Agenda. Lease communications Lease provisions The future of your land?!
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2 Agenda Lease communications Lease provisions The future of your land?!
3 Lease Communications
4 Lease Communications For Ag Land Leasing to be successful, communications is key! This applies to the landlord and to the tenant The vast majority of failed leases do so because of the lack of communications Communications is key, even for cash leases What is our attitude towards making this work? Attitude will change the negotiations and dialog
5 Lease Communications Biggest Problem!!!!!!!! Are you listening? Seek first to understand before you seek to be understood! Be sure you clarify the other s point before making your own Think about (understand) what the other party is saying not about what you are going to say next
6 Everyone is Proud of Their Place!
7 1 st conversation Goals for the Land Not about the cash rent level What does the landlord want and what can that tenant bring to that ground? Have Vision or Goals for: conservation, fertility, weed control, irrigation, CRP, etc.
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10 1 st Goal of Relationship - Trust Neither party should feel that the other has the most power Build trust with respect and telling the truth Avoid Greed powerful negative emotion Avoid managing farmland based on coffee shop talk
11 Communications: For Tenants! Share updates during the season Share information on cost of production Share data from precision ag Share yield data Crop insurance records
12 Communications: For Landlords Be clear with expectations for: Weed control Non-crop acres management Use of Ag technology Use of BioTech products/gmo/organic/other..
13 Communicate: Avoids the Don ts Don t wait for a crisis (drought or hail) Especially on pasture leases Don t wait for end of lease Don t wait until you have lost trust
14 Communicate
15 Relatives (Cannot live with them, can t live without them!) Each situation is different Sweetheart deals Generational Values (4 living generations: matures, boomers, x ers, millennials) What is your commitment to your community? To rural Nebraska?!
16 Leasing Provisions
17 Key Lease Provisions Not a complete list but some items to think about Fertility Set minimum fertility levels in lease Who is paying for soil tests? Protect landlord with minimums Phosphorus, Nitrogen main concerns Protect tenant making multiple year investments Lime typically a landlord expense Phosphorus
18 Key Lease Provisions Irrigation systems cause most trouble to adjusting rental rates (cash leases) Assumed that all irrigation ownership is by landlord In many cases, the tenant is bearing some of these costs Rent needs to be adjusted (lower) to reflect this change
19 Written Leases Move all leases to written leases!! (please) Current Law for handshake, or Verbal leases: For farmland, notice of termination must be given by September 1 (6 months prior to 3/1 start of new lease) Set by Supreme Court Notice given by registered letter For either ending lease, or changing provisions! Not the same for Pasture Leases Site: aglease101.org
20 Other Lease Provisions Grain Bin Rent Sometimes provided, sometimes rented Have electricity on separate meter Charge per bushel per year(suggested) Repairs are landlord expense unless there are other arrangements
21 Other Lease Provisions Hunting Rights Typically belong to tenant Can be sold if you have something to sell
22 Other Lease Provisions Cornstalk Rent Cornstalks belong to the tenant unless there is a provision making a different arrangement So no rent is collected by landlord typically Subleasing? Fencing and water Baling cornstalks OK once in 3-4 years Not all the time (not recommended) Phosphorus and organic concerns
23 Manure Application Great if price is right Probably not every year Landlord may want provision to limit application(?) Base on P levels
24 Fencing Nebraska has a fencing law has to be followed
25 The Future of your Land!
26 Ag Land Transition We cannot take the land with us at any age, have a transition plan in place For Producers: What does retirement day look like? Sell, transition to family member, rent, etc.. Treat all children how? Is fair the same as equal? For Landowners: What are your plans for the land you own? Think about that right away to do a good job of tax management, reduce family stress
27 Ag Land Transition Guess What? Communications is key here too! Probably best to have a family meeting Get everyone s input/ideas for the future of the land Include all adult members of the family Final decision by the owners Communicate that decision
28 SUMMARY Communications is a must For both leases and farm transition Avoid the don ts Leases in writing! Always do what is best for the land resource to protect it for the next generation!
29 PROPER LEASE COMMUNICATIONS AND PROVISIONS Allan Vyhnalek Extension Educator th St. Columbus, NE Phone:
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