You have determined that a one or two year lease term works best for your situation.  While a longer term does provide greater security for the tenant, there are alternative ways to improve a tenant’s confidence in the tenure.  These methods will not ensure the tenant’s long-term possession of the land to the same degree as a lease term for several years, but they can help improve the landlord-tenant relationships and assure the tenant of reimbursement for unrealized long-term investments.

The following question is asked regardless of your answer to the length of lease term question before.  However, particular attention should be paid to these answers if you are unable to enter a long-term lease.

In what other ways are you willing to promote tenure confidence?

1.  Adopt lease provisions that reduce future transaction costs.

Selecting this option requires additional time and effort in terms of negotiation and development of your farm lease agreement.  However, this increased planning, primarily in regard to notice of termination provisions and clauses for renewals or extensions of the lease, can reduce future transaction costs in terms of time and money and can also extend a lease arrangement in a smooth, non-confrontational manner.  This encourages the continuance of the existing lease arrangement and creates a more trusting landlord-tenant relationship.

2.  Increase communications with your tenant.

Both the amount and content of communications can effect your tenant’s confidence in your committment to continue the lease arrangement and their motivation to adopt sustainable farm practices.

3.  Reimbursement for Improvements

This does not necessarily promote a tenant’s confidence in their time on the land, but it does help assure that investments will not be lost when lease does terminate.  A tenant is unlikely to invest in improvements that will not show a return before the lease terminates.  A provision requiring reimbursement for approved improvements can change this.