everyone for listening. Yeah. Thank you, Sarah. What a heavy lift.

So much good information. We hope you enjoyed this episode of the Farm Commons Podcast. For more information on what you just heard, as well as a variety of farm log guides, models, checklists, flow charts, and more, visit our website at farmcommons.org. You can also email us at info.farmcommons.org if you have any questions or comments about this podcast or any of our online materials.

Thanks, everyone, for listening and keep on growing.