Case points out need for clarity in written farm leases

It’s always a good idea to reduce farm leases to writing. Unfortunately, most farm leases in Iowa (and elsewhere) are oral. But, even if the lease is in writing it is critical to make sure that the lease terms are clear and that both the landlord and the tenant have a common understanding of what the lease terms mean. This case drives those points home.

Here, the parties executed a written farm lease to begin on March 1 and run for one year. The lease used was the standard ISU extension form with inapplicable provisions marked out. The lease specified that it would continue from year to year unless either party gave written notice to the other in accordance with Iowa law (notice given by September 1 to take effect the following March 1). The lease specified that payment was to be made for “cropland” at a set amount per acre, with one-half of the rent payment payable at the beginning of the lease and the balance due September. The lease required the tenant to utilize good husbandry practices with respect to cropping practices and the control of weeds.

The landlord, in accordance with Iowa law and as provided for in the lease, terminated the lease after the first year. The lease specified that the landlord was to reimburse the tenant (upon termination of the lease) for fieldwork done and for other crop costs incurred for crops to be harvested during the following year. That’s a fairly standard provision. The problem in this case was that the tenant had intentions to farm the land for three years and utilize organic farming practices on the land. The tenant claimed that the lease allowed him to plant “forage,” and that he had done so by working in oats with alfalfa on part of the leased land. So, from the tenant’s perspective, the land was not weed infested, but contained a “forage” crop. Also, because alfalfa is a perennial crop which could be harvested over at least three years, the tenant claimed entitlement to reimbursement for expenses of establishing the stand and field costs for two of the three years after the lease had been terminated.

The court didn’t accept the tenant’s argument. There was nothing in the lease that stated that it was to continue for more than a year. While the parties disagreed over what constituted “forage,” the court could find nothing in the lease language that gave the tenant the right to assume that he could plant any crop or forage to intentionally harvest in a later year. The lease specifically stated that it applied for “1 year.”  The lease, the court held, simply was not a multi-year lease, did not define “forage,” did not specifically allow for organic farming and did not allow for reimbursement of costs and expenses associated with multi-year crops. Woodruff v. Hall, No. SCSC 004400 (Chickasaw Co. Dist. Ct.Mar. 19, 2007).