Agricultural Economics Department
Date of this Version
2-27-2008
Abstract
Rising crop prices have led many landlords to seek renegotiation of lease terms, particularly cash rents. Most Nebraska leases are unwritten, which means that notice of termination must be given six months in advance, usually by August 31. If the landlord cannot terminate the lease, the landlord cannot require the tenant to renegotiate the lease in order to avoid lease termination. However, smart tenants would renegotiate the lease with the landlord in order to keep the lease longer. If a tenant refuses to renegotiate, the tenant could lose the lease after the current crop year.
Many farm leases, especially those between family members, are not written but are verbal "handshake" agreements. Because nothing is in writing, the parties may have different recollections of their agreement, making lease disputes more difficult to resolve. The most common legal issue associated with verbal farm leases is how a lease may legally be terminated. For unwritten leases, six months advance notice must be given to legally terminate the lease. In contrast, the termination of a written lease is determined by the terms of the written lease. If nothing is specified, a written lease terminates automatically on the last day of the lease with no automatic renewal.
Comments
Published in Cornhusker Economics, 02/27/2008. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln. http://www.agecon.unl.edu/Cornhuskereconomics.html