Iowa has recognized the possibility of an implied covenant of good husbandry and has recognized a duty of stewardship to the land, although, it has not established what such a covenant entails.[1]  There is common law in Iowa addressing good husbandry provisions that are expressly included in written leases.  However, the potential protective capacity, in relation to the sustainability of the farm operation, provided by a covenant of good husbandry, whether implied or express, is unclear.

What is a Covenant of Good Husbandry

Good husbandry has typically been measured by a community standard.  However, the community standard can be elusive.  It appears this standard does not necessarily require the farmer to use those practices most often employed in the community or those that are in accord with responsible stewardship of the land.  The Iowa courts have accepted the notion there are many right ways to farm,[2] and have been reticent to require farm practices beyond those of the average tenant farmer.[3]  Thus, where farm practices might not be the preferred method in the community, they might still be considered as accepted by the community.

Further, good husbandry does not necessarily mean farming with sustainability as a principal priority. While stewardship is likely a part of the practice of good husbandry, short-term production is another important aspect.  Further, the production aspect of good husbandry, particularly as based on the contemporary customs of the community, has perhaps increased in significance during the last few decades.  Indeed, what has been considered acceptable farm practices may create harmful effects beyond those allowed by Iowa statute.[4]  For instance, soil loss limits have been established by soil conservation districts across the state,[5] but methods of farming that cause erosion beyond these limits might be considered accepted farm practice.[6]

It is possible the covenant could be used to require practices that increase yield, but negatively impact sustainability.  While at least in a cash rent arrangement, the Iowa Supreme Court has held the purpose of a good husbandry provision is mandating the proper use of land rather than requiring high yields,[7] it might be possible for a court to come to a different conclusion regarding a crop-share lease, where the benefit provided the landlord is dependent on the yield.[8]  Thus, the covenant of good husbandry does not necessarily result in a standard that requires practices resulting in the sustainability of the soil itself, let alone the sustainability of the broader community and environment at large.  This is an important consideration, particularly for a landlord, to pay close attention to before committing to a lease.

It should also be noted neither an implied or express covenant of good husbandry allows a landlord any degree of managerial control over the tenant’s practices.  The courts have upheld a landlord’s right to include provisions establishing limitations on land use and requiring particular farming methods.[9]  However, they have also held that a general covenant to use proper farming methods does not give “a landlord a concomitant right to ‘control and supervise’ a tenant’s farming practices.”[10]  In fact, while the intent of the parties is the primary indicator of a relationship, a landlord’s exertion of managerial control over the operation or the tenant might alter how the courts view the relationship created by the parties, perhaps considering it a partnership or employer-employee relationship and altering the duties and possible liabilities of each party.

Practical Considerations

The lack of an explicit adoption of an implied covenant of good husbandry from the courts, as well as the possible dual nature of good husbandry, based both on stewardship and production, underscores the importance of written provisions within a lease agreement.  This includes a general provision regarding good husbandry with more specific provisions relating to sustainable practices and establishing a higher standard than that of good husbandry as based on the average tenant farmer in the community.

The remedies for a breach of an agricultural lease are discussed further in the section specifically addressing this issue in Iowa.  However, it is worth noting issues involving termination for a violation of the covenant of good husbandry.  As mentioned in the section on farm lease notice of termination requirements, Iowa Code Section 562.6 states that termination does not require notice when there is a default in performance of the lease agreement terms.  However, it is unclear, at least as related to violations of good husbandry provisions, what rises to the level of allowing immediate termination.[11]  Further, where a covenant of good husbandry is found to be breached in a tenancy for a term of years, the court will likely allow termination prior to the end of the lease term but might not allow termination during the crop year.[12]

Thus, where possible, it may be prudent to provide notice of the breach and, if necessary, of termination in the event of a violation of a covenant of good husbandry.[13]  The landlord should first notify the tenant that their practices are not in compliance.  If the tenant does not alter their practices, notice of termination should be in compliance with the statutory requirements where possible, and, where not possible, such as after September 1, the notice should be given in a manner that does cause undue hardship to the tenant.[14]

A Stewardship Based Covenant of Good Husbandry

It should be noted an argument has been made that Iowa courts recognize an implied covenant of good husbandry more closely aligned with conservation and stewardship practices, regardless of what may be deemed “acceptable” in a community.[15]  This argument, made in the Moser v. Thorp Sales Corporation dissent, relies heavily on the state’s interest in protecting its natural resources.[16]  Chief Justice Reynoldson quotes both the Iowa Supreme Court and the legislature to establish agriculture, and therefore, the protection of the soil, as of the “utmost importance” to the state and within the state’s right to protect.[17]  The Chief Justice goes on to state that where damage is established on hilly farmland, methods not classified as conservation practices should not be deemed “acceptable.”[18]  This sets forth the basis for recognition of an implied covenant of good husbandry more in line with sustainability by measuring farm practices not on what is accepted, perhaps by a minority of farmers in a community, but on a duty of stewardship.

[1] See Brown Land Co. v. Lehman, 112 N.W. 185, 188 (Iowa 1907) (recognizing a complaint of a breach of a covenant, which was not found in the lease agreement, “to farm the premises in a husbandlike manner.”); see also Thompson v. Mattox, 695 N.W.2d 505, (Iowa Ct. App. 2007) (in holding that a duty of good husbandry does not give a landlord a general right to supervise and control a tenant, “a tenant may have a general duty to use proper farming techniques.”).

[2] Thompson v. Mattox, 695 N.W.2d 505, (Iowa Ct. App. 2007).

[3] Green v. Kubik, 239 N.W. 589, 592 (Iowa 1931).

[4] Moser v. Thorp Sales Corp., 312 N.W.2d 881, 904-905 (Iowa 1981) (Reynoldson, J., dissenting).

[5] Iowa Code § 161A.43 (2009).

[6] Moser v. Thorp Sales Corp., 312 N.W.2d 881, 904-905 (Iowa 1981) (Reynoldson, J., dissenting).

[7] Landas Fertilizer Co. v. Hargrave, 206 N.W.2d 675, 678 (Iowa 1973).

[8] The holding of the courts of other states that a covenant of good husbandry exists specifically in the context of a crop-share lease emphasizes the greater importance placed on productivity in the crop-share arrangement.  See Shultz v. Ramey, 328 P.2d 937, 940 (N.M. 1958) (specifically stating that a covenant of good husbandry exists when the lease arrangement is on a crop-share basis).

[9] Quade v. Heiderscheit, 391 N.W.2d 261, 264-66 (Iowa App. 1986).

[10] Thompson v. Mattox, 695 N.W.2d 505 (Iowa Ct. App. 2007) (citing Meeker v. Shull, 17 N.W.2d 514, 517 (Iowa 1944) and McElwee v. Devault, 120 N.W.2d 451, 452 (Iowa 1963)).

[11] Iowa Code § 562.6 (2009); McElwee v. DeVault, 120 N.W.2d 451, 454 (Iowa 1963) (holding the conduct of the tenant violated the express covenant of good husbandry in the lease, but also stating the conduct would not justify the landlord terminating the lease in the middle of the crop year).

[12] McElwee v. DeVault, 120 N.W.2d 451, 454 (Iowa 1963) (“Even though the conduct . . . may not have been such as would justify a landlord in terminating the lease in the middle of a crop year and ousting the tenant with the hardships and difficulties resulting from such action, the tenants operations were such that the landlord should not be required to put up with them for two more crop years.”).

[13] McElwee v. DeVault, 120 N.W.2d 451, 454 (Iowa 1963).

[14] McElwee v. DeVault, 120 N.W.2d 451, 454 (Iowa 1963).

[15] Moser v. Thorp Sales Corp., 312 N.W.2d 881, 904 (Iowa 1981) (Reynoldson, J., dissenting) (“There is a strong public policy that should cause courts to scrutinize carefully testimony that farming practices are ‘accepted’ when general experience and knowledge relating to the natural effect of wind and water on exposed soil red-flag the danger of soil erosion.”).

[16] Moser v. Thorp Sales Corp., 312 N.W.2d 881, 904 (Iowa 1981) (Reynoldson, J., dissenting).

[17] Moser v. Thorp Sales Corp., 312 N.W.2d 881, 904-905 (Iowa 1981) (Reynoldson, J., dissenting).

[18] Moser v. Thorp Sales Corp., 312 N.W.2d 881, 905 (Iowa 1981) (Reynoldson, J., dissenting).