Remember the September 1 Lease Termination Notice Deadline
Perhaps the most misunderstood portion of Iowa farm lease law is that governing the proper termination of a lease. Iowa law is unique in that under Iowa Code §562.6, a farm lease renews automatically—under the same terms and conditions as the original lease—absent specific action by one or both parties to the lease. The automatic renewal provision applies to both oral and written leases. It also applies to leases covering any size of crop ground. Although prior law contained a “less than 40-acre” exclusion from the automatic renewal, that distinction no longer applies unless the primary use of the ground is for an animal feeding operation.
This leads to a less than intuitive result. For example, if a landlord and tenant have a one-year written farm lease stating that the lease will terminate on February 28, 2015—without the necessity for notice—that lease will automatically renew for another year, unless (1) either party properly serves the other party with a notice of termination on or before September 1, 2014, or (2) the parties enter into a separate termination agreement.
Notice of Termination
Under Iowa Code § 562.7, one party to the lease may properly service a written notice of termination on the other party in any one of the following ways:
- By delivering a notice of termination to the other party and obtaining from that party an acceptance of service signature on or before September 1.
- By serving the other party, on or before September 1, in the same manner as one would initiate a lawsuit (by hiring a sheriff or a process server and obtaining an affidavit of service). If personal service is tried but cannot be obtained, notice by publication can be made.
- By mailing the notice before September 1 by certified mail. Notice served by certified mail is made and completed when the notice is enclosed in a sealed envelope, with the proper postage on the envelope, addressed to the party or a successor of the party at the last known mailing address, and deposited in a mail receptacle provided by the United States postal service. Note that the statute requires the mailing to occur before September 1.
Iowa courts have allowed no wriggle room as to these legal requirements. Certified mail means certified mail. If a party attempts to provide a notice of termination through regular mail, the notice is insufficient, even if the other party admits to having received and read the notice prior to September 1. If a proper notice of termination is not served by September 1, the lease automatically renews for another year, and a landlord or tenant can do nothing to unilaterally terminate such a lease, absent a material breach by the other party.
If a written lease outlines the procedures the parties must take to terminate the lease, those provisions will likely not override stricter statutory provisions. It is likely, however, that if the parties’ lease contains provisions that are more restrictive than the statute, those provisions would be enforced. For example, if a written lease states that written notice of termination must be served by August 1, a court would likely enforce that requirement. On the other hand, if the lease states that written notice of termination must be served by October 1, a court would likely not enforce that provision. Parties may not waive their rights to statutory notice in a written lease. They are protected by the statute whether they choose to be or not.
Iowa State Extension has provided a lease termination form that may be used to provide notice of a lease termination. For a more detailed review of Iowa farm lease law, please read our online publication.
The Center for Agricultural Law and Taxation 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. The Center'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.