Common use of Flexible Cash Lease Clause in Contracts

Flexible Cash Lease. In a flexible cash lease, the rental payment varies each year with the price of grain, thus the risk of any change in grain prices is shared with the landowner. Compared to cash leases, these agreements do not require periodic renegotiation when grain prices change. Considerations:  The tenant has greater independence in decision making than a crop share lease.  The risk of changes in grain prices is shared with the landlord.  The results of a tenant's superior farming skills are not shared with the landlord.  The landlord's rent is guaranteed in relation to quantity, but not to the price of grain.  Leases with longer terms can be negotiated, thus encouraging the use of better farming practices.  The tenant assumes all risks in crop production.  The landlord has less influence on the tenant's management.

Flexible Cash Lease. In a flexible cash lease, the rental payment varies each year with the price of grain, thus the risk of any change in grain prices is shared with the landowner. Compared to cash leases, these agreements do not require periodic renegotiation when grain prices change. Considerations:  • The tenant has greater independence in decision making than a crop share lease.  • The risk of changes in grain prices is shared with the landlord.  • The results of a tenant's superior farming skills are not shared with the landlord.  • The landlord's rent is guaranteed in relation to quantity, but not to the price of grain.  • Leases with longer terms can be negotiated, thus encouraging the use of better farming practices.  • The tenant assumes all risks in crop production.  • The landlord has less influence on the tenant's management.