Being sure that all necessary parties are named in the lease agreement is essential to ensure that the lease is legally enforceable and binding should an issue arise.

• Who are the people or parties involved?
• Is everyone who needs to be represented at the table?
• Are they acting in their personal capacity or on behalf of something else? For example, is the landowner or tenant a business, such as a farm LLC? Is the land owned in trust, such as through a family trust?
• If the farmer-tenant is in the Midwest and operating the business through an entity, have you checked into your state’s anti-corporate farming laws?

Including some overarching goals or objectives of each party can be helpful for the parties to reflect upon and revisit the purpose of the lease. It can help substantiate the value that each of the parties are getting, which is a necessary element of a legally enforceable agreement. Each party must give and get something of value in exchange, which in legal lingo is called “consideration.” Setting forth the goals can be particularly helpful in a lease involving agroforestry, where the rental price may be below the market rate given the landowner is also benefiting through the ecological system improvements and potential increased land value over time.

• What does the landowner seek to gain through the lease agreement?
• What does the farmer seek to gain through the lease agreement?

The description of the land needs to be precise and accurate. It’s best to include a map with the borders clearly marked, particularly if the land subject to the lease is part of a parcel (such as 10 acres of a 20-acre piece of land).

• Exactly what land is being leased?
• What is the precise legal description?
• Is it an entire parcel, or part of a parcel?
• If it’s part, how can you best describe and mark the boundaries (e.g., a map or pictures of corner markers or landmarks)?

Your state may have restrictions on how long a long-term lease can be. Some states allow up to a 99-year lease while some have stricter rules. The following table lists states that have laws specifying the maximum length of agricultural leases. Generally, if a lease is longer than the number of years specified, the arrangement will be treated as a full land transfer for tax or other purposes. If your state is not listed, be sure to confirm with an attorney as some restrictions may still apply through case law developed by the courts.

• How many years is the lease?
• Is it under the number of years allowed under your state’s law?
• What is the precise start date?
• What is the precise end date?

Most long-term leases require action for renewal. In other words, the lease will end on the date selected unless the parties agree otherwise. But you can determine your own renewal process.

• Does the lease renew automatically or do specific steps need to be taken by either party?
• If it doesn’t renew automatically, what steps need to be taken (e.g., notify each other within three months before the end of the lease)?
• If it renews automatically, when and how does either side give notice that they don’t want the lease to renew?

The parties will need to determine a method or basis for determining a reasonable rental amount. This involves much more than deciding upon a price.

Type of rental arrangements

A primary question is whether the arrangement is a cash rent or crop share arrangement, or a hybrid of the two. In short, a cash rent arrangement is a set amount for a set period (e.g., $500 a year). A crop share arrangement is where the rental amount is somehow tied to the profits, revenue, or some other aspect of the farming operation (e.g., landowner shares 20% of profits/losses each year).

Sometimes the rent amount is even tied to the yield or harvest of the crops, which is provided as an in-kind payment. Either way, the landowner has a stake in the venture. A hybrid arrangement is where there’s some set amount, but there’s a “bonus” that’s also tied to the profits (e.g., landowner gets $200 a year and shares 10% of the profits/losses). For more on the financial and tax implications of each of these arrangements, see the discussion in Section 2 Q&A—What are the tax and other financial implications for the landowner in receiving rent payments?

The rent arrangement, and ultimately rent amount, will likely be tied to the values and objectives that each party aspires to get out of the lease arrangement. It can be helpful to first discuss each party’s aspirations and intentions. The arrangement will also depend on who provides what inputs at the outset. If the landowner is sharing in the upfront cost of the trees, it may make sense to have the rental amount be a higher. Or, it may be tied to the profits (i.e., a crop share arrangement). If the tenant is fronting the costs, the rental price may be less as it could be a way to account for this upfront investment that will potentially benefit the landowner through improved land value.

Deciding on a rental amount

It can be helpful to look at comparable rental rates for agricultural land in your area to determine the initial and revised rental amounts. However, leases involving agroforestry practices are unique. They encompass other values than an amount paid in rent, such as enduring ecological benefits and established yields with mature trees and perennials.

The agreed-upon rent arrangement and amount will likely depend on how the parties address other issues that are addressed later in this checklist, such as how the value of the trees is accounted for through the duration of the lease. Does the landowner or tenant “own” them? Does the tenant have the right to remove the trees at the end of the lease? It may be best to jot some ideas down now and then come back to revisit the rental arrangement and amount once all the other details of the lease are finalized.

Benefits of including a rent adjustment protocol or escalation clause

It’s often common for long-term leases involving a cash rent arrangement to include a rent adjustment protocol, which is often called an “escalation clause.” This requires the parties to revisit the rental amount at a certain time or times during the lease. This makes a lot of sense when the lease runs such a long period—say 99 years—as the price will certainly fluctuate. The assumption is that the price will go up, as it generally does, hence the term escalation. But an escalation clause typically allows for either an increase or decrease.

From a legal perspective, an escalation clause can be very helpful if not necessary for the validity of the agreement. It helps establish what’s called “legal consideration”—or mutual benefit—throughout the duration of the lease. Consideration is necessary for any contract to be enforced by a court. If the rental amount becomes so low as compared to going rates, a court could say it’s not a fair arrangement. While this is unlikely, including an escalation clause helps the parties play it safe. It’s also in both parties’ best interest as the market could go either way.

With that said, including an escalation clause or protocol for adjusting the rent price may not be necessary or desirable for a 5- or even 10-year lease, as the price may not fluctuate too much within that relatively short time span, and the parties may not want to have to deal with it. Nevertheless, it’s advisable for longer leases. While there’s no clear cutoff for when it’s necessary, it’s best to include some form of an escalation clause for leases longer than 10 years.

One common form of an escalation clause is to tie periodic rent adjustments to an objective standard. An objective standard will ensure that rent amount adjustments are rationale and not random. Often escalation clauses for long-term commercial leases are tied to the Consumer Price Index (CPI), which measures the loss or gain of the dollar. However, the CPI is not as accurate for rural agricultural leases as the CPI reflects urban purchasing and does not account for discrepancies in rural areas. Instead, the parties may want to use an agricultural commodities index, going rental rates in the area, the value of the land being leased based on a third party appraisal, a percentage of annual revenue of the farming operation, or some other objective standard.

Another option is to increase the rent by a fixed rate that’s established at the get-go. This is called a stepped rent. For example, the rent amount could increase by $100 every five years. While this approach is simplest, it can be risky as it doesn’t account for actual fluctuations in the market.

Setting a time period to revisit and renegotiate the rent price is another option. For example, “Every 5 years the rent amount will be revisited.” However, this might make the arrangement vulnerable if the parties can’t agree in the future. The parties could agree that a third party will determine the rent for the next year if the parties are unable to decide. But this costs time and money.

Another option is to not include an escalation clause but rather require the tenant to agree to pay for certain capital improvements over the duration of the lease. The tenant is thereby investing in the property, or paying for something that the parties both value. This could make up for what may be considered a “low rent” later down the road. Such capital improvements could include maintaining access roads, drainage, perimeter fencing, and so on. In an agroforestry lease, such improvements could include the quality of the soil and the mature trees and perineal crops. If the parties choose to take this approach, it’s best to include a provision somewhere in the lease agreement that highlights the parties’ recognition of this added value over time.

When it comes to escalation clauses or rental adjustments, it’s up to the parties to decide what they feel most comfortable with. Note that crop share and flexible cash lease arrangements often include a natural rent adjustment. In both cases, the value of the farm’s productivity and the yearly fluctuations in crop prices are inherently bound to the rental amount each year. For a crop share, the landowner receives a specified percentage of the crop and thus there is no need for yearly renegotiations of the rental amount. The same holds true for flexible cash leases, which base the rental amount on yield, the market price for the commodities raised, or both.

• What is the type of rental arrangement—cash rent, crop share, or a hybrid of the two? For more details on each, see Section 2 Q&A—What are the tax and other financial implications for the landowner in receiving rent payments?
• If it is a crop share or hybrid lease, how is the profit-sharing calculated and allocated (i.e., what percentage of revenue/profit goes to the landowner and what goes to the farmer)?
• If it is cash rent or hybrid, what is the initial rent amount?
• Is the rent amount ever revisited (i.e., escalation clause)? If so, when and how often? What is the objective basis of the rent change (e.g., commodities index, rental price in the area, consumer price index)?
• When is the rent due (annually, quarterly, monthly, other)?
• How should rent be paid (e.g., cash, check, direct deposit, and to what address or bank if not in person)?
• Is there a late payment fee? If so, what is it and when is it assessed?
• If the farmer-tenant’s voluntary conservation practices increase the value of the land, should the farmer’s rent be reduced accordingly? Or, is there another way to reward the farmer?

The property could very well change hands at some point in the duration of a long-term lease. This could be to an heir if the landowner dies, to a buyer if the landowner decides to sell, or a bank if the land is repossessed. These are all scenarios that the parties need to contemplate, even if they in no way anticipate them happening at the get-go. Most farmers will want to make sure that any future landowners are bound by lease. If this is true in your situation, it’s best that the lease explicitly say as much.

The lease should also specify that the farmer can record the lease in the relevant county or public office. The official recording process helps ensure the binding effect of the lease on future landowners. That’s because it officially notifies future landowners that the land is subject to the lease. Many states have laws that require longer-term leases to be recorded. In some cases, leases as short as one year are required to be recorded to have a legally binding effect. Farmers who want to play it safe should take the time to record their lease. Typically, the recording process requires a fee, which is often linked to the number of pages of the lease being recorded.

• If the landowner dies, is the lease binding on her heirs?
• If the landowner sells the land, is the lease binding on the new landowner?
• May the tenant officially record the lease?

The parties need to decide what will happen if the farmer dies or no longer wants to farm the land—whether because he falls ill, gets sick of farming, or something else.

• If the farmer dies, does the lease automatically transfer to his heirs?
• If the farmer decides to stop farming the land, can he transfer the lease to someone else (i.e., “assignment” in legal lingo)?
• Are there any restrictions on assignment of the lease, such as does the farmer first need written consent of the landowner?

A sublease is different than a full transfer or assignment. A sublease simply means that the tenant allows someone else to occupy or use part or all of the land that is subject to the lease for a set period of time. Perhaps the farmer just wants to take a break. Or, perhaps the farmer wants to sublease a portion of the property for a few years, because he realizes it’s too much for him to handle all at once. The person who enters the sublease is bound by the terms of the original lease.

• If the farmer wants to take a break or let someone else use a portion of the premises, can the farmer sublease all or any portion of the premises?
• Does a sublease require written consent of the landowner?

Long-term leases often provide the tenant what’s called a “right of first refusal” or “option to purchase” the land if the landowner decides to sell. This way, if the landowner receives an unsolicited offer or decides to sell the land, the farmer would have an opportunity to buy it himself. If the parties decide that the lease will be binding on future landowners, the farmer can continue the lease if the land sales and he chooses not to purchase it.

• Does the farmer have a “right of first refusal” or “option to purchase” the property if the landowner decides to sell?
• If so, what are the details of this arrangement? How will the land be valued and what is the procedure for exercising the right or option?
• Is the lease convertible to a land contract (i.e., past rental payments will be allocated to the purchase price)?

While it may seem tedious, the parties should create an exhaustive as possible list of all the activities that the farmer is allowed and not allowed to do. This will help prevent any discrepancies or confusion down the road. The parties should be sure to confirm that all permitted uses under the lease are allowed by the county zoning code where the land is located. The parties can either review the code themselves, or consult with an attorney. The zoning code is generally available online or at the county library. Here are a few issues the parties should consider to get started:

• Is the lease limited only to agricultural use of the property? If so, what all is included in “agriculture”?
• Must the farmer follow production standards for the agricultural use of the premises, such as a requirement to follow organic practices?
• Are there limits on the type of agricultural production allowed (e.g., crops and livestock)?
• Is the farmer allowed to engage in any commercial use of the property?
• Are agritourism or special events allowed?
• Can the farmer do any value-added processing on the premises?
• Is the farmer permitted to live on the property? If so, would the parties prefer to handle the residential lease separate from the commercial farmland lease? (Recommended.)
• Is the farmer permitted to hunt on the property?
• Is the farmer permitted to camp or allow others to camp on the property?
• Are there prohibited activities such as planting of GMOs, aerial spraying, etc.?
• Are there any restrictions or requirements for point of access and parking?
• What about other uses or activities that are important to the parties?

The parties need to consider the various standards and land use practices that they want each other to follow. It may be that the landowner mandates certain practices, such as following organic standards or forbidding GMOs. It may also be that the farmer mandates that the landowner abide by certain practices. If, for example, the farmer leases 10 acres of a 20-acre piece of property for 99 years and he wants to obtain organic certification, the farmer would want to be sure that the landowner does not do anything on either the adjacent property or the area leased to impact the organic certification. The following line of questions provides some examples of land use standards and practices the parties may want to consider including:

• Are there any production standards that either or both parties must follow (e.g., organic standards, no aerial spraying, etc.)?
• Are there animals involved? If so, are there animal husbandry practices that either or both of the parties must follow?
• Are there any specific standards for weed or disease control that either or both parties must follow?
• Are there any specific standards for pest control that either or both parties must follow?
• Are there any land stewardship practices that either or both parties must follow?
• Do the parties want to participate in a land conservation or stewardship program (e.g., through the USDA Natural Resources Conservation Service (NRCS) or other state program)? If so, who pays for any costs incurred? Who benefits for any payments received from the program?

With a long-term lease, the farmer very well may want to make improvements to the property. Improvements could include constructing or remodeling outbuildings, installing irrigation systems, building hoop houses or a greenhouse, erecting fences, and adding or bolstering other infrastructure. Some of these improvements may be considered “temporary” in that they could feasibly be removed, while others may be considered “permanent” in that their removal would cause permanent damage. In an agroforestry lease, the parties may decide that the planting of trees should be treated as improvements, as over time the mature trees will contribute to the increased value of the property.

The parties will need to determine how these and other such improvements are accounted for throughout the lease as well as when the lease ends—whether early or on the termination date. The parties could decide that any and all improvements—whether temporary or permanent—belong to either the tenant or the landowner. Or, they could decide that temporary improvements belong to the tenant while permanent improvements belong to the landowner. Another option would be that all improvements belong to the tenant at first, and then at some point during the lease—whether on a given date or gradually over time—they revert to the landowner. For more on this reversionary interest concept, see Section 2 Q&A—How are the trees valued and accounted for throughout the lease?

How improvements are addressed will often depend upon the rent amount and who made the initial investment. For example, if the rent amount is low, perhaps the landowner gets to keep the benefit of the improvements (as part of legal consideration). Similarly, if the landowner invests in the agroforestry venture—for example, by purchasing some or all of the trees—perhaps the landowner has the right to the value in the end. Otherwise, the farmer-tenant may want to negotiate a fair way to be compensated for the increased value from these improvements that can’t feasibly be taken with him at the end—whether through a lower rent amount or through a cash out at the end.

Ultimately, the parties need to be sure to have clear expectations about improvements as this is ripe grounds for dispute in lease agreements. The inherent “improvements” with agroforestry ventures heightens this risk. When it comes down to it, the question is: who owns what at the end? Here are some overarching things to consider when it comes to improvements.

• Which improvements are considered temporary and which are considered permanent? Note that temporary improvements are generally things that can be removed from the land without causing damage, while permanent improvements are things that are so affixed that it is either impossible to remove them or doing so would permanently damage the land.
• How are temporary and permanent improvements handled?
• How is the value of an improvement determined?
• How is this value accounted for and divvied up throughout the duration of the lease?

The parties will also need to decide whether there are limitations and conditions on the tenant’s ability to make improvements. The landowner will often want the chance to review and approve any permanent improvement before it is built or added; after all, it is her property.

Finally, the parties will need to be sure that however they choose to handle improvements, it is done so consistently throughout the lease agreement. The issue of improvements could impact multiple aspects of the lease, including the rental amount and who gets what when the lease ends. Be sure to also see the checklist question near the end: What happens when the lease terminates, whether early or at the end of the term? The following line of questions is a good place for the parties to start thinking about how they want to handle improvements in an agroforestry lease.

• Is the farmer allowed to install “temporary improvements”? If so, how are temporary improvements defined (e.g., anything that can be removed without permanent damage)? What are some examples of temporary improvements (e.g., monitoring devices, removable irrigation systems, mobile fences, and other equipment)? Are trees considered temporary improvements?
• Can the farmer-tenant remove temporary improvements before the lease terminates? If so, can this be done at any time, or is there a certain point when temporary improvements become the landowner’s property? Are there any conditions or limitations for their removal (e.g., must repair any damages, must get written permission beforehand, must give landowner the option to purchase them prior to removing them)?
• If the tenant is not permitted to or chooses not to remove any temporary improvements, how are they accounted for at the end of the lease (e.g., tenant gets a reimbursement, they automatically revert to the landowner)? If the tenant gets a reimbursement, how is the value determined?
• Is the tenant allowed to install “permanent improvements”? If so, how are permanent improvements defined (e.g., anything that would result in permanent damage if removed)? What are some examples of permanent improvements (e.g., buildings)? Are trees considered permanent improvements?
• Are there limitations or conditions on installing permanent improvements (e.g., must get landowner’s written permission beforehand)?
• Can permanent improvements ever be removed? If so, what are the conditions or limitations?
• How are permanent improvements accounted for at the end of the lease (e.g., they automatically revert to the landowner, tenant gets a reimbursement for the value)? If the tenant gets a reimbursement, how is the value determined?

By definition, a lease grants the tenant exclusive rights to occupy and use a specific piece of property. The actual leased premises could include an entire parcel, or a delineated portion of the property. The landowner can, however, retain some rights to use or access some of the leased premises.

Let’s say both parties want to use the same exact premises for different purposes. The farmer wants to use it for planting and harvesting perennials, and the landowner wants to use it for allowing her farm animals to graze under the canopy. It may seem like a good idea to simply divvy up the property in a way that the lease applies only for the areas where the trees are and not the alleys where the animals graze. However, this would be complicated, if not impossible, to articulate and enforce. A better approach is to enter a lease with the farmer for the entire premises while reserving certain rights of use for the landowner. This will grant the farmer possession and use of the premises, while allowing the landowner access under certain conditions for certain activities. The lease would need to include several clauses to outline that relationship. In our example, it could specify certain times and places for animal grazing. It could also specify a protocol if the grazing harms the trees, such as the landowner must compensate the farmer for any damage done.

Keep in mind that if the landowner wishes to reserve substantial use of the premises, a lease arrangement may not be the best option. The parties may instead want to consider an easement or a license. For more details on the differences between these options, see Section 2 Q&A—What’s the difference between an agricultural lease and an easement? and What’s the difference between an agricultural lease and a license?

• Is the landowner granting an exclusive right to use the leased premises, or will the landowner also be using some or all of the premises for certain activities or purposes?
• If the landowner retains some rights to use, what are the specific uses or activities and areas affected?
• What potential conflicts might arise?
• How can these conflicts be managed (e.g., specify types of uses the landowner may engage in, include schedules, etc.)?
• If conflicts occur, such as property damage or lost revenue because of the other party’s actions, is the party who loses compensated in any way?

The parties will need to work out who pays for insurance, what types of insurance coverage are required, and what the premiums are. Types of insurance coverage could include crop insurance, liability insurance to cover injuries to workers or guests on the property, insurance for equipment or buildings, and so on.

• What types of insurance do the parties want to be sure to have in place?
• Who is responsible for maintaining the type(s) of insurance desired?
• Is the tenant added as an additional insured to the landowner’s policy, or does the farmer need his own insurance?
• If the landowner provides insurance, are there any coverage thresholds desired by the tenant (i.e., $1-5 million)?

Water can be a big issue in many if not all regions throughout the country. It would be a travesty if the farmer invested tons of money and effort only to lose the trees and perennials due to water shortages or misunderstandings. Farmers in particular should be sure that the water allocations are sufficient for their intended farming operation.

• Is water for irrigation provided in the lease?
• If so, how, and how much?
• If water usage is unlimited, what is the expected capacity of the well/ water supply?
• If there are volume limits, how is usage measured and accounted for?
• What happens if the water infrastructure breaks down or if the well runs dry (i.e., who is responsible for any repairs, is the farmer owed damages)?
• If the farmer chooses to install a well or irrigation system to ensure sufficient water supply, how is the cost incurred and value of improvement accounted for when the lease is terminated?

Often landowners have existing equipment as well as buildings on the premises or on an adjacent lot. There may also be natural resources such as timber. The parties should be clear upfront whether the farmer has a right to use these resources, and if so, whether there are any restrictions or requirements. It can be helpful to itemize the resources, or even have a separate facilities or equipment manual that provides more specific details on rules and restrictions that the farmer must abide by. This manual could be in the form of a separate agreement such as a memorandum of understanding or it could be a simple bulleted list of restrictions or requirements that the farmer initials and agrees to follow. Either way, it is a good idea to have something in writing.

• Does the farmer get use of any farm equipment or resources (e.g., timber, equipment, buildings, etc.) that may be on the property? If so, is there a schedule or protocol that needs to be followed? How will equipment breakdown and maintenance be handled? Who pays for maintenance and repair and when does it need to be performed?
• Does the farmer have access to any storage? If so, are there associated terms on storage use such as types of products stored or the timeframe for storage?
• Does the farmer have access to pack shed facilities or refrigerated storage?
• Is water for packing and processing provided in the lease? If so, where? Are any associated costs included in the lease agreement or are they separate?

Utilities are another key element that needs to be addressed upfront in the lease so the parties are clear on who pays what.

• Who pays for any utilities to the property such as electric, trash, etc.?
• If the party responsible for paying a utility bill misses a payment, can the other party pay it to prevent penalties? If so, how is that party compensated (e.g., tenant can deduct it from future rent payments if tenant pays)?
• If irrigation water is provided, who pays for the running of the pump and any repairs that may be necessary?

Similarly, the parties need to decide who is responsible for taxes. The parties could decide to share in the cost, or require one party to pay all. If the tenant pays the taxes, the rent is often reduced to account for this inherent cost, which can be a significant benefit to the landowner.

• Who is responsible for paying property taxes on the premises?
• If the party responsible misses a payment, can the other party pay to prevent penalties? If so, how is that party compensated (e.g., tenant can deduct it from future rent payments if tenant pays)?

Over the course of a long-term lease, the buildings, roads, and other large-scale capital elements of the land will inevitably erode. The parties need to determine who is responsible for the repairs and upkeep of any such essential capital on the premises.

• Who is responsible for large-scale capital improvements to the land (e.g., maintaining access roads, drainage, perimeter fencing, etc.)?
• When and how will needed capital improvements be assessed and completed?
• Who pays for the capital improvements (e.g., landowner, farmer, or both share in the costs)?

While the parties may initially believe that disputes will never happen, they can and do. It’s best that the parties consider upfront how they want any disputes to be resolved should they arise.

• How will the parties manage potential conflicts and disputes (e.g., required mediation, creation of a dispute resolution committee, straight to court, etc.)?

Early termination often happens when one party “defaults” or doesn’t follow through with a significant term of the agreement. If one party defaults, the other party can then terminate the lease. Termination could also occur from conditions outside the parties’ control, such as rezoning of the property or the government purchasing the property through eminent domain. The parties should consider what types of events will lead to early termination.

• Can the lease be terminated early by either party? If so, under what circumstances?
• Are there acts that you would like to designate as triggering a “default” (e.g., failure to pay rent by a certain time, using certain chemicals or practices)?
• Have the parties checked the comprehensive plan for the municipality? Are there concerns about potential rezoning of the property or neighboring development? What happens if the property is rezoned and agricultural or other permitted uses under the lease are no longer allowed?
• Is eminent domain a possibility? If so, how would the parties like to allocate any potential compensation provided under eminent domain in the future?

Whether the lease terminates early or at the end of the term, the parties need to be clear on what happens when the handover takes place.

• If the lease terminates early because of the fault of one of the parties, must the defaulting party compensate the other party for any damages? If so, how are these damages calculated (e.g., decide on a “liquidated damages” amount or equation upfront in the lease that specifies exactly what the damages are or how they are to be calculated should a default occur)?
• Are there any duties the tenant must fulfill when the lease terminates (e.g., plant cover crops, repair damage from removal of trees if permitted, etc.)? If so, must the tenant fulfill these duties regardless of how and when the lease is terminated (e.g., only needs to plant cover crops if the tenant defaults on the lease)?
• Must the landowner compensate the tenant for any increased land value resulting from improvements when the lease terminates (e.g., construction of infrastructure such as buildings and irrigation systems, improved soil quality, presence of mature perennials)? If so, must the landowner compensate the tenant for these improvements regardless of how and when the lease terminates (i.e., is the outcome different if the landowner defaults or if the farmer defaults)? If compensation is required, how will this amount be calculated (e.g., hire an appraiser to assess the value of the improvements, decide on a liquidated damages amount or equation upfront in the lease)?
• Does the tenant have the right to remove temporary improvements when the lease ends? If so, are there conditions or limitations (e.g., improvements can only be removed if it results in no permanent damage and/or tenant must repair or compensate landowner for any damage from removal)?

Regular communication can help the farmer and landowner avoid problems. Open and honest communication throughout the arrangement is essential. Depending on the history and personality of the parties, this may come naturally. However, it could be helpful to actually require communication at certain points¬—whether at particular times such as quarterly or annual meetings or for particular issues.

The parties also need to consider how they may go about amending the agreement. Things change. It may be that a party agrees to one thing, and later realizes that she or he simply cannot abide by the term. Rather than pushing the issue under the carpet, the better approach is to bring it up and address it head on. The parties can then discuss ways to change the agreement accordingly or otherwise alter the arrangement before it ends in a full-on dispute.

• Are annual or quarterly meetings appropriate? If so, when will they be held? What issues will be discussed at meetings?
• Are there specific issues that the parties agree to communicate about on an ongoing basis (e.g., machinery and equipment condition, animal health)?
• What’s the process for amending or changing the agreement?