Terminating farm lease in Illinois

As we get closer to the end of the growing season, University of Illinois Extension offices are often asked, “What is the deadline to terminate my farm lease?”

The answer is not straightforward and depends on whether your lease is verbal or written, and/or if your written lease indicates the termination provisions.

For many reasons, the landowner or the farmer may terminate a lease — and frequently it’s the result of poor communication by either side.

The following article is not to be construed as legal advice and is provided for educational purposes only.

Information in this article comes in part from the State of Illinois Compiled Statutes (735 ILCS 5/9-206) (from Ch. 110, par. 9-206). Other states have differing provisions on lease termination.

Following the written contract and Illinois statutes is essential even when the termination is on friendly terms.

Misunderstandings about lease termination typically arise when one party knows only part of the legal requirements. This person may have heard that there needs to be a three- or four-month notice, and the farm lease must terminate by Oct. 31.

There is a four-month notification of termination provision in the statutes, but according to this article on Farmdoc — https://tinyurl.com/Lease-Notice-Deadline — this date applies to leases that are year-to-year with no set term.

Oral leases are subject to this statutory provision, which requires a four-month advance notice for termination, as are written leases with no set termination date.

There are a surprising number of oral leases still used for leasing farmland. The legal provision comes from the historical standard that farm lease terms ran from March 1 to the end of February.

Oral leases are inherently risky. If you have such a lease, consult your legal adviser or the statute for clarification.

A written lease that provides a specific term negates the four-month notification requirement in Illinois for lease contracts. When the contract is completed, the parties can sign another lease agreement or end the relationship per the contract.

Some written leases have renewal clauses with notification of non-renewal to be accomplished by a specific date.

Such leases typically have a renewal signature page, which extends the contract. Terminating and vacating dates often occur shortly after the fall harvest season ends.

A weakness in renewal clauses in a farm lease contract may come into play if one party fails to remember the provisions of the written lease agreement.

Reading and understanding anything you sign on a legal document is prudent, even if you read it last year.

Farm managers increasingly use the calendar year for lease terms versus the historically common dates from March 1 to the end of February. Using the March 1 lease start date can be awkward for farmers if they lose it.

The terminated farmer may feel disconnected and be uncooperative toward the owner and the new tenant. Potential for any conflict is reduced by setting term dates in advance.

Illinois statutes allow farmers a reasonable amount of time to remove their crops at harvest, but the harvest season rarely goes past the first of the year. Your farm expert attorney can help work out the details.

A written term lease contract can help avoid confusion and hard feelings. For professional courtesy, informing a farmer before harvest would be best.

Harvest can be stressful, and it is likely not the best time to deliver “bad news” to the farm operator.

A solid written lease is essential if the owner is concerned about how the farmer will react to being terminated. If the response is a big concern, the owner may need to evaluate if they have the right farmer.

When legal professionals wrote existing farm lease templates, legal concerns about intellectual property rights, GPS yield maps and other issues weren’t a consideration. Today, these crucial factors must be addressed in the lease.

When entering a legal contract, seek legal counsel from a practicing attorney who understands the intricacies of modern farming practices and legalities.

Kevin Brooks is a farm business management and marketing educator serving Fulton, Mason, Peoria and Tazewell counties for University of Illinois Extension.