Terminating Farm Leases in Ohio — Is There a Date That Leases Must Be Terminated?

April 14, 2009 at 7:30 am 2 comments

Often I overhear a conversation, or am sometimes flatly told, that if a farmer has his or her inputs purchased for a rented farm by March 1 a farm lease cannot legally be terminated by either party.  In Ohio, as of the date of this post, this is not true. It is true that some states do have legislation or statutes that provide a date, but Ohio is not one of those states.  From the OSU Ag Law Newsletter, Fall 2007:

If the parties do not have a written lease covering notice of termination, Ohio court made law would come into play to determine the proper notice period in the event of a dispute. Our courts vary on the notice period required for a year-to-year farm lease-from three months to six months. Based on these court rulings, parties to a farm lease in Ohio should consider providing a six month notice of termination. If proper notice is not provided by one party, the other party could legally argue that the lease should continue for another lease period. A statutory law stating a specific notice period for farm lease termination could help prevent disputes over whether adequate notice has been given.

The above piece was written by Peggy Hall, Director of the OSU Ag Law Program, and has not changed since she wrote it in 2007.  There is a local custom that landlords and tenants may follow.  The local custom in Van Wert County is to renogotiate leases late summer or following fall harvest.  However, without anything in writing a lease could technically be renogiatiated at anytime.  OSU Extension strongly recommends putting any lease agreement in writing to avoid the ambiguity of farm lease termination.  Don Breece, Robert Fleming, and later,  Peggy Hall, have developed an excellent resource for farm leases:  http://aede.osu.edu/programs/aglaw/docs/FarmLeaseFactSheet2008.pdf.  In addition to that resource, there is a very east-to-follow checklist developed by Don Breece at http://ohioline.osu.edu/fr-fact/0003.html

Finally, for the latest in changes or updates in farm leases I recommend you subscribe to the Ohio Ag Manager newsletter at http://ohioagmanager.osu.edu/services/email.php. Ohio Ag Manager is a monthly newsletter from OSU Extension that focusses exclusively on farm management issues in Ohio.

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2 Comments

  • 1. Harl Delos  |  April 14, 2009 at 10:10 pm

    In the early 1970s, Dad was farming some land on shares that belonged to a non-farmer, on an oral agreement. He had plowed the land the previous fall, but the landowner sold the land in early April, before any spring work had been done, to a farmer who wanted to farm the land himself.

    There was some discussion over whether the new landowner should simply pay Dad for having plowed the land, or whether he was required to let Dad farm it that year. This was in Paulding County.

    One of them – and I think it was the new landowner – applied for an injunction allowing him to farm the land for the year; the judge said that because he hadn’t been terminated in time, Dad got to farm it. There didn’t seem to be any hard feelings, which surprised me. I guess they just asked the judge to decide where everyone stood.

    I don’t know if it would have mattered whether it was cash-rent or farming on shares.

    A contract is a meeting of the minds, and in the absence of a written contract spelling out terms, courts generally will consider trade customs to have the force of law. This isn’t always the case; I believe that in Ohio, the statute of frauds says that any contract selling property must be a written contract, rather than an oral agreement.

    I agree that putting agreements in writing is always a good idea, just to make sure that both sides agree on what they’re agreeing to. It wouldn’t have to be written by a lawyer in order to serve the purpose, as long as it’s thorough, and clearly cover all circumstances. After all, if it has to go before a judge, both sides are probably going to be unhappy….

    • 2. andykleinschmidt  |  April 14, 2009 at 10:46 pm

      Excellent comment, Harl. Your points are all great, I’ll point one of them out for readers. Harl wrote ” . . . in the absence of a written contract . . . courts generally will consider trade customs to have the force of law.” Simply put, this means that if you don’t have anything in writing, a judge will look to what is ‘normally’ done and rule in favor of what is ‘normal.’ So, if you buy a piece of ground in late March with the intention of farming that ground, you’ll likely be out of luck unless you have an understanding already in place with the current tenant farmer.

      Where I see this come in to place frequently is during an estate settlement. The heirs (usually three or more adult children) cannot decide what to do with the land and by default sell the land. The tenant farmer is usually caught in the middle if the sale occurs late-winter. If the tenant cannot come up with the cash or financing to purchase the land, then he or she worries about being displaced by the new owner. Rarely this makes it to court; attorneys settle both parties out of court with the existing tenant either 1) holding on to the ground for that season, or 2) getting paid for any tillage/fertilizer/labor.

      AK


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