Farm Lease
US Farm Lease – Cash Rent Lease
Landlord(s):
Manager:
Address:
Telephone:
Email:
Janis Vircks
Gannon Real Estate & Consulting
56722 – 241st Street, Ames, Iowa 50010
515-233-6999
mark@gannonre.com
Tenants(s):
Address:
Telephone:
Email:
THE PARTIES AGREE AS FOLLOWS:
1. DESCRIPTION OF FARM. The Landlord in consideration of the terms specified
herein, leases to the Tenant for agricultural purposes the following legally
described property (“Real Estate”):
N ½ of the SE ¼ of 1-85-25, Boone County, Iowa
The Real Estate is located in Harrison Township, Boone County, Iowa. Consisting of
approximately 79 tillable acres more or less and subject to all easements now existing
or which the Landlord may grant in the future, such that the usefulness of the property
to the Tenant is not reduced. Easements now in effect are as follows: None.
The Tenant has had or been offered an opportunity to make an independent
investigation as to the acres and boundaries of the premises.
2. TERM OF LEASE. The initial term of this lease will be for 2 crop years and shall
commence on March 14, 2013 and continue indefinitely unless cancelled by either party
prior to September 1 of each year or either party violates any terms of the lease
whereby the lease can be terminated without the right to cure any deficiencies.
.
Please consult an attorney when completing this document.
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3. PURPOSES OF THE LEASE AND LAND USE. The Tenant shall have the right to
use the property for the production of crops and hay subject to the following limitations:
Crops allowed, weather and planting conditions permitting: No Restrictions
Crop rotation, weather and planting conditions permitting: No Restrictions
Conservation plan: No Restrictions
The established pasture, meadowland, hayland, waterway(s), buffer zone(s), etc. shall
not be converted to any other crop.
The following housing, buildings and storage structures are located on the Real Estate
and may or may not be used by the Tenant for the following purposes: None
4. CASH RENT. Tenant agrees to pay the Landlord cash rent for the use of part or all
of the Real Estate as follows:
Description
Amount
Tillable Cropland:
79 acres
@ $ /acre
$
Total:
acres
Annual Rent:
$
The annual cash rent shall be due and payable as follows:
Due Date
Lease Signing
Amount
100%
All Rent is to be paid to Landlord at the address above or at such other place as
Landlord may direct in writing. Rent must be in Landlord's possession on or before the
due date. Failure to make any of the rent payments on time shall be grounds for
immediate termination of this lease.
5. PARTICIPATION IN FARM PROGRAMS. Participation of this farm in any offered
program by the U.S. Department of Agriculture or any state for crop production control
or soil conservation, the observance of the terms and conditions of this program, and
the division of farm program payments, requires Landlord's consent. The Tenant is
entitled to the “Producer” payments under the farm program.
6. LANDLORD’S LIEN AND SECURITY INTEREST APPLIES. Does Not Apply
7. OPERATOR DUTIES AND CONDITIONS. Tenant shall farm the Real Estate in a
manner consistent with good husbandry, seek to obtain the best crop production that
the soil and crop season will permit, properly care for all growing crops in a manner
consistent with good husbandry, and harvest all crops on a timely basis. In the event
Tenant fails to do so, Landlord reserves the right, personally or by designated agents, to
Please consult an attorney when completing this document.
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enter upon the Real Estate and properly care for and harvest all growing crops,
charging the cost of the care and harvest to the Tenant, as part of the Rent. In the event
of total crop destruction during the growing season, tenant shall continue to control all
weeds and prevent soil erosion through acceptable practices or allowable methods
determined by applicable crop insurance regulations. Tenant shall timely control all
weeds, including noxious weeds, weeds in the fence rows, along driveways and around
buildings throughout the Real Estate. Tenant shall comply with all terms of the
conservation plan and any other required environmental plans for the leased premises.
Tenant shall do what is reasonably necessary to control soil erosion including, but not
limited to, the maintenance of existing watercourses, waterways, ditches, drainage
areas, terraces and tile drains, and abstain from any practice which will cause damage
to the Real Estate. Tenant shall not pasture new seedings of legumes and grasses in
the year they are seeded without consent of the landlord. Tenant shall protect all trees,
vines and shrubbery upon the Real Estate from injury by Tenant's cropping operation or
livestock.
a. Farm Records: Tenant shall by August 15th of each lease crop year provide to the
Landlord a written mid-season report showing all crops planted, including the acres of
each crop, fertilizers, herbicides and insecticides applied, the type of application and the
quantity of such items applied on the Real Estate. Crop insurance information
applicable to this property will also be supplied.
Tenant shall by December 1 or four weeks after harvest, of each lease crop year
provide to the Landlord a written harvest report showing the actual yields of each crop
with supporting documentation (scale tickets, grain cart load weight records, FSA bin
measurements and a copy of the crop insurance production report) of all crops
produced on the Real Estate during such crop year. Tenant shall disclose to Landlord
all required information by completion and delivery of the Annual Farm Record
Addendum by the required delivery date. Failure to deliver the Annual Farm Record
Addendum by the required date is considered a violation of the terms of this Lease.
Tenant is required to upload all farm records into the farms US Farm Records online
database (www.usfarmrecords.com) within 30 days of the date of the document.
Records include: yield data, crop insurance forms and reports (policy application,
acreage report, production report, claims and indemnity payments), fertilizer and
chemical records, GPS data, drainage maps and records, FSA documents, soil tests
and reports, cropping data, mid-season report, annual farm harvest report and any other
records pertaining to the farm or requested by the landowner. If operator is unable to
upload data via the internet, copies may be sent to US Farm Lease, 56722 241st Street,
Ames, IA 50010 to be scanned and entered into the database. Tenant will have access
to records in this database until which time the lease is terminated.
b. Soil Samples: Samples are required as follows (specify type and frequency):
Tenant is required to perform a grid sampled soil test within 6 months of lease signing.
The cost of the soil test will be borne by the tenant.
c. Lime: The cost of any lime shall be paid by 100%Tenant and be allocated over 5
years. If this Lease is terminated before the end of the Lease period or non-renewed
Please consult an attorney when completing this document.
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and Tenant does not therefore receive the full allocated benefits of Tenant purchased
lime, Tenant shall be reimbursed by Landlord to the extend Tenant has not received the
benefits.
d. Crop Stubble: Tenant may not remove from the Real Estate, or burn, any straw,
stalks, stubble, or similar plant materials, all of which are recognized as the property of
Landlord and not to be removed without permission of the farm manager. Tenant may
use these materials, however, upon the Real Estate for the farming operations.
e. Tile: Tenant shall investigate broken and inoperative tile lines and report them to the
Landlord. Expenses for their repair shall be paid by the Landlord.
f. Livestock: No Livestock
8. ENVIRONMENTAL.
a. Landlord. To the best of Landlord's knowledge to date:
i)
Neither Landlord nor, Landlord's former or present tenants, are subject to any
investigation concerning the premises by any governmental authority under any
applicable federal, state, or local codes, rules, and regulations pertaining to air
and water quality, the handling, transportation, storage, treatment, usage, or
disposal of toxic or hazardous substances, air emissions, other environmental
matters, and all zoning and other land use matters.
ii)
Any handling, transportation, storage, treatment, or use of toxic or hazardous
substances that has occurred on the premises has been in compliance with all
applicable federal, state, and local codes, rules, and regulations.
iii) No leak, spill release, discharge, emission, or disposal of toxic or hazardous
substances has occurred on the premises.
iv) The soil, groundwater, and soil vapor on or under the premises is free of toxic
or hazardous substances except for chemicals (including without limitation
fertilizer, herbicides, insecticides) applied in conformance with good farming
methods, applicable rules and regulations and the label directions of each
chemical.
Landlord shall hold Tenant harmless against liability for removing solid waste disposal
sites existing at the execution of this Lease, with the exception that Tenant shall be
liable for removal of solid waste disposal sites to the extent that the Tenant created or
contributed to the solid waste disposal site at any time.
Landlord shall assume liability and shall indemnify and hold Tenant harmless against
any liability or expense arising from any condition which existed, whether known or
unknown, at the time of execution of the lease which is not a result of actions of the
Tenant or which arises after date of execution but which is not a result of actions of the
Tenant.
Please consult an attorney when completing this document.
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Landlord shall disclose in writing to Tenant the existence of any known wells,
underground storage tanks, hazardous waste sites, and solid waste disposal sites.
Disclosure may be provided by a properly completed groundwater hazard statement to
be supplemented if changes occur.
b. Tenant. Tenant shall comply with all applicable laws concerning application,
planting, storage and handling of pesticides (including, without limitation, herbicides,
insecticides, fungicides, nematicides), fertilizers and seed. Tenant shall apply all
pesticides at levels not to exceed the manufacturer's recommendations. Farm
chemicals may not be stored on the premises. Farm chemicals for use on other
properties may not be stored on this property. Chemicals stored on the premises shall
be stored in clearly marked, tightly closed containers and stored according to
manufacturer’s recommendations. No chemicals or chemical containers will be
disposed of or burned on the premises. Application of chemicals for agricultural
purposes per manufacturer's recommendation shall not be construed to constitute
disposal.
Tenant shall employ all means appropriate to insure that well or ground water
contamination does not occur, and shall be responsible to follow all applicator's
licensing requirements. Tenant shall install and maintain safety check valves for
injection of any chemicals and/or fertilizers into an irrigation system (injection valve only,
not main well check valve). Tenant shall properly post all fields (when posting is
required) whenever chemicals are applied by ground or air. Tenant shall haul and
spread all manure on appropriate fields at times and in quantities consistent with
environmental protection requirements. Tenant shall not dispose of waste oil, tires,
batteries, paint, other chemicals or containers anywhere on the premises. Solid waste
may not be disposed of on the premises. Dead livestock may not be buried on the
premises. If disposal of solid waste or burial of dead animals is permitted as stated in
the previous two sentences, the disposal or burial shall be in compliance with all
applicable environmental laws. Tenant shall not use waste oil as a means to suppress
dust on any roads on or near the premises. No underground storage tanks, except
human waste septic systems that meet current codes, rules, and regulations, shall be
maintained on the premises.
Tenant shall immediately notify Landlord of any chemical discharge, leak, or spill which
occurs on premises. Tenant shall assume liability and shall indemnify and hold Landlord
harmless for any claim or violation of standards which results from Tenant's use of the
premises. Tenant shall assume defense of all claims, except claims resulting from
Landlord's negligence, in which case each party shall be responsible for that party's
defense of any claim. After termination, Tenant shall remain liable for violations which
occurred during the term of this Lease.
9. TERMINATION OF LEASE. Tenant acknowledges and agrees that this Lease shall
extend on an annual basis based on the agreed adjustment ratios. In order for the
lease to terminate either party (landowner or tenant) must send a termination notice by
December 15 of the active lease and not September 1 as may be normal in Iowa.
Please consult an attorney when completing this document.
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10. POSSESSION AND CONDITION AT END OF TERM. At the termination of this
Lease, Tenant will relinquish possession of the Real Estate to the Landlord. If Tenant
fails to do so Tenant agrees to pay Landlord $500 per day, as liquidated damages until
possession is delivered to Landlord. At the time of delivery of the Real Estate to
Landlord, Tenant shall assure that the Real Estate is in good order and condition, and
substantially the same as it was when received by Tenant at the commencement of this
Lease, excusable or insurable loss by fire, unavoidable accidents and ordinary wear,
excepted.
11. LANDLORD'S RIGHT OF ENTRY AND INSPECTION. Landlord may enter upon
the Real Estate or authorize someone else to enter upon the Real Estate to conduct any
normal tillage or fertilizer operation after Tenant has completed the harvesting of crops
even if this is prior to the date of termination of the lease. Landlord may enter upon the
Real Estate at any reasonable time for the purpose of viewing or seeding or making
repairs, or for other reasonable purposes.
12. VIOLATION OF TERMS OF LEASE. If Tenant or Landlord violates the terms of
this Lease, the other may pursue the legal and equitable remedies to which each is
entitled. Tenant's failure to pay any Rent when due shall cause all unpaid Rent to
become immediately due and payable, without any notice to or demand upon Tenant
and will be grounds for immediate termination of the lease.
13. FENCES. Tenant shall not be responsible to maintain the fences on the leased
premises but will also not remove any fences with permission of the manager.
14. NEW IMPROVEMENTS. All buildings, fences, irrigation equipment, tile, and
improvements of every kind and nature that may be erected or established upon the
Real Estate during the term of the Lease by the Tenant shall constitute additional rent
and shall inure to the Real Estate, becoming the property of Landlord unless the
Landlord has agreed in writing prior to the erection that the Tenant may remove the
improvement at the end of the Lease. Long term improvements, facilities, buildings, tile
and major repairs which will inure to the Real Estate and which expenses have been
agreed upon as terms of this lease are listed in the attached  Long Term Improvement
Addendum.
15. WELL AND WATER SYSTEMS. Tenant and Landlord agree to the following terms
relative to the repair and replacement of wells, water lines, well pumps and related
equipment: N/A
This lease does not include irrigation terms and conditions outlined in the attached
Irrigation Equipment and Maintenance Addendum.
16. EXPENSES INCURRED WITHOUT CONSENT OF LANDLORD. No expense shall
be incurred for or on account of the Landlord without first obtaining Landlord's written
authorization. Tenant shall take no actions that might cause a mechanic's lien to be
imposed upon the Real Estate.
Please consult an attorney when completing this document.
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17. AGENCY AND DISCLOSURE. Tenant acknowledges and understands he/she is
not an agent of the Landlord. Landlord has solicited the services of a Farm Manager
serving as Agent for Landlord. Mark Gannon, Farm Management Agent for the
Landlord, hereby discloses to the Tenant that:
1) It is acting as the agent of the Landlord with the duty to represent the
Landlord’s interest;
2) It is not, and will not be the agent of the Tenant; and
3) Information given to Landlord’s Agent will be disclosed to Landlord.
18. ACCOUNTING. The method used for dividing and accounting for the harvested
grain shall be the customary and usual method used in the locale.
19. ATTORNEY FEES AND COURT COSTS. If either party files suit to enforce any of
the terms of this Lease, the prevailing party shall be entitled to recover court costs and
reasonable attorneys' fees.
20. CHANGE IN LEASE TERMS. The conduct of either party, by act or omission, shall
not be construed as a material alteration of this Lease until such provision is reduced to
writing and executed by both parties as addendum to this Lease.
21. CONSTRUCTION. Words and phrases herein, including the acknowledgment, are
construed as in the singular or plural and as the appropriate gender, according to the
context.
22. NOTICES. The notices contemplated in this Lease shall be made in writing and
shall either be delivered in person, or be mailed in the U.S. mail, certified mail to the
recipient's last known mailing address, or as governed by the state in which the property
is located.
23. ASSIGNMENT. Tenant shall not assign this Lease or sublet the Real Estate or any
portion thereof without prior written authorization of the Landlord.
24. CERTIFICATION. Tenant certifies that it is not acting, directly or indirectly, for or on
behalf of any person, group, entity or nation named by any Executive Order or the
United States Treasury Department as a terrorist, “Specially Designated National and
Blocked Person” or any other banned or blocked person, entity, nation or transaction
pursuant to any law, order, rule or regulation that is enforced or administered by the
Office of Foreign Assets Control; and it is not engaged in this transaction, directly or
indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly
on behalf of, any such person, group, entity or nation. Tenant hereby agrees to defend,
indemnify and hold harmless Landlord from and against any and all claims, damages,
losses, risks, liabilities and expenses (including attorney’s fees and costs) arising from
or related to any breach of the foregoing certification.
25. INSURANCE. Both the Tenant and Landlord will keep their respective property and
liability interests reasonably insured against hazards and casualties. In the event of any
Please consult an attorney when completing this document.
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damage to crops, buildings, or improvements by any natural or man-made disaster, the
Tenant shall inform the Landlord within 48 hours.
The Tenant shall carry the following types and minimum coverage levels of insurance:
a.
Workers’ Compensation Insurance if required under the laws of the
state where the property is located;
b.
Comprehensive General Liability, including Employer’s Liability, with
limits of not less than $1,000,000.00 per occurrence and which names
the Landlord as additional insureds. This insurance shall also provide
contractual liability insurance covering the obligations assumed by the
Tenant under the indemnity provisions under INDEMNIFICATION 26(a)
only.
c.
Automobile Liability Insurance on all owned, non-owned, hire, or leased
automotive equipment in conjunction with operations, in amounts not
less than $250,000.00 per occurrence.
26. INDEMNIFICATION. The Tenant agrees to indemnify and hold the Landlord
harmless from any and all claims, liability, loss, damage or expenses resulting from
Tenant’s occupation and use of the Real Estate, specifically including without limitation
any claim, liability, loss or damage arising: (a) by reason of the injury to person or
property from whatever cause while in, on or near the premises or in any way
connected with the premises or with the improvements or personal property in or on the
premises, including any liability for injury to the person or personal property of the
Tenant its agents or employees; (b) By reason of any work performed on the premises
or materials furnished on the premises at the instance of or request of the Tenant, its
agents or employees; (c) By reason of the Tenants’ failure to perform any provision of
this Lease or to comply with any requirement imposed upon it or on the premises by an
duly authorized governmental agency or political subdivision; provided that the Tenant
shall not be responsible to comply with any requirements necessitating structural or
permanent improvements or changes to the premises; (d) Because of the Tenants’
failure or inability to pay as they become due any obligation incurred by it in the
agricultural or other operations conducted by it on the premise. The provisions of the
foregoing indemnification agreement shall remain in effect following the termination of
this Lease.
27. INDEPENDENT CONTRACTORS. If the Tenant employs independent contractors
to perform any work on the property, or to conduct its farming operation, the Tenant
shall supervise the work performed by such contractors and assure the Landlord that
each independent contractor maintains in full force and effect, at contractor’s sole cost
and expense, the kinds and amounts of insurance specified in INSURANCE provisions
herein.
28. Cancellation due to Unforseen Circumstances: The Tenant acknowledges and
agrees that the Landlord may cancel the lease any year prior to March 1 due to
unforeseen financial or health circumstance related to the Owner. After March 1 the
Please consult an attorney when completing this document.
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lease cannot be cancelled for the following crop year under this clause. The Landlord
agrees to reimburse the Tenant for any labor or inputs provided by the Tenant in
anticipation of the upcoming crop year. Reimbursement for labor and fieldwork shall be
at a rate not in excess of the custom rates published by the local State University or
County Extension Office.
29. HUNTING RIGHTS. Landlord reserves the right to maintain and control hunting,
trapping and fishing rights on Real Estate.
30. OTHER PROVISIONS. Any other provisions, terms or requirements will be included
in the following attached Addendums:
Annual Farm Record Addendum
Other Provisions Addendum
31. SIGNATURES.
TENANT/OPERATOR(s):
OWNER’s Representative: Jan Vircks
by:
________________________________
________________________________
(signature here)
(signature here)
Printed Name:
Printed Name:
SS#: ______________ Date: ________
SS#: ______________ Date: ________
________________________________
(signature here)
Printed Name:
SS#: ______________ Date: ________
Please consult an attorney when completing this document.
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Other Provisions Addendum
Extensions are possible for years 3 and beyond at the option of both the tenant and
landowner based upon the ratio between the actual rent per acre for year 1 divided by
the local county overall average cash rent as determined by the Iowa State University
Cash Rent Survey published in May 2013. The average cash rent for Boone County
was $261/acre in the Iowa State University 2012 Cash Rent Survey. Once the cash
rent is published for Boone County in the Spring of 2014 then the average cash rent will
be calculated based off of that ratio for 2015.
For instance if the agreed rent is $400/acre and the 2013 ISU Cash Rent Survey shows
an average cash rent for Boone County of $300/acre then the ratio will be established at
133% of the county average. In May of 2014 the survey then shows the Boone County
average to be $320/acre then the planned rent for 2015 will be $425.60/tillable acre for
the 2015 crop year. This scenario will be continuing for each crop year as long as the
lease is in place.
The tenant will receive a notice of the rent adjustment for 2015 crop year within 30 days
of the publication of the survey in May 2014 and both the owner and tenant have the
right to cancel the lease prior to September 1 of this year and each year of the lease.
This adjustment scenario will be an annual event as long as the lease is in place and
could potentially go on for an indefinite time until one or both parties decides not to
continue.
Tenant will be required to fertilize for phosphorous and potash each year up to crop
removal for 180 bu/acre corn and 50 bu/acre soybeans. Evidence will be required to
every fertilizer application. Tenants are required to provide the landlord any soil tests
performed on the farm.
The tenant agrees to cooperate with the wishes of the owner’s soil conservation
improvements with all the financial benefits being held by the landowner.
Please consult an attorney when completing this document.
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