SELECTING A LEASE AGREEMENT. Select an appropriate lease arrangement and adapt it to suit your particular situation. In a crop share lease, the landlord will receive a share of all crop sales. In a cash lease, the tenant will receive the income from all crop sales and will pay the landlord a fixed dollar amount for each year of the agreement. In a flexible cash lease, the tenant will receive the income from all crop sales, but the dollar amount paid to the landlord for rent varies with the price of the grain. Factors other than the rental amount to consider in selecting a lease agreement include: Method and Time of Rental Payment Rent due dates and the method of calculating rent depend on the type of lease agreement. In a crop share lease, the landlord will receive the share of the crop sales when the crop is sold. In a cash lease, the rental payment may be paid in full at the beginning of the season or it may be divided into a spring and fall payment. In a flexible cash lease, part of the rent may be paid in the spring and the balance paid in the fall. Length of the Lease Crop shares and flexible cash leases often have longer lease terms since they can be extended without renegotiating the rental amount. Cash leases should reflect changes in grain prices. Proper Farming Practices Leases may contain terms which influence cropping decisions and management practices of a tenant. Ease of Rent Calculations For crop share leases, accurate records on crop yields and input costs on each field and crop must be kept. Cash and flexible cash leases may be determined annually.
SELECTING A LEASE AGREEMENT. Select an appropriate lease arrangement and adapt it to suit your particular situation. In a cow-calf share lease, the owner will receive a share of all calf sales. In a pasture cash lease, the tenant will receive the income from all livestock sales and will pay the landlord a fixed dollar amount for each year of the agreement. Factors other than the rental amount to consider in selecting a lease agreement include: Method and Time of Rental Payment Rent due dates and the method of calculating rent depend on the type of lease agreement. In a cow-calf share lease, the owner will receive the share of the calf sales when the calves are sold. In a pasture cash lease, the rental payment may be paid in full at the beginning of the season or it may be divided into a spring and fall payment. Length of the Lease Cow-calf share leases often have longer lease terms since it can be extended without renegotiating the rental amount. Pasture cash leases should reflect changes in livestock prices. Proper Farming Practices Leases may contain terms which influence cropping decisions and management practices of a tenant. Ease of Rent Calculations For cow-calf share leases, accurate records must be kept. Pasture cash leases may be determined annually.
