Updated: Jul 9, 2020
This post should not be relied upon as legal advice.
Before we start, let’s take a minute for a little review: the goals in leasing a house and farmland will be different. One is a place of residence and the other is a place an agricultural operation takes place on. Goals in a residence leasing relationship will be different than those in a lease for farmland.
You should not laugh. Many new producers and new landlords make the common mistake of thinking they can just use a form residential property lease to rent farmland. When it comes to renting each of these, not all form leases are the same. Form residential leases and form farmland leases are each designed to achieve different objectives.
The first big difference between a residential lease and a farmland lease is the amount of notice required to terminate. Typical residential form leases will require 30 days, 60 days, or maybe even 90 days’ notice to terminate the lease. The Maryland Code sets notice of termination of agricultural leases at 6 months. If you use a residential lease with a shorter termination period, then that period will overrule the period set in Maryland law. In other words, you would go from 180 days to 30, 60, or 90 days (depending on the language in your residential lease).
Second, a residential lease is not going to address concerns agricultural landlords and tenants often have. If you are raising livestock, will a form residential lease address how to split fencing costs? If you are raising a commodity and using irrigation, will the residential form lease address how to split irrigation repair expenses? What if the lease is terminated prior to the agricultural tenant being able to harvest a growing crop? For more information on this see Frequently Asked Questions: Do I Have the Right to Growing Crops When the Lease Terminates?. As you are can see, residential form leases often do not address the problems seen on farmland.
If you are a new landlord or a new producer, where can you find form agricultural leases? We have form leases available in Agricultural Leasing in Maryland and you can find fillable forms on our Forms page. You can also find form leases and guides for those leases on aglease101.org. You can also consult with an attorney to develop a farmland lease which will work for your situation.
Now a residential lease does have some uses on farmland. If there is a house on the property and the plan is to lease it out to either the farmer or another tenant, then a residential lease has a use. Here a lease geared towards a residence would address many of the issues seen in leasing a home. If the farmland and the house are being leased to the same person, then you should potentially consider setting a common timeframe to give notice to terminate. Again, consult an attorney to make sure that any form lease works for your situation.
We also have a quick video overview available on this issue: