If you run cattle or other livestock, chances are that you may need to eventually lease pasture to keep up your herd numbers. Or, maybe you have some acreage that is not in use and you’d like to make a little money by leasing your pasture. Pasture leases are common in Ozarks cattle country – but it is also common to hear of a lease agreement gone south. Pasture leasing agreements are like any relationship – by using consideration and communication, you can come up with an arrangement that works for everyone.
Consideration
Consideration is an important first step that often gets overlooked when drafting pasture lease agreements – in fact, not taking the time to consider all the necessary details is one of the biggest mistakes that a tenant or a landlord can make.
“In any relationship, whether it’s leasing or dating someone, the initial stages are usually marital bliss. But in the beginning is when we should take the time to consider all the issues that may arise down the road,” said Wesley Tucker, MU Extension agriculture business specialist. “Discussing them upfront will allow us to compromise and develop a mutually beneficial agreement.”
Whether you will be the tenant or the landlord in the pasture leasing situation, take time to really think about what you want to achieve through the agreement.
“Both parties need to stop and think about specific things they want included,” Tucker added. “Does the landlord want the pasture clipped? Do they want to retain the hunting rights? Do they want the land fertilized?”
As a landlord, any specific items you want to see completed by the tenant should be included in the lease agreement. Be sure to always include legal specifics such as retaining the right of entry to the land, not allowing subleasing, requiring the tenant to have liability insurance, etc.
“Conversely, if there is anything the tenant wants the landlord to consider doing, now is the time to discuss it,” Tucker said. “For instance, would the landlord consider sharing in long-term fertility and lime applications or spraying for weeds that are already there when they (the tenant) take over?
“Would the landlord consider a long-term lease to give the tenant more incentive to invest in the land? How much notice must the tenant be given if the lease is not going to be renewed?”
All of these details should be addressed up front when drafting a lease agreement.
Communication
Communication before and after the creation of the lease agreement between the tenant and the landlord is an important component of a successful lease term.
“Talk about everything upfront, but also have open lines of communication during the relationship so adjustments can be made if necessary,” Tucker said. He offers the example of if a tenant does not realize that the landlord is unhappy about something they are doing, how will they know to change it?
“However, because many of us avoid conflict, rather than telling them we are unhappy about something, the landlord may just tell the tenant they are not renewing the lease. But if the lines of communication had been open, the tenant may have been able to change what they were doing and the relationship could have come out stronger on the other side. Just like a marriage, communication is essential,” Tucker explained.
