7 Red Flags in a Farm Lease

Most lease trouble does not come from bad people. It comes from vague paper — terms nobody wrote down, or wrote down in a way two people can read two ways. Before you sign, read the lease once looking only for trouble. These seven farm lease red flags are the ones that cause the most grief later.

The seven red flags

• 1. No written lease at all, or a one-page form that never names the acres, the term or the rent.
• 2. Rent with no math — a flex or share rent with no formula, no price source and no settle date.
• 3. No notice terms, or notice terms that clash with your state's deadline for ending the lease.
• 4. Silence on repairs and improvements — nobody assigned fences, waterways, tile or buildings.
• 5. Payment terms left open — no due dates, no payee, no word on split payments or late rent.
• 6. Nothing about a sale or death — the lease does not say what happens if the land changes hands.
• 7. Verbal side deals — promises about hunting rights, storage or extra acres that never made the paper.

What to do when you spot one

A red flag is not a reason to walk away. It is a reason to ask a question while asking is still free. Raise it plainly, agree on the fix, and write the fix into the lease before anyone signs. Most landowners would rather settle a fence question in October than fight about it in June. If a lease has several flags, or covers a lot of acres and years, a short review by a farm attorney is cheap insurance next to a season of the wrong terms.

Keep the marked-up copy with the signed lease. A year from now, that page shows both sides what was noticed, what was agreed, and what was deliberately left alone — which turns most future arguments into a short look at the file.

Source: adapted from Field Time, Not File Time (Oaken, free ebook). Educational content only — not legal or tax advice.