Iowa Farm Lease Notification Considerations

Ankeny, Iowa - As we approach September 1 in Iowa, farmland owners and farm operators will begin to plan for next year. September 1 is the date that farmland owners or tenants must give notice to each other for terminating the current farm lease agreement (written or verbal) for the following crop year or the current lease terms will continue through the next year.

Whether it is written or a verbal handshake, the farm lease is a contract that spells out how the landowner and the farm tenant will work together to take care of the land, plant crops, share revenue and expenses and hold each other accountable to perform. In our continually changing world, there are times and situations when one or both parties need to negotiate or adjust terms, set expectations, or part ways. Proper notification makes it cleaner and easier for both parties to write a new lease or leave the farm lease open if the farm might be transferred or sold.

If either party wants or needs to renegotiate lease terms after the September 1 deadline, both parties must agree to the changes. That new agreement supersedes the previous agreement and will continue forward until a new agreement is reached. Neither party is obligated to renegotiate. If both parties do not agree, the existing lease remains in place. In this scenario, it is critical to have a written, signed lease to protect both parties.

Each situation is different. The best circumstances involve open and honest communication ahead of serving notice so that surprises are minimized. Serving or receiving notice does not necessarily reflect poorly on the relationship between the two parties or either of their performance. The purpose of the notice is to prevent the continuation of the existing lease and its terms into the next crop year.

Iowa Code Chapter 562 is the state law that governs how notification must be given. Section 562.7 states the following:

562.7 Notice - how and when served. Written notice shall be served upon either party or a successor of the party by using one of the following methods:


             1. By delivery of the notice, on or before September 1, with acceptance of service to be signed by the party to the lease or a successor of the party, receiving the notice.


            2. By serving the notice, on or before September 1, personally, or if personal service has been tried and cannot be achieved, by publication, on the same conditions, and in the same manner as is provided                     forth eservice of original notices, except that when the notice is served by publication no affidavit is required. Service by publication is completed on the day of the last publication.


            3. By mailing the notice before September 1 by certified mail. Notice served by certified mail is made and completed when the notice is enclosed in a sealed envelope, with the proper postage on the                               envelope, addressed to the party or a successor of the party at the last known mailing address, and deposited in a mail receptacle provided by the United States postal service.


It is important to be aware that even if notice is appropriately given, the termination of the lease and its terms occurs on March 1 of the following year.

An example of a notice form is available on the Iowa State University Ag Decision Maker website https://www.extension.iastate.edu/agdm/wholefarm/pdf/c2-19.pdf titled "Iowa Farm Lease Termination Notice"

Professional Help from ASFMRA Members

Members of the Iowa Chapter of the American Society of Farm Managers and Rural Appraisers (ASFMRA) work with landowners of around 2 million acres across Iowa. They are experts in helping landowners and farm operators achieve their objectives with their farm leases.

The author of this article, Chad Hertz is the COO at Hertz Farm Management in Nevada, Iowa. He is a third-generation Accredited Farm Manager at Hertz and has worked with landowners, farmers and technology as a member of the Iowa Chapter for 28 years.

An ASFMRA Accredited Farm Manager (AFM) has a minimum of 4 years of experience, completed a rigorous education program and a comprehensive exam. The AFM designation represents the highest level of professionalism and commitment in the professional farm management industry.

You can connect with an ASFMRA member in your area by visiting https://www.asfmra.org/directory/find-experts2

Source: Iowa Chapter of the American Society of Farm Manager & Rural Appraisers