Surviving and thriving in a difficult economy takes creative thinking – exploring new options or familiar options in new ways. One option worth evaluating is land leasing. Gordon Carriker, Agriculture Business Specialist with the University of Missouri Extension, explained that this option can be beneficial to both the leasee and leasor.
For the landowner a lease is an effective way to create a known revenue stream from your land. Carriker suggested that in some cases the certainty and amount of revenue from a lease, compared to what can be expected from using the land yourself, might be favorable to your operations. Similarly, leasing land may be a viable alternative for an operator seeking additional acreage. In general, Carriker said that a land lease can be put together more quickly and with fewer headaches than a land sale.
When considering a lease there are a few things to keep in mind to make sure it is done correctly. “I strongly recommend that the agreement be in writing,” Carriker urged. That is the biggest mistake he has seen made most often. Even when the lease is between friends or family, not having the terms in writing is an open invitation for problems. Having the lease in writing avoids misunderstandings and relying on memory. In some cases, a verbal agreement may not even be valid under state law. “It’s just a good practice,” he explained, that could preserve valuable friendships, family ties and business relationships.
Putting together a suitable lease agreement doesn’t need to be a big job. Carriker believes that in most cases it can be hashed out by the land owner and tenant over a cup of coffee or two. It pays to make sure that you think about what should be in the agreement: costs, upkeep, length of the lease, access to property and any special considerations you might have.
The University of Missouri Extension has a few guides available to help you understand the basic elements of a reasonable lease agreement. Visit for links to G520 and G426. These documents are available both online and through your local extension office. The guides help explain good lease practices and state lease laws. Reviewing these can help avoid common mistakes and misunderstandings.
Your lease agreement can be very flexible, giving you the ability to structure things like access to the property, how the lease will be paid, how the land can be used and how any other conditions you want to include will be handled. “As long as it is legal, anything you agree to can be included,” Carriker explained. He advised that each party should sign the agreement and each party should get a copy. To be binding, the agreement does not need to be filed or notarized. Also, unless the agreement is unusually complicated, Carriker said you don’t need to involve an attorney. If you have a question about whether something is legal, contact an attorney. If you want an opinion on whether your lease is reasonable, Carriker said the Extension is available to help.


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