January 2016

January 2016


Des Moines Water Works Lawsuit Gets More
Complicated

This month has seen several important developments in the Des Moines Water Works (DMWW) lawsuit against drainage districts in three northwest Iowa counties. On January 11, Judge Bennett ruled that the Iowa Supreme Court should decide four questions of Iowa law implicated by the lawsuit's tort and constitutional claims. Consequently, he certified these questions to the Iowa Supreme Court. Primarily, Iowa's highest court is asked to decide whether the claims for tort damages and equitable relief can be maintained against the drainage districts or whether Iowa law grants them qualified immunity. Secondarily, the Court is asked to decide whether DMWW, as a political subdivision, can assert protections like due process and equal protection afforded under the Iowa Constitution.

Depending on how the Iowa Supreme Court rules, all claims in the lawsuit not arising under the Clean Water Act or its Iowa counterpart could be dismissed. Consequently, the drainage districts filed a motion seeking to stay the federal court proceedings pending resolution of the certified questions. DMWW resisted the motion and instead asked the court to bifurcate the proceedings, separating the Clean Water Act claims from the tort law claims and allowing the Clean Water Act claims to move forward independently.

Continue reading here.


Farm Lease Questions Often Arise This Time of Year

As March 1 approaches, many landlords will see new tenants farming their property. Others will face lingering disputes from last crop year. This is a good time to review several important rights and obligations of landlords and tenants under Iowa farm leases. While these rights and obligations are primarily determined by the terms of a written lease, general legal principles apply to all Iowa leases. This article addresses several issues that often arise this time of year. Those wondering about their specific legal rights should consult with an attorney. This article is not intended to provide legal advice.

My tenant and I signed a written lease for the 2016 crop year. The lease provides that the rent is due, up front, on March 1. It’s March 5 and my tenant hasn’t paid. I am afraid that he does not have the money, yet he is not willing to walk away. What can I do?

First, it is important to note that requiring rent up front is a good idea for landlords wishing to minimize disputes and problems associated with a tenant’s nonpayment of rent.  Nonetheless, this protective approach does not always guarantee smooth sailing. Sometimes, a landlord will be forced to confront a nonpayment situation early on in the lease term. It remains true that working with an existing tenant and attempting to reach an amicable solution is often the best approach to handling conflicts. Even so, landlords concerned about their tenants’ ability to pay are better off confronting the problem early on, rather than letting the matter simmer and the problems compound.

Iowa Code §562.6 generally provides that a farm lease will automatically renew under the existing terms for another crop year unless the landlord serves the tenant with a written notice for termination on or before September 1. This is true even when the parties have a written lease that specifies a certain time for the lease to expire. Iowa’s laws are very protective of tenants and were written decades ago to ensure that landlords would not oust tenants without giving them adequate time to find new farms to lease.

It is important to note, however, that the written termination notice requirement does not apply where “there is default in the performance of the existing rental agreement." Failing to pay rent when it is due is a default in performance that entitles the landlord to initiate termination proceedings, no matter when that default occurs. Although many leases provide that nonpayment of rent “terminates” the lease, Iowa courts have ruled that termination in such cases is not automatic, but an option the landlord can exercise. The courts have reasoned that without this interpretation, a tenant could take advantage of his own default and unilaterally terminate a lease by refusing to pay rent.

Read the entire article here.


Iowa Supreme Court Says Ag Lease Violates Iowa Constitution

In Iowa we see a large variation in the way farm leases are structured. Many are oral, one-year leases that automatically renew from year to year. Others are written, five-year leases that must be recorded. And still others have their own unique approach. The Iowa Supreme Court recently reviewed one such lease and found it constitutionally infirm.

Article I, section 24 of the Iowa Constitution states that no lease of agricultural lands “shall be valid for a longer period than twenty years.” While it is apparent that this provision would invalidate the portion of a written lease that extends beyond 20 years, it is not clear how this provision would apply to a lease that exceeds the 20-year limitation only because of a renewal provision in the lease. That was the question before the Court in Gansen v. Gansen, No. 14-2006 (Iowa January 22, 2016).

The lease in Gansen provided for an initial five-year term. It then automatically renewed for four additional five-year terms unless the tenant provided notice to the landlord “in writing not less than 180 days before the termination of the then current lease term, or within 30 days of the commencement of the new lease term.” In other words, the landlord was locked into the lease as long as the tenant wanted to farm the property (up to a period of 25 years). The lease also provided an interesting provision stating that the rent “shall be adjusted each year by the mutual agreement of the parties.” If the parties were unable to agree, the current rent was to continue. Prior litigation had questioned the validity of this phrase, and the courts had ultimately set a fair rental rate for the remaining lease term.

Read the entire article here.

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CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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