Time after time...I ask the same double question when a Landowner says he/she/they want to sell the farm.
Only ten words long but oh so powerful: "Is it rented and do you have a written lease?"
At least 50% of the time the seller states it is a gentlemans agreement...a handshake lease...nothing in writing.
In Nebraska and many farm states...there is no state law that says you must have a written lease to rent your farm ground.
However...in Nebraska, there is a law that protects the tenant if there isn't a written lease.
While the written lease should have specific dates and terms of the lease, the Nebraska Supreme Court ruled in 1984 that if there is no written lease...then the current lease expires on March 1 of the following year IF the owner/landlord notified the tenant of the lease being cancelled prior to September 1 of the current crop year.
What this means is: If the landlord did not notify the tenant by September 1 that the unwritten aggreement expires after the crop season...the same terms are in effect for next year...including rent amount and terms.
Conversely...if the landlord did notify the tenant...then the tenant is out after the crop season whether they want to be or not. The owner is free to sell the property, to rent it to someone else, or to rent it to the current tenant at a higher rate.
This is huge in todays markets where prices are skyrocketing both in value and rent per acre value.
The Nebraska crop season runs from March 1 to the following February 28/29th. The verbal lease change notification must be given to the tenant by September 1 of the current crop season. I recommend to put that in writing and if possible...get the tenants signature as proof they received it.
My best recommendation is to get into a written lease with definitve terms protecting both parties.
If you are thinking about selling...make sure you understand how the lease can impact the sale price.
I have seen this impact estates as well and not always in a positive light.
Estates can be tricky if there is no lease. Understand this...If there is no lease and the owner passes away...the tenant is only protected until the above dates...they are not entitiled to any more or any less.
They can't tell you they get it for years to come and you can't boot them off in the middle of the season or after Sept 1 for the following crop season.
example: Owner dies in October while the tenant is starting harvest and there is NO written lease. The tenant gets to farm next summer too at the same rate.
If you have family who do own farm land and you know it is possible that you may be an heir or executor of the estate...ask the owner if they have a written lease for the farm ground and make sure you know their wishes...and recommend they get it in writing.
I can guarantee you that someone will say it is different if there is not a written lease. So best to be prepared!!
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