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Give Thought to Your Farm Lease Termination Date

If changes are needed in your farming operations for 2014, you need to give consideration to the proper deadline for notifying your farm operator. The best practice – and quite often the required practice – is to give written notice, sent via certified mail, on or before the statutory deadline in order to properly terminate a farm lease renewable from year-to-year. If the farm lease is properly terminated, you can negotiate the new term for the upcoming year anytime during the fall or winter.

This deadline also impacts our economic development clients. When Kahn, Dees, Donovan & Kahn, LLP, options farm land in order to assemble a tract for economic development purposes, time deadlines like the lease termination date can be critical. A farm owner who is also the operator can option land and not be impacted by this deadline. However, a distant farm owner with a farm operator lease may be impacted by such a deadline.

Indiana Farm Lease Termination Deadlines:  October 1 or November 1

Farm lease termination dates are subject to statutory requirements. In Indiana, a farm tenancy from year to year requires notice to the tenant not less than three (3) months before the expiration of the year.  I.C. 32-31-1-3. This means if the farm lease expires at calendar year end, notice of lease termination must be given on or before October 1. If there is proof that the farm lease year runs from February 1 to January 29, in Indiana the lease termination date would be November 1.

Illinois Farm Lease Termination Deadlines:  September 1 or October 1

Illinois requires four (4) months’ notice.  735 Il. C.S. 5/9-206 Sec. 9-206 (from Chp. 110, par. 9-206). In Illinois, notice to terminate the lease shall be given in writing not less than four (4) months before the end of the lease year. Thus, a lease for the calendar year would require notice on or before September 1. If there is proof of the year-to-year lease beginning February 1 of each year, notice would be required in Illinois on or before October 1.

 

Most farming operations have written leases. However, if the farming lease is based upon an oral agreement, setting the date for when a farm lease begins is critical for knowing the lease termination deadline. To clarify this ambiguity, it’s always best to have an agreement in writing.

Kahn, Dees, Donovan & Kahn has been representing farm owners and operators throughout our history. We provide legal services including estate planning, farm business organization, real estate purchase, sale and option services, mineral leasing, and farm leasing. For more information about farming operation leases or any agriculture-related legal matter, please contact Brian P. Williams at (812) 423-3183 or BWilliams@KDDK.com.

About the Author

Brian Williams

Brian P. Williams, a Co-Managing Partner at Kahn, Dees, Donovan & Kahn, LLP, in Evansville, Indiana, is a member of the firm’s Economic Development, Estate Planning and Probate Administration, Litigation and Trial Services, and Real Estate Law practice teams; and has served clients in industries including agriculture, construction, manufacturing, and education for more than 30 years.  He especially excels  when advocating economic development projects and site locations. Honed from service as a private practitioner, federal magistrate, industrial foundation officer, federal law clerk, and civic leader, Brian’s analytical skills empower clients to more swiftly reach durable solutions.