A lease term between three and ten years provides time for the tenant to reap some of their investments in sustainable practices and improvements.  Of course, the longer the lease term the greater stake the tenant has in the sustainability of the property.  There are some additional considerations to think about when entering a lease for an extended period of years.

Addressing the Unknown

Entering a long-term lease forces both parties to think about their plans many years down the road.  While not all of the possibilities can be foreseen there are steps you can take to address potential scenarios.  The list below highlights some issues that should be considered in a long-term lease.  These consideration are addressed further throughout the “Landowner’s Guide.”  Click on a topic of interest to go straight to the chapter discussing that topic.

Integrating livestock can provide economic and ecologic benefits.

Additional Opportunities

Long-term Land Use Planning

A long-term lease also allows you to include conservation provisions that address land uses several years down the road.  While you always have this option, your tenant is likely to be much more willing to enter a lease with such provisions in a long-term arrangement.  Long-term planning can include establishing crop rotations, incorporating livestock into the farm operation, and entering sustainable nutrient management plans.

Opportunity for Retiring Farmers with CRP Land

The Transition Incentives Program (TIP) allows retiring farmers with CRP land to gain two years of additional CRP payments if the land is leased for a period of five years or more to a beginning or socially disadvantaged farmer for the purpose of sustainable agricultural production.  Click on the TIP link above for more information on program benefits and eligibility.

Long-term Lease Requirements

Written Agreements

As discussed in the first chapter of “The Landowner’s Guide,” farm leases for a period longer than a year typically have to be in writing.  This will depend on state law.  Most states, including Iowa, have this requirement.  There are exceptions, however.  Indiana, for instance, only requires leases for a period greater than three years be in writing.

Recording Statutes

You should also pay attention to the state recording statutes.  While it is a good idea to record your lease regardless of the duration, some states only require the recording of leases for a set period of years.  Iowa recording statutes require farm leases, or at least a memorandum thereof, of five years or more to be recorded.  Failure to record can result in the loss of lease rights to subsequent purchasers, and in some cases the landowner and tenant can be fined.