By: Gary J. Heim, Esquire
The majority of crop leases are verbal. Even those that start in written form often are not rewritten after the initial lease term expires. Over the years, the original written lease terms typically are modified through telephone calls or face-to-face discussion or custom and practice between the landowner and the tenant. This informality works in most instances and that is why so many crop lease arrangements are verbal or the original lease agreement has not been updated for a decade or longer. However, when the landowner unexpectedly terminates the lease, the loose legal terms can make the separation more challenging...and potentially expensive.
The landowner's decision to terminate the lease is often precipitated by one of the following: (1) rent payments are late; (2) the property is being transferred; (3) the original landowner dies; (4) competing crop farmers offer higher rent payments; (5) the relationship between the landowner and the tenant grows distant or cold; or (6) a combination of these factors.
So what can the tenant crop farmer do when notified of the termination? First, try any number of common sense business efforts to change the mind of the landowner. If those are not successful, consider the losses that will result; if substantial, you may need to consider your legal options.
Generally, leases in Pennsylvania, even verbal ones, require advance written notice of termination. Most crop leases, particularly verbal ones, have a term of one year, which require advance written termination notice of at least 15 days. The notice has to be delivered in-person or by posting it on the leased property; mailing a notice, even by certified or registered mail, is not legally effective. Further, the notice is not effective until the end of the yearly term. As an example, if the crop lease term is January 1 to December 31 and the written notice is given after December 15 or if it is not hand-delivered or posted on the property by that date (even if mailed and received by Thanksgiving) the crop lease would continue for the entire following calendar year.
Another possible legal right of the tenant involves way-going crops, such as barley, rye or wheat, that are planted in the fall, but not harvested until the next summer. Even if a valid lease termination notice is given, the tenant crop farmer generally has the right to enter the leased property the following year to care for and to eventually harvest those crops without any additional rent payment being made to the landowner.
So, if you are the tenant farmer...you may have legal alternatives when a lease is unexpectedly terminated. And, if you are the landowner, be sure to follow the exact requirements for giving notice of a lease termination.
Mette, Evans & Woodside attorneys can evaluate your crop lease arrangement and advise you, whether the landowner or the tenant, how to deal with the termination of the lease.