Farmland leases are common across rural America. In fact, in Indiana, about 39% of all agricultural areas are leased and about 28% of farms operate on partly or entirely rented land, according to the American Farm Bureau. However, sometimes leases are terminated, and it’s important that both landowners and tenant farmers understand the appropriate timing and procedures necessary to properly end a farmland lease.

Farmland leases can end due to a variety of reasons, noted Michael Langemeier, Director of the Center for Commercial Agriculture and professor of agricultural economics at Purdue University. These reasons include an expired lease, a tenant failing to meet the lease’s terms (like non-payment of rent), a landowner’s desire to sell the property, a change in ownership or management or, even, a mutual agreement between the landowner and tenant.

“A lot of leases in Indiana and across the Corn Belt for that matter are oral leases and they’re year to year,” said Langemeier. “Though we obviously encourage folks to have a written lease and, if your lease is three years or longer, you’re required to have a written lease.”

The purpose of written leases is to make sure everyone’s on the same page when it comes to payment terms, land use and land improvements.

“There are cases where the tenant and landowner have worked out a way to pay for something like tile drainage over a long period of time and, if that’s the case, a written lease will specify what the arrangement is,” said Langemeier, noting that in Indiana and across the Corn Belt, it’s common for a landowner to reduce the rent by a certain percentage to pay for something like tile drainage. “In these situations, a longer lease makes a lot of sense.”

Crop-share leases, which mean that a percentage share of the crop is given to the landowner, and flexible cash rent leases, which mean rental rates vary based upon factors like crop yields or commodity pricing, aren’t as common as cash rent leases, which are the main farmland leases used by row crop farmers. Cash rent leases are typically annual leases that must be renewed each year.

“The [cash rent lease] termination has to be done before Dec. 1 in Indiana,” explained Langemeier. “Right after harvest, that termination needs to be started, and that’s either if the tenant is terminating or the landlord’s terminating it.”

Langemeier pointed out that the termination deadline applies for both oral and written leases though written leases will have those terms in the legal contract.

Thinking about ending your farmland lease (either as a tenant or landowner)? Here are a few tips:

  • Review your lease agreement terms. Ask these questions: When does it begin or end? How much notice is required by either party to end the lease? Are there any specific termination conditions included? If the lease is oral, not written, state law governs termination timelines, according to Langemeier. Usually, that requires advance written notice prior to the next crop year.

 

  • Understand your state’s termination deadlines. Indiana state law requires notice to be delivered three months before the lease year ends. In Illinois, the deadline is Oct. 31 for a year-to-year farmland lease as it’s four months before the common March 1 lease year end date. In Michigan, when to give notice is based upon the lease terms; however, if it’s an oral lease, Michigan law requires six months’ notice.

 

  • Remember to communicate clearly and early. Farmland leases go beyond paperwork – and these leases affect people, crops and long-term land management and stewardship. Langemeier noted that clear communication is key to any and all farmland leases.

 

  • Document everything. Verbal agreements or text messages won’t hold up if there’s a dispute later. Make sure your farmland lease terms – and termination notices – are in writing. A helpful resource for lease agreement language, according to Langemeier, is AgLease101.org

 

Another factor to consider when ending a farmland lease is the growing season cycle. Don’t end a lease mid-season. Doing so can create financial and logistical issues for both the landowner and the tenant farmer. Plan terminations around harvest and planting schedules to decrease disruption.

It’s also important to establish a gameplan once the farmland lease is over with specific steps to address crop residue or unharvested crops, fertilizer or input reimbursement, building or equipment removal and any soil health or conservation practices.

“A lease agreement is something built on trust,” said Langemeier.

Ending a farmland lease is a significant decision that requires clear communication, proper timing and a thorough understanding of the lease terms. Whether you’re a landowner or tenant, handling termination correctly helps preserve trust, safeguard investments and set the stage for future opportunities. Taking the time to review agreements, follow legal requirements and maintain transparency ensures the process is fair and professional for everyone involved.

# # #