T
oday we see more and more land being leased for grazing. Elderly ranchers retire and the younger generations don’t want to ranch, so the land is leased. For cattlemen, it’s an op-
portunity to use land without having to buy it. We’ll take a look at some key things to consider in
structuring a good lease. • Term • Rent • Surrender of the property at the end of the lease • Usage • Operate in a good, workmanlike manner • Not commit waste • Improvements made • Landlord’s lien
Term The term is how long the lease will run. It is usu-
ally a specifi c number of months or years and should contain both a specifi c start and ending date. If the parties want to be able to renew the lease, that can also be included in this paragraph. Here is a sample of the language that might be in
a lease to document the length of a lease: The tenant agrees to lease from the landlord the following described ranch for a period of fi ve (5) years for the purpose of
grazing tenant’s cattle. The lease term shall begin on Jan. 1, 2015, and terminate on Dec. 31, 2019.
Rent The rental charge can be money, labor, goods or a
combination of these. Let’s consider the needs of both parties. The graz-
ing tenant may simply need grass for his cattle. The landlord might need fences repaired and other work done. If this is the case, the tenant might pay for the use of the grazing land by performing certain work the landlord needs. The landlord might want to build his own cattle
herd, but does not have the cash to buy cows. In this situation, the rent may be paid in the form of a certain percentage of calves born on the ranch (for instance, one-third of the calves). There are certain duties that are read into a lease
setting requirements on both parties to the lease. In law, these required duties are called covenants. For example, if the rent is to be paid in the form of
a percentage of the calves born on the ranch during the period of the lease, then it would be wrong for the tenant to move his cows off the ranch just before they calve, hoping to avoid paying rent. The unwritten duty (or covenant) on the part of the
Elements of a Lease • Term – the tenant may use the property for a specifi ed period of time • Rent – the tenant will well and punctually pay rents as required in the lease • Surrender of the property at the end of the lease – the tenant will quietly surrender the property to the landlord on the day the lease expires
• Usage – the tenant should be able to use the leased property for a specifi c purpose, such as grazing cattle • Operate in a good, workmanlike manner – the tenant will not make any changes to the property without fi rst obtaining the landlord’s written consent
• Not commit waste – the tenant will maintain the property in good condition and return it to the landlord at the expiration of the lease in as good condition as it was at the beginning of the lease, reasonable wear and tear being excepted
• Improvements made – all improvements made to the property generally become the property of the landlord and the tenant will leave them at the expiration of the lease
• Landlord’s lien – a lien upon all personal property of the tenant that is placed on the property until the tenant has paid all lease fees, damages to the property, etc.
tscra.org September 2014 The Cattleman 93
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