Land Rent

[dlbuck]

You already know the answer or you wouldn't be asking.

I know a answer but, not all the answers that is why I asked the question.

 

[GermantownGreen]

That would be a tough call for me too. IMO it boils down to business is business and friendship is not.

Folks. We don't know what extras this neighbor provided to Dad..... Just throwing that idea out... Have a genuine conversation with the person, don't be so quick to judge.... GG Wes

 

[Tony in SD]

It is not unusual for the kids of a passed parent to change the terms of the lease. I would be surprised if the renters aren't expecting something to change. Personally if it was me, I would have a sit-down with the renters and work out the new terms to the lease. Even if it is only a name change.

 

[scootergmc]

My Father has just passed away. He has 80 acres of farm land he rents to the next door neighbor. As we are going threw his things we have found out he has rented the land to him for about a 1/3 of the going rate for maybe 20 years. This is in south central Minnesota if that matters. We have extended family that farms and have said they rent from people that want less rent and they advise them they will pay the going rate to honest and fair. The neighbors and my parents have lived on the same road for over 70 years. I do NOT want any back pay, I just would like some input on how you feel about this, I could rent this land to the relatives at the going rate with just a phone call in less than a minute. The renters would not miss a Sunday at church but, seem to skip the rest of the week. As I said I do not want any money as my Father made the deal with them, just want some opinions. As they say your neighbors land only goes for sale once in your lifetime, and I would like to make sure he does not get it. Thanks rant over.

Sorry to hear about your father.

But here's what I don't understand- From what I read there is nothing legally binding this land to the current tenant, correct? And you have full legal control over the land now? The only opinion you give of the tenant is the skipping of church the rest of the week. I'm not sure what you mean by that. Do you have a negative opinion of them? Do they not pay? Why do you want to make sure the tenants don't get the land? Is it for sale? Is it in probate? Are you executor of a trust?

Honestly I'd be more hesitant to rent to family than renegotiate with the tenant with a legally binding lease. Families and money tend not to mix well, liberties can be easily given and taken until bridges are burnt. But again, I don't feel like we have the full story or your full feelings.

 

[MarkB_MI]

A year-to-year lease would be unheard of in some parts of the country. Out on the high plains a three-year lease would be the minimum, with most renters insisting on a minimum of five years. A good renter is going to invest a lot of money in the land, and will want to be able to farm it long enough to recoup that investment. Is there some sort of crop rotation? If so, it's only reasonable to allow the tenant to complete that rotation. But you should immediately notify the tenant that you don't believe the rent current rent is adequate; that may be enough for them to offer a higher rent. Of course you still have the option to rent to someone else.

By all means draw up a lease with whoever you rent to. Many renters will have a lease they prefer to use. Most state extension agencies will provide a sample lease as well.

You can check current farmland rents in your area using the USDA Quick Stats database. Select "Sector:Economics", "Commodity:Rent", the appropriate rent type under "Data Item"; the rest should be self-explanatory. (Note that the statistics are based on self-reported information from farmers. We all know that farmers are the salt of the earth and would never fib to Uncle Sugar, but just the same I would treat this information as less than 100 percent accurate.)

Quick Stats

 

[Stroby]

Dealing with the affairs of an estate can be uncomfortable at times. And unless there are documents to go by to guide your decision, your best discretion is your guide. If your dad wanted to give the neighbors a good deal, well he did. But no one can judge tomorrow based on yesterday. New management is now in control, and is responsible for making decisions today. Talking to the current tenants would be my first step. Maybe they are well aware that they have been paying well below market value, and your father simply didn’t want to charge them more. We don’t know the circumstances of the type of farming taking place. Possibly your dad didn’t want a lot of spray or fertilizer put on his land, or maybe wanted specific crops to be grown? But that was his decisions, now these don’t apply, you have to make the decisions you feel are right and fair to everyone involved.

Well said Bruce, very well said.

 

[NY 986]

A year-to-year lease would be unheard of in some parts of the country. Out on the high plains a three-year lease would be the minimum, with most renters insisting on a minimum of five years. A good renter is going to invest a lot of money in the land, and will want to be able to farm it long enough to recoup that investment. Is there some sort of crop rotation? If so, it's only reasonable to allow the tenant to complete that rotation. But you should immediately notify the tenant that you don't believe the rent current rent is adequate; that may be enough for them to offer a higher rent. Of course you still have the option to rent to someone else.

By all means draw up a lease with whoever you rent to. Many renters will have a lease they prefer to use. Most state extension agencies will provide a sample lease as well.

You can check current farmland rents in your area using the USDA Quick Stats database. Select "Sector:Economics", "Commodity:Rent", the appropriate rent type under "Data Item"; the rest should be self-explanatory. (Note that the statistics are based on self-reported information from farmers. We all know that farmers are the salt of the earth and would never fib to Uncle Sugar, but just the same I would treat this information as less than 100 percent accurate.)

Quick Stats

Not that I have ever been a part of it but I have always suspected there is quite a bit of rent going under the table. Always seemed to be quite a few people "very happy" getting half of the area market rate. Is the buddy seat in the tenant's tractor or combine that comfortable? Just within the last several months a neighbor told me how happy he was getting half of the going rate. And not from an operator's wife who would make a few hundred dollars worth of meals per week for them.