Airing January 4 - 17, 2006

Crop Land Lease Considerations

This is Ag Outlook 2005 on 1420 KJCK, I'm Chuck Otte, Geary County, K-State Research and Extension Ag & Natural Resources Agent. January is the month when most ag leases are reviewed by the landlord and tenant and adjustments made for the coming year. It is very important that these discussions take place by the 30th of January as that is the deadline by which legal notice has to be given to terminate an oral agricultural lease. If you don't have your lease renegotiated AND it is an oral lease, as most of them are, then the same terms apply as last year and either party can be held liable if they break the lease. There are several things that need to be discussed in these crop lease review sessions. More important than what the shares are going to be is to decide who is going to pay for what costs. This is becoming more and more critical as most producers have switched or are switching to less tillage. We are shifting fuel and machinery expenses, frequently a non-shared expense, for tillage over to chemical costs and applications costs which have often been a shared expense. Whether or not these burn down herbicide applications should be shared all depends on the shares of the lease. Shared or unshared are both acceptable as long as the shares of the crop equitably represents the shares of the expenses of that crop. And the same goes for any expense that it takes to produce that crop. Take some time to start pushing a pencil to determine if those shares are equitable. K-State has a good spreadsheet available to help with those calculations OR give me a call to set up an appointment when I can sit down with both parties and we can play some what if games! This has been Ag Outlook 2005 on the Talk of JC, 1420 KJCK, I'm Chuck Otte.

Pasture Land Lease Considerations

This is Ag Outlook 2005 on 1420 KJCK, I'm Chuck Otte, Geary County, K-State Research and Extension Ag & Natural Resources Agent. Up until a few years ago pasture leases were a bit of a gray area in regards to Kansas law. This was cleaned up a few years ago when the state legislature specifically set them to be the same as the crop land leases. In a nutshell, what this means is that notice to terminate (or not to lease a pasture again in the case of the tenant) should be given in writing 30 days prior to March 1st and setting the termination date as March 1st. Of course, if you have a contract in writing, then it is subject to different statutes and you can set any terms that you wish. Just as with crop land leases, I urge landlords and tenants to sit down in January and discuss their leases. Pasture leases have some very specific things that need to be discussed. For starters, what are the in and out dates and are their penalties for leaving cattle in too long? Who is expected to control the noxious weeds AND who pays for that. By law the landowner has ultimate responsibility. Don't just assume that the tenant will do it! What are the expectations for brush control and who's going to pay for it. Same thing for fences. Don't assume anything, talk about all of it. Is the pasture to be burned, or not? It sounds like a pretty simple thing, but there is a court case in process right now in the southern Flint Hills where the tenant asked if he could burn the pasture, the landlord said yes, but when all the cedar trees went up in smoke, the landlord sued the tenant because the landlord wanted to keep the trees for wildlife. A good lease starts with good communications. Pasture leases are no exception so let's get the conversations started and leave nothing to doubt. This has been Ag Outlook 2005 on the Talk of JC, 1420 KJCK, I'm Chuck Otte.

Landowner - Tenant relationships

This is Ag Outlook 2005 on 1420 KJCK, I'm Chuck Otte, Geary County, K-State Research and Extension Ag & Natural Resources Agent. One of the critical issues in any lease is good communications between the two parties involved. With agricultural leases, this is no exception and perhaps even more crucial since verbal leases are recognized as legal and binding by the state of Kansas. I don't know how many times I've had a land owner come in to talk to me with the conversation going something like, "That darn tenant planted milo this year and I don't like milo." When asked if they had ever communicated this with the tenant, the answer is almost always, NO! So we start talking about the landlords expectations of the tenant and the difficulty of the tenant meeting those expectations if they don't even know they exist. In general, I don't think that many of us really like lease negotiations. Most of us make it a point to avoid conflict and lease negotiations can often have conflict, even if it is minor. So the less said the better and then nobody knows what is expected or what the plan might happen to be. With lack of communication there will be conflict, or at the very least, dissatisfaction of one party or the other. January is a good time for the landlord and tenant to sit down, review the previous year and talk about the plan for the coming year. It is at this January meeting that each party has to state what their expectations are and what was good or bad about the lease this past year. And it is very critical for each party to be fully aware of the state statutes pertaining to ag leases. So you may want to stop by the office and pick up our updated bulletin on the Kansas Ag Lease law. This has been Ag Outlook 2005 on the Talk of JC, 1420 KJCK, I'm Chuck Otte.

Ag Lease Legal Considerations

This is Ag Outlook 2005 on 1420 KJCK, I'm Chuck Otte, Geary County, K-State Research and Extension Ag & Natural Resources Agent. Kansas has very specific laws regarding agricultural leases. Much to the disbelief of several of my lawyer friends, Kansas statutes recognize oral agricultural leases as legal and binding and as such issues special requirements for these. The first and most critical one has to do with tenure of the lease and termination of the oral lease. Once an oral lease has been decided upon, it will continue with those same terms until such time as proper notice of termination is given. Therefore, if either party want to renegotiate the terms of the lease, it must be done, and agreed upon, prior to 30 days before March 1st (January 30th this year). If the terms can not be agreed upon then the landowner can still serve notice of termination. Discussion after January 30th can occur, but can't be enforced until the following crop year. Sure, if both parties agree to the terms and no one is upset, changes could be made any time of the year. But if it goes to court, dates become very important!! Let's go back into that notice to terminate section a little bit more. The Kansas law is very specific that if no written lease exists, stating other wise, notice to terminate must be given in writing, at least 30 days prior to March 1st and setting the termination date of the tenancy as March 1st. If these three items are not met, the lease is not terminated. The one exception is that if wheat, or any fall seeded crop, has been planted then the tenancy on those acres is terminated on the day after the fall seeded crop is harvested or August 1st, whichever comes first. This information, and much more can be found in our recently revised Kansas Agricultural Lease Law bulleting available at the Ext. Office. This has been Ag Outlook 2005 on the Talk of JC, 1420 KJCK, I'm Chuck Otte.

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