Well over half of the farmland in Kansas is leased. The person who owns the land doesn’t farm it. As such, agricultural leases are very crucial to most producers. Additionally, many agricultural leases are oral agreements. There is no written and signed lease agreement, it’s word of mouth and a handshake. Roughly forty years ago about 90% of all ag leases were oral. It’s now a lower percentage of that, but there are still many oral leases. Kansas statutes recognize oral ag leases as legal and binding, but there are numerous stipulations that govern them.
All oral leases are annual leases that run from March 1 to March 1 and renew automatically unless they are properly terminated. For a lease to be properly terminated it must meet three requirements. First, the notice to terminate must be in writing. Furthermore, it must state that the termination date is March 1 and the notice must be in the tenant’s hands 30 days prior to March 1. Any attempt to terminate a lease that does not meet these three criteria is not legally binding and the lease continues for another year at the terms agreed upon for the previous year.
January is when many leases are renegotiated. It is important to get these negotiations wrapped up soon because if the tenant and landlord cannot agree on new terms, notice needs to be given 30 days prior to March 1st. Kansas statutes treat pasture or range land the same as crop land.
Written leases can state other dates and contain many other stipulations into use of the land. But with an oral lease, in the eyes of the law, the tenant has full control for the entire year of that land including hunting rights. Which are some of the reasons why Extension really encourages written leases!
There are some considerations and exceptions that I need to note. If wheat was already planted on the farmland at the time that proper notice of termination was given, the tenant still has the right to harvest that wheat. Cash rent will be paid as per the prior year’s lease or expenses and crop shared at the previously agreed upon terms. For those acres planted to wheat the lease ends when the crop is harvested. If a perennial forage crop such as alfalfa was planted last fall and a stand was established, then the landowner owes the tenant for all seed, fertilizer, etc., that was used to establish that perennial crop.
The other area that may cause some issues is in fields that will be planted to spring crops. Some of these fields may have already been fertilized this past fall after harvest. Some may even have had herbicides put on for early season weed control pre-plant. If the tenant has applied these inputs and then is terminated properly by the landlord, the landlord owes the tenant for the fertilizer and/or weed control in addition to standard application charges. For cash rent leases that would be the full amount of the inputs applied, for crop share leases it would be the share that the tenant has paid for.
Lastly to avoid terminating leases—communication is so vitally important for both parties to visit at least a few times a year. By doing this hopefully questions and concerns can be talked about and addressed before they become problems.
For further information on leasing agricultural land go to www.agmanager.info click onto the Farm Management tab. Also, you can contact your local County or District Extension Office. The Cottonwood Extension Offices, Hays 785-628-9430 and Great Bend 620-793-1910.
Stacy Campbell is a Crop Production Extension agent in the Cottonwood District (which includes Barton and Ellis counties) for K-State Research and Extension. You can contact him by e-mail at [email protected] or by calling 785-628-9430.