House bill would reform farmland leases Week Of 10/25/2021

Larry Limpf

The Ohio House Agriculture and Conservation Committee has held two hearings on House Bill 397, which would change the method of terminating farmland leases.
Representatives Darrell Kick and Brian Stewart provided sponsor testimony last month to the committee, saying it would provide “greater clarity and predictability” to agricultural leases.
In particular, the bill would require that if a written agricultural lease does not specify a method for the termination of the lease, or if the lease agreement is verbal, then the landlord will be required to provide a written notice of termination on or before Sept. 1 in the year the termination will occur for the termination to be effective.
“As a practicing attorney from a rural farming community, I have witnessed first-hand the disputes that can arise when a method or deadline for terminating a lease is not included in the verbal or written lease,” Rep. Stewart said. “A tenant farmer may have invested significant money to improve the ground for the following year, assuming that they are in contract to farm it again, only to receive a termination notice in late December.
“Or a landowner might be hoping to rent the ground to a relative, or to farm the ground themselves, only to find themselves defending an unexpected claim that their tenant is entitled to another year of farming rights. Reducing the possibility of these disputes is good for business on both sides, which is why this bill has the support of the Ohio Farm Bureau and the Ohio State Bar Association.”
According to analysis by the Legislative Service Commission, the bill amends the law for termination of farm lease agreements by requiring the landlord to give the tenant written notice of termination, unless the agreement provides a termination date or method for providing notice of termination.
Written notice provided under the bill’s provisions must be delivered by Sept. 1, in the year the termination is to be effective by personal delivery, fax or email. The notice of termination is effective either on the date harvesting is complete or by Dec. 31 of the year notice is given, whichever comes first.
As used in the bill, agricultural purposes mean the use and occupancy of real property for the planting, growing, and harvesting of crops and all practices necessary for that planting, growing, and harvesting. It doesn’t mean the use and occupancy of real property for pasture, timber, farm buildings, horticultural buildings, or leases solely for equipment.
A second hearing on the bill was held Oct. 12.
Ryan Conklin, speaking on behalf of the Ohio State Bar Association, provided testimony in support of the bill.
“An inspection of the statutory crop lease termination policies across many Midwestern states reveals that Ohio is behind the times,” he said. “Due to the costly impact and extreme interference that can be caused by a sudden lease termination, states have elected to protect their citizens through legislative fixes. Ohio farmers need the same type of protections to allow for better crop planning, more efficient allocation of resources and for the expeditious resolution of any lease disputes.”


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