drought condition during the normal grazing period for the county. To be eligible for LFP, producers must own, cash- or share-lease, or be a contract grower of covered livestock during the 60 calendar days before the beginning date of a qualifying drought or fi re, and provide pastureland or grazing land for covered livestock, including cash-rented pastureland or graz- ing land. The Farm Service Agency says payments will be


made to whoever has control of the land, so if the land is cash-leased, the payments go to the producer. If it’s cost-shared, the payments are split between the landowner and tenant. Lashmet says, “This can be changed or modifi ed in


a lease agreement if the parties agree to do that. If that is the case, I think it’s a great idea to make sure you spell out in the lease exactly how that is going to work.”


Lease disputes If a dispute can’t be resolved by the parties, it usu-


ally winds up in state court, although an exception involves cases where there is a diversity of citizenship jurisdiction. For instance, says Lashmet, “If you had a landlord


in Texas and a lessee in New Mexico, and the amount in controversy is (high) enough, then you could get federal diversity jurisdiction.” But in most cases, there is not a federal issue. There are also Texas laws that have ramifi cations


for grazing leases. The “Statute of Frauds” (Business and Commerce Code, Title 3, Chapter 26) requires that certain contracts have to be in writing to be enforce- able. She says, “One of those contracts is a lease of real estate that lasts for a year or longer. Then there


100 The Cattleman March 2015


are some default laws that are in place; for example, when it comes to subleasing, there is a law in Texas that says a sublease has to be approved in writing by the landlord before it can occur.” But as with most other aspects of leasing, these provisions can be modifi ed by a written agreement by the parties. Before entering into negotiations with the landlord,


Lashmet recommends the producer make a list of po- tential problems between the 2 sides. The terms of pay- ment also have to be specifi ed. “Sometimes I see month-to-month leases,” she says.


“I see year-long leases where they just pay one time at the beginning of the year. It just depends on how the parties want to agree to do it, and so long as they spell it out clearly in the lease agreement, there’s no set payment term. Sometimes I’ve seen 1-year leases. I’ve seen 3- or 5-year leases. I’ve seen year-to-year leases that automatically renew at the end of the lease period unless one of the parties gives notice. That is actually pretty common with grazing leases.” And although it may be expensive, Lashmet recom-


mends hiring an attorney to review and approve the lease before it is executed. She also suggests compiling all the information referenced in her checklist before consult- ing the lawyer who, after all, charges by the hour.


Learn more about this topic at the


2015 Cattle Raisers Convention March 27 to 29, Fort Worth.


thecattlemanmagazine.com


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