by Greg Flax
Every winter, I meet with farmers who were surprised by a landlord’s decision to rent his or her farm to a new tenant for the upcoming year. Often, the farmer and landlord had worked together for many years with nothing more than a “handshake agreement” and a mutual expectation that their relationship would endure for many years.
But under Ohio law, an oral agreement to rent farmland is a year-to-year lease that terminates at the end of each year unless the parties agree to an extension. At least one Ohio Appellate Court has held that the landlord is not obligated to give any advanced notice that a year-to-year farmland lease will not be renewed. Mark v. Long, 2009-Ohio-581, ¶ 12 (4th Dist.)
Farmers and landlords who want to enter into multi-year relationships are well-advised to put their agreements in writing. Unfortunately, though, poorly-drafted or defectively-executed written agreements can be difficult or impossible to enforce in court. For example, written lease agreements for more than three years – and leases for three years or less that include automatic renewal provisions – must be notarized or otherwise comport with the attestation and acknowledgement requirements of Ohio’s Statute of Conveyances. R.C. §§ 5301.01 – 5301.08. A lease that is defectively-executed under the Statute of Conveyances may be treated as year-to-year lease and unilaterally terminated at the end of the year without advance notice to the other party.
Break-ups between farmers and landlords can get really messy when farmers get late notice of lease termination; after they have started to prepare for the following year by buying seed, spreading fertilizer, or tilling the fields. At that point, the parties may have little choice but to get their attorneys and the courts involved to determine whether the farmer is entitled to have his input costs reimbursed under the doctrine of unjust enrichment or entitled to have the lease extended for another year under the doctrine of part performance.
Fortunately, problems relating to unexpected lease termination can be avoided, in many cases, if farmers and landlords enter in a well-drafted and properly-executed written leases at the outset of their relationships. Good written leases can clarify expectations between the farmer and the landlord, reduce the potential for misunderstandings, and provide peace of mind for both parties.
Greg Flax is a attorney who represents farmers, landowners, and agribusinesses throughout Ohio. For more information about Mr. Flax and his practice, visit www.flaxlawllc.com, email [email protected], or call (937) 390-5979.
This article is for informational purposes only and does not constitute legal advice.