What makes a good pasture lease agreement? Creating a good pasture lease requires careful thought by both parties, according to Wesley Tucker, University of Missouri Extension ag business specialist.

Most problems with a pasture lease occur when one or more parties don't fully understand what the other expected. Tucker says whether a lease is verbal or in writing, taking the time to discuss these issues ahead of time will prevent 99% of the problems that will arise later.

"In general, a good lease is one in which both parties agree it is fair and both completely understand each other's expectations," Tucker says.

"Writing out a lease forces you to consider what may seem like minor details now, but can become explosive issues later - things such as who's responsible for fence repair, will the pastures be mowed, who has the right to enter the property, or can the tenant sublease the property," Tucker says.

Verbal vs. Written

Verbal leases of more than one year are usually considered invalid and unenforceable. Although verbal leases are binding on heirs, enforcing them can create many other problems.

"Having the lease written out is probably the best thing to do in most all cases," Tucker says.

If after one year the landlord and tenant agree to extend a verbal lease for a second year, then the lease becomes what is known as a year-to-year tenancy. The lease will automatically be extended for another year at the anniversary date of the lease, unless one of the parties provides a termination notice ahead of time.

"The notice must be in writing and provided 60 days prior to the anniversary date of the lease, which is when a landlord and tenant actually made the agreement, no matter when the tenant actually took possession. The termination notice must be in writing, even though the lease may be verbal," Tucker says.

Regarding a written lease, the minimum requirements are the names of both parties, legal description of the property, duration of the lease, rental rate and payment arrangements, and signatures of both parties. Several other items also should be considered:

• Landowner entry rights. Unless agreed upon in the lease, the landowner doesn't have the right to enter the property.

• Subleasing. If the lease doesn't disallow subleasing of the property, then the tenant can sublease for the same original purpose without the landlord's permission.

• Fence repair and soil fertility. Agreeing on who's responsible for fences and who pays for materials ahead of time will ensure that fences are maintained and kept in working order. "Soil fertility and lime is one of the most critical agreements in the lease. If pastures aren't maintained, productivity will decrease, which hurts both the landlord and tenant. This may be a reason to establish a multi-year lease because it provides more incentive for the tenant to invest in the soil fertility," Tucker says.

• Other special agreements include the use of buildings, how often pastures should be clipped, noxious weed control and any special restrictions either party desires.

"It is in both the landlord and tenant's best interest to carefully consider all details of a lease ahead of time to prevent future disagreements. A written lease is a good way to force everyone to consider the details. Plus, it creates an incentive for both parties to structure the lease so it is beneficial to both," Tucker says.

A comprehensive fill-in-the-blank pasture lease that can be a guide for a developing a lease can be obtained online at www.mwps.org/stores/mwps/files/Free/ncr_109.pdf.

Look for more pasture management tips in the special Range & Pasture Journal insert in this issue. The insert is sponsored three times a year by the South Dakota Grassland Coalition and the Nebraska Grazing Lands Coalition.

Source: University of Missouri Extension