Lake Gerald is gone, the invoice remains
DES MOINES, Iowa — A landlord has raised the cash rent on eighty acres after discovering that his tenant spent six years correcting the soil, fixing the drainage and removing a population of volunteer trees large enough to qualify for its own school district.
The landlord called the increase a reflection of the property's improved productive capacity.
The tenant said he remembered the productive capacity from his first spring, when he planted around a wet hole the size of a church parking lot. The previous tenant had called it Lake Gerald. Gerald was the landlord.
"The lake's gone," the tenant said. "Good to see Gerald found another way to collect on it."
Tenant Improvements on Rented Farmland: Improvements Finally Reach the Owner
The tenant brought records to the rent meeting. There were soil tests, lime bills and a photograph of a length of crushed tile dug out beside the ditch. The landlord looked over the material and said it confirmed what he had suspected all along. The tract was a quality piece of ground.
The landlord's notice of the increase, a single page the tenant keeps in a folder on the dash of his pickup, reads in part: "Owing to recent improvements to the property, the rent for the coming year will be adjusted to reflect its enhanced value." The word "recent" has been circled twice, in the tenant's pen.
The tenant's daughter, who had spent a Saturday pulling roots out of the ditch, asked when it became a quality piece of ground. The landlord checked his notes and said the increase would take effect March 1.
The landlord had expenses too. He mentioned property taxes and an insurance bill. The tenant understood and offered to go through the numbers together. They agreed immediately that the ground had become more valuable. Agreement slowed considerably when they reached the question of who had made it that way.
A neighbor who rents land down the road said he'd learned to get long-lived improvements in writing. He had once fixed a crossing under a handshake agreement. The crossing was still there. The handshake had expired with the lease.
The landlord said he would consider crediting some of the improvements toward the new rent, provided the tenant first documented which ones had been completed before the lease began. The tenant said all of them had been completed before the lease began, in the sense that nobody had done them.
Farm Lease Improvements and Cash Rent Benchmarks: The Ground Gets a Performance Review
USDA reports cropland values and cash rents by region. The NASS Land Values summary and the county-level data in NASS Quick Stats give both sides a benchmark. A local lease still has to account for who pays for improvements and how long the operator has to recover the cost.
A farm management educator who has reviewed leases across the state said the arrangement in this case is more common than most tenants expect. "Without a written agreement, the owner may have no obligation to pay a tenant for work that stays with the land," she said. She pointed to University of Missouri Extension guidance on tenants and farm improvements, which advises a lease that spells out how a tenant is reimbursed for the remaining value of an improvement. Ohio State's Farm Office makes a similar case for long-term leases when a tenant pays for drainage.
The lease the tenant signed contains two paragraphs on improvements. The first says the tenant may make improvements "with the owner's knowledge." The second says improvements become the property of the owner "upon installation." Neither paragraph mentions payment. The tenant has read both several times, most recently in the machine shed.
The tenant proposed a multiyear lease with written terms for future drainage work. The landlord said he liked flexibility. The tenant said he did too. In fact, he had recently become flexible enough to let the landlord hire his own backhoe.
They finally agreed to walk the field before setting a number. At the ditch, the landlord admired how well the water was moving and asked whether the tenant could do the same thing on the forty across the road.
The tenant said he could provide an estimate.
"An estimate for the work?"
"Two estimates," the tenant said. "One for the work and one for what you'll charge me after I do it."
Five Humorous Observations
- He spent six years draining the lake and the reward is a rent hike. That's not a landlord. That's a guy who sends you a bill for the view after you wash the window.
- "Recent improvements." Six years. In landlord time that's recent. In dog years it's a whole retirement.
- The lease says improvements belong to the owner upon installation. So the second the tile hits the dirt, it switches teams. That's the fastest trade in sports.
- The old tenant called it Lake Gerald. When your name is on a swamp, you should probably think twice about charging the guy who dried it.
- Two estimates. One for the work, one for what it'll cost you after. That's not a quote, that's a weather forecast for your own wallet. https://farm.fm/?p=41337
DES MOINES, Iowa — A landlord has raised the cash rent on eighty acres after discovering that his tenant spent six years correcting the soil, fixing the drainage and removing a population of volunteer trees large enough to qualify for its own school district.
The landlord called the increase a reflection of the property's improved productive capacity.
The tenant said he remembered the productive capacity from his first spring, when he planted around a wet hole the size of a church parking lot. The previous tenant had called it Lake Gerald. Gerald was the landlord.
"The lake's gone," the tenant said. "Good to see Gerald found another way to collect on it."
Tenant Improvements on Rented Farmland: Improvements Finally Reach the Owner
The tenant brought records to the rent meeting. There were soil tests, lime bills and a photograph of a length of crushed tile dug out beside the ditch. The landlord looked over the material and said it confirmed what he had suspected all along. The tract was a quality piece of ground.
The landlord's notice of the increase, a single page the tenant keeps in a folder on the dash of his pickup, reads in part: "Owing to recent improvements to the property, the rent for the coming year will be adjusted to reflect its enhanced value." The word "recent" has been circled twice, in the tenant's pen.
The tenant's daughter, who had spent a Saturday pulling roots out of the ditch, asked when it became a quality piece of ground. The landlord checked his notes and said the increase would take effect March 1.
The landlord had expenses too. He mentioned property taxes and an insurance bill. The tenant understood and offered to go through the numbers together. They agreed immediately that the ground had become more valuable. Agreement slowed considerably when they reached the question of who had made it that way.
A neighbor who rents land down the road said he'd learned to get long-lived improvements in writing. He had once fixed a crossing under a handshake agreement. The crossing was still there. The handshake had expired with the lease.
The landlord said he would consider crediting some of the improvements toward the new rent, provided the tenant first documented which ones had been completed before the lease began. The tenant said all of them had been completed before the lease began, in the sense that nobody had done them.
Farm Lease Improvements and Cash Rent Benchmarks: The Ground Gets a Performance Review
USDA reports cropland values and cash rents by region. The NASS Land Values summary and the county-level data in NASS Quick Stats give both sides a benchmark. A local lease still has to account for who pays for improvements and how long the operator has to recover the cost.
A farm management educator who has reviewed leases across the state said the arrangement in this case is more common than most tenants expect. "Without a written agreement, the owner may have no obligation to pay a tenant for work that stays with the land," she said. She pointed to University of Missouri Extension guidance on tenants and farm improvements, which advises a lease that spells out how a tenant is reimbursed for the remaining value of an improvement. Ohio State's Farm Office makes a similar case for long-term leases when a tenant pays for drainage.
The lease the tenant signed contains two paragraphs on improvements. The first says the tenant may make improvements "with the owner's knowledge." The second says improvements become the property of the owner "upon installation." Neither paragraph mentions payment. The tenant has read both several times, most recently in the machine shed.
The tenant proposed a multiyear lease with written terms for future drainage work. The landlord said he liked flexibility. The tenant said he did too. In fact, he had recently become flexible enough to let the landlord hire his own backhoe.
They finally agreed to walk the field before setting a number. At the ditch, the landlord admired how well the water was moving and asked whether the tenant could do the same thing on the forty across the road.
The tenant said he could provide an estimate.
"An estimate for the work?"
"Two estimates," the tenant said. "One for the work and one for what you'll charge me after I do it."
Five Humorous Observations
- He spent six years draining the lake and the reward is a rent hike. That's not a landlord. That's a guy who sends you a bill for the view after you wash the window.
- "Recent improvements." Six years. In landlord time that's recent. In dog years it's a whole retirement.
- The lease says improvements belong to the owner upon installation. So the second the tile hits the dirt, it switches teams. That's the fastest trade in sports.
- The old tenant called it Lake Gerald. When your name is on a swamp, you should probably think twice about charging the guy who dried it.
- Two estimates. One for the work, one for what it'll cost you after. That's not a quote, that's a weather forecast for your own wallet. https://farm.fm/?p=41337
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