Farm Lease

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This form can provide the owner and operator with a guide for developing an agreement to fit their individual situation.

This form is not intended to take the place of legal advice pertaining to contractual relationships between the two parties.

Iowa Farm Lease

This lease agreement is made this ______ day of _______________________________, ________, between

OPERATOR(S): __________________________________________________________________

Address: __________________________________________________________________

Telephone _________________ Email __________________________________

OWNER(S): __________________________________________________________________

Address: __________________________________________________________________

Telephone _________________ Email __________________________________

Owner(s)’ representative: __________________________________________________________________

Address: __________________________________________________________________

Telephone _________________ Email __________________________________

THE PARTIES AGREE AS FOLLOWS:

1. DESCRIPTION OF FARM. The Owner, in consideration of the terms specified herein, leases to the

Operator for agricultural purposes the following legally described property (REAL ESTATE):

The Real Estate is located in _________________________ Township, in _______________ County,

Iowa, containing _______ acres, more or less, and subject to all easements now existing or which the

Owner may grant in the future, such that the usefulness of the property to the Operator is not

reduced.

Easements now in effect are as follows (such as for conservation programs, wind turbines, etc.):

2. TERM OF LEASE. The term of this lease shall be for the period of _______ year(s) beginning

_________________________, and ending _________________________ and continuing thereafter

from year to year, unless either party gives notice to the other as specified by Iowa law on or before

September 1, of the final lease year, to become effective the following March 1.

FM 1538 / C2-12 Revised August 2015

_

__________date ____________owner (s) initials ____________operator (s) initials page 1 of 11

This lease is also available as a fillable form (click here to access).

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________________________________________ _________________________________________

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3. PURPOSES OF THE LEASE. The Operator shall have the right to use the property for the

production of crops and livestock subject to the following limitations:

The following housing, buildings and storage structures located on the Real Estate may be used by

the Operator for the following purposes:

Building or Structure Purpose

In the event of damage or destruction of buildings or structures listed above the Owner will have the

option to replace them or provide their functional equivalent to the Operator for the purposes

described above within a reasonable period of time, or make adjustment to the terms of this lease in

lieu of replacement.

4. CASH RENT (optional). The Operator agrees to pay the Owner cash rent for the use of part or all of

the Real Estate as follows:

Description Amount

Cropland _________acres @ $__________/acre $______________

Established hayland _________acres @ $__________/acre $______________

Pasture _________acres @ $__________/acre $______________

Pasture, per animal unit month (AUM) @ $__________/AUM (to be determined)

Buildings and storage structures, housing $______________

(or at the rate of $_________ per _________ (bushel, ton, etc.))

Total annual rent $______________

The cash rent shall be due and payable as follows:

Due Date Amount Due Date Amount

____________$____________ ____________$____________

In the event the cash rent is not paid in full by the due date(s), the Operator agrees to pay interest on

the amount of unpaid rent at the rate of _______ % annual percentage rate (APR) from the due date

until paid.

All cash rent is to be mailed or delivered to the Owner at: ___________________________________

___________ date _____________owner (s) initials _____________operator (s) initials page 2 of 11

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5. FLEXIBLE CASH RENT (optional). The amount of cash rent per acre to be paid by the Operator to

the Owner for the portion of the Real Estate designated as Cropland shall be determined as follows

(check one and fill in the blanks where needed):

_____ (a) Percent of Gross Revenue:

Actual gross revenue x ______ % (corn) or ______ % (soybeans) or ______ % (other crop)

Gross revenue will equal actual yield x actual price, plus other payments as described below.

_____ (b) Base Rent plus Bonus

Corn: Base rent $______ + (actual gross revenue – base revenue $_______) x _____%

Soybeans: Base rent $______ + (actual gross revenue – base revenue $_______) x _____%

Other crop: Base rent $______ + (actual gross revenue – base revenue $_______) x _____%

_____ (c) Other Method (describe below or attach an addendum)

The minimum rent per acre shall be $ ________ (optional)

The maximum rent per acre shall be $ ________ (optional)

The actual yield (if applicable) shall be determined as follows:

The actual price (if applicable) shall be determined as follows:

The value of any payments received as the result of participation in programs of the United States

Department of Agriculture or that accrue to the Operator of the Cropland for the crop year for

which the variable cash rent applies shall be included in the calculation of the cash rent in the

following manner:

The value of any payments received as the result of crop insurance policies that accrue to the

Operator of the Cropland for the crop year for which the variable cash rent applies shall be included

in the calculation of the cash rent in the following manner:

___________ date _____________owner (s) initials _____________operator (s) initials page 3 of 11

6. CROP-SHARE RENT (optional).

a. In the event that this lease shall be in part or in total a crop-share lease, the Owner agrees to

pay the following shares of crop expenses and the Operator agrees to give to the Owner as

rental the following shares of crop, as shown in the following schedule:

Owner’s Share of Expenses--%

Expense Corn Soybeans Oats Hay

Seed % % % % % %

Commercial fertilizers % % % % % %

Herbicides % % % % % %

Insecticides, fungicides % % % % % %

Custom applications % % % % % %

Drying fuel or charges % % % % % %

Hauling % % % % % %

Lime % % % % % %

Owner’s Share of Crops

% % % % % %

b. All other expenses related to the production of crops shall be paid for by the Operator, with

the exception of: ________________________________________________________________

______________________________________________________________________________

c. Payments received from enrolling the Real Estate described in this lease in any programs

offered by the U.S. Department of Agriculture or other federal, state, or county government

programs shall be divided as follows:

Program

ARC and/or PLC

_________________________________

% to Owner

________ %

% to Operator

________ %

d. The Owner reserves storage facilities proportionate to his or her share of the crop as indicated

in the schedule above unless otherwise provided (state exceptions, if any):________________

______________________________________________________________________________

The Operator agrees to store as much of the Owner’s share of the crops as possible in this

storage space.

e. The Operator further agrees to deliver the Owner’s share of the grain at a time and place

specified by the Owner. The Owner shall compensate the Operator for delivering the Owner’s

share of the grain as follows: _____________________________________________________

______________________________________________________________________________

f. Other crop-share lease provisions:

______________________________________________________________________________

___________ date _____________owner (s) initials _____________operator (s) initials page 4 of 11

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7. OPERATOR DUTIES AND CONDITIONS. Operator agrees to:

a. Prepare the land and plant such crops as agreed on in a timely fashion, as weather conditions

permit.

b. Manage carefully all growing crops and to harvest all crops in a timely fashion as weather

permits. In the event Operator fails to do so, Owner reserves the right, personally or through

designated agents, to enter upon the Real Estate and properly care for and harvest all growing

crops, charging the cost of the care and harvest to the Operator. In the case of termination of

this agreement, the Operator shall not perform any fall tillage nor incur any other expense for

the Owner for the following year’s crop without prior written consent of the Owner. No

hayland is to be mowed or grazed after __________________ without prior consent of the

Owner.

c. Farm the land in an efficient and steward-like manner. Land planted to corn, soybeans or

other row crops shall not exceed _______ acres each year, unless by mutual agreement.

d. Not assume any right to take any part of the harvested crop’s aboveground plant (including

burning or removing any crop residues from the property) except as stated herein:

e. Furnish to the Owner by December 15 an annual report including 1) a summary of fertilizer,

lime, and pesticide application records and 2) production or yield information about harvested

crops each year, such as may be required for participation in Farm Service Agency programs

or for setting crop insurance actual production history yields, and to use measurement

methods acceptable for these purposes.

f. Do what is reasonably necessary to control soil erosion including, but not limited to,

providing labor and normal farm equipment for the maintenance of existing watercourses,

waterways, ditches, drainage areas, terraces and tile drains, and abstaining from any practice

which will cause damage to the Real Estate. The Operator’s responsibility does not include

major reconstruction of such improvements made necessary by normal wear and tear or other

natural causes.

g. Investigate broken and inoperative tile lines and report them to the Owner. Labor for minor

repairs to broken tile, tile inlets, and tile outlets shall be the responsibility of the

_____________ and the cost of materials for their repair shall be paid by the _____________.

h. Use reasonable efforts to control weeds in fields, fence rows, road ditches, building lots, and

all other areas of the farm, utilizing one or more of the following control methods:

_____________________________, but excluding ___________________________________,

and mow road ditches only during periods permitted by Iowa law.

i. Protect all desirable vegetation, such as grass field borders, grassed waterways, wildlife cover,

shrubs and trees. Refrain from the following practices as they relate to the disturbance of

permanent vegetation: _________________________________________________________

___________ date _____________owner (s) initials _____________operator (s) initials page 5 of 11

j. Follow a mutually acceptable tillage program for each of the crops planted. Such plan shall

meet soil conservation and surface residue requirements as prescribed by the Natural

Resources and Conservation Service (NRCS) conservation plan and include the following

additional crop management practices: _____________________________________________

______________________________________________________________________________

k. At least every 4 years, conduct soil tests and provide copies of all soil test results to the

Owner as follows: ______________________________________________________________

l. Provide labor at no charge to repair preexisting buildings and fences damaged by normal

wear and tear when materials are furnished by Owner. Operator will provide labor and will

furnish all materials to repair preexisting buildings damaged by Operator’s livestock or

through Operator’s negligence. Owner shall provide all necessary materials and skilled labor

for major rehabilitation, repairs, or replacement as deemed necessary by the Owner.

Exceptions to this are: __________________________________________________________

______________________________________________________________________________

m. Refrain from allowing livestock to pasture new seeding in the year seeded without permission

of the Owner.

n. Comply with all local, state, and federal laws and regulations governing all activities related

to the application of pesticides, livestock manure and commercial fertilizers, and the

cultivation of crops. Follow label directions in the handling and application of all chemicals

used on the Real Estate, and follow all applicator’s licensing requirements. Comply with local,

state, and federal laws and regulations pertaining to groundwater contamination, manure

disposal, and hazardous waste storage or disposal.

o. Not allow any recreational use, including hunting, of the Real Estate without written consent

of the Owner. The Operator shall have the right to use the Real Estate for the following

recreational purposes: ___________________________________________________________

8. EXPENSES.

a. Except as specified in Section 6 of this lease, all materials and services related to the

production of agricultural products shall be acquired and paid for by the Operator.

b. If the amount Operator spends on lime exceeds $________ per year this expense shall be

prorated on a _________ year basis. The Operator shall be reimbursed proportionately for the

unused portion of lime if the lease is terminated earlier than the end of this period, at the rate

shown in Section 9 of this lease.

c. If the amount Operator spends on seed for perennial crops exceeds $________ per year this

expense shall be prorated on a _________ year basis. The Operator shall be reimbursed

proportionately for the unused value of seed if the lease is terminated before the end of this

period, at the rate shown in the Section 9 of this lease.

d. No expense shall be incurred for or on account of the Owner without first obtaining written

permission from the Owner. The Operator agrees to take no actions that might cause a

mechanic’s or other lien to be imposed upon the Real Estate and agrees to indemnify the

Owner if actions are taken by the Operator that result in such a lien being imposed.

___________ date _____________owner (s) initials _____________operator (s) initials page 6 of 11

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12.

COMPENSATION FOR IMPROVEMENTS. The Operator may make improvements to buildings,

fences, or water systems and other items at the Operator’s own expense and consistent with the

terms of the lease, provided consent of the Owner has been given and provided these improvements

shall not be removed when the Operator leaves the farm. The Operator shall receive compensation

from the Owner for the undepreciated value of these improvements (if any) upon termination of the

lease, provided the initial value, depreciation starting date, and annual rate of depreciation have been

agreed upon and entered in the schedule below or attached to this lease. Examples of improvements

include but are not limited to buildings, fences, tile lines, agricultural lime applications, terraces, and

forage seedings.

Type of Improvement

Depreciation

Starting Date

Value of Operator’s

Initial Contribution

Annual Rate

of Depreciation

$ %

Note: A larger form for this purpose is available from AgDM C2-07, Lease Supplement for Investing in

Improvements on a Rented Farm. A form for recording investment in conservation practices is also

available, AgDM C2-08, Lease Supplement for Obtaining Conservation Practices and Controlling Soil

Loss.

REAL ESTATE AND PERSONAL PROPERTY TAXES. The Owner agrees to pay all taxes,

assessments, or other public charges levied or assessed by lawful authority against the Real Estate.

The Operator agrees to pay all personal property taxes, assessments, or other public charges levied or

assessed by lawful authority against the Operator’s personal property on the premises, during the

term of the lease.

PARTICIPATION IN GOVERNMENT PROGRAMS. The participation in any offered program of

the United States Department of Agriculture or other federal, state, or county government agencies

for crop production control, soil and water conservation, disaster assistance, price or revenue

support, or other purposes will be discussed and decided on an annual basis or when the original

contract expires. The course of action agreed upon shall be placed in writing and signed by both

parties. A copy of the course of action so agreed upon shall be made available to each party.

The Operator agrees to preserve the cropland acreage bases allowed under USDA program provisions

and shall not combine this parcel with another farm unit for governmental program purposes

without written permission from the Owner.

The Real Estate contains the following base acres according to county FSA records:

FSA Unit Number Corn (acres) Soybeans(acres) Other(acres)

COMPENSATION FOR CROP EXPENSES. The Owner shall reimburse the Operator at the

termination of this lease for fieldwork done and for other costs incurred for future crops to be

harvested after the lease is terminated if authorized by the Owner as provided in Section 7b. Unless

otherwise agreed, the actual costs for crop inputs applied and current custom rates for field

operations performed will be used as a basis of settlement.

___________ date _____________owner (s) initials _____________operator (s) initials page 7 of 11

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13.

14.

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17.

REMOVAL OF PORTABLE EQUIPMENT AND BUILDINGS. The Owner shall not be responsible

for property owned by the Operator. The Operator shall have the right to remove from the farm any

portable equipment or buildings which the Operator has placed upon the farm at the Operator’s

expense. Such removal must be done within ______ days following the termination of the lease,

unless additional time is granted in writing. If such property is not removed, it shall be considered

abandoned and Operator shall claim no further interest in it except by written agreement between

the Owner and the Operator.

WELL AND WATER SYSTEMS. Both parties agree to the following terms relative to the repair and

replacement of wells, water lines, well pumps, septic tanks and related equipment:

HOUSING. In the event that housing is included in the structures listed in Section 3 of this lease the

following operating expenses shall be paid by the party as indicated:

Expense Paid by (mark one or indicate %)

electricity ______ Operator ______ Owner

telephone ______ Operator ______ Owner

water and sewer ______ Operator ______ Owner

garbage collection ______ Operator ______ Owner

gas or heating oil ______ Operator ______ Owner

cable or satellite TV reception ______ Operator ______ Owner

Internet connection ______ Operator ______ Owner

Minor repairs under $ ________ shall be paid by the Operator. Repairs over this amount shall be

made by mutual agreement of the Operator and Owner and paid as follows: ____________________

INSURANCE. Both the Operator and Owner will keep their respective property interests reasonably

insured against hazards and casualties. In the event of any damage to crops, buildings, or

improvements by any natural or man-made disaster, the Operator shall inform the Owner with 48

hours. The Operator shall carry the following types and minimum coverage of insurance:

a. Workers’ Compensation Insurance (if applicable).

b. Comprehensive General Liability with limits of not less than $______million.

c. Automobile Liability Insurance on all owned, non-owned, hired, or leased automotive

equipment in conjunction with operations in amounts not less than $ _______ for bodily injury

and $_________ for property damage and liability.

RIGHT OF ENTRY AND INSPECTION. The Owner may enter the real estate at any reasonable

time for the purpose of consulting with the Operator, viewing the property, making repairs or

improvements, or for other reasonable purposes that do not interfere with the Operator’s ability to

carry out regular farming operations. Upon properly served notice of termination of the lease and

permission of the Operator (provided that such permission shall not be unreasonably withheld), the

Owner reserves the right to enter the Real Estate and perform fall tillage, seeding, fertilizing or other

customary seasonal operations after the Operator has completed the harvesting of crops.

page 8 of 11 ___________ date _____________owner (s) initials _____________operator (s) initials

18.

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23.

24.

OWNER’S LIEN AND SECURITY INTEREST. The Operator acknowledges that a statutory

Landlord’s Lien exists in favor of the Owner. The Operator also grants to the Owner a security

interest on, but not limited to, all growing or mature crops on the Real Estate as provided in the

Iowa Uniform Commercial Code. The Operator shall sign security agreements and financing

statements as requested by the Owner to perfect the Owner’s security interests.

At Owner’s request, the Operator shall provide the Owner a list of potential buyers for the crops

grown on the farm. The Owner may deliver a Notice of Security Interest to those buyers and only

those buyers listed. The Operator shall not deliver or sell such crops to any buyer not listed without

first obtaining written consent of the Owner.

TRANSFER OF INTEREST. The Operator agrees not to lease or sublet any part of the Real Estate

nor assign this lease to any other person or entity, nor sublease any or all of the property described

herein without prior written permission of the Owner. This lease shall be binding upon the heirs,

assignees, or successors in interest of both parties. If the Owner should sell or otherwise transfer title

to the Real Estate, the Owner will do so subject to the provisions of this lease.

CHANGES IN LEASE TERMS. The conduct, representation, or statement of either party, by act or

omission, shall not be construed as a material alteration of this lease until such provision is reduced

to writing and executed by both parties as an addendum to this lease.

ARBITRATION. Any disputes between the Owner and Operator not covered by the terms of this

lease may be submitted by either party for arbitration by three disinterested persons, one of whom

shall be selected by the Owner, one by the Operator, and a third by the previously named two. If,

and when, disputes are submitted, a majority decision of the arbitrators shall be binding upon the

parties to the lease.

ATTORNEY FEES AND COURT COSTS. In the event a judgment is granted to either party as a

result of legal action related to the terms of this lease, the payment and discharge of all costs and

attorney fees or other expenses incurred to enforce the terms of this lease shall be handled as follows

(check appropriate statement):

_____ Each party shall pay its own attorney fees, legal expenses, and other costs.

_____ If the Operator is awarded a judgment against the Owner, the Owner shall pay all attorney

fees and legal expenses. If the Owner is awarded a judgment against the Operator, the

Operator shall pay all attorney fees and legal expenses.

CONTRACT CONSTRUCTION. Words or phrases herein, including acknowledgment, are

construed as in the singular or plural and as the appropriate gender, according to the context.

NOTICES. Any notice contemplated in this lease shall be made in writing and shall either be

delivered in person (with signed acknowledgment of receipt from the intended recipient), or be

mailed by certified U.S. mail, return receipt requested, to the last known mailing address. The notice

provisions of this section shall not apply to the notice of termination as set forth in Section 2 of this

lease agreement.

page 9 of 11 ___________ date _____________owner (s) initials _____________operator (s) initials

____________________________________________________________________________________

25. INDEMNIFICATION. The Operator shall take possession of the premises subject to the usual

hazards of operating a farm and assume all of the risks of accidents to the Operator and the

Operator’s family or agents, in pursuance of the farming operation, and in performing repairs or

improvements or other actions pursuant to this lease. The Operator agrees to indemnify, defend, and

hold harmless the Owner against any liability and/or pay for any and all damages, losses, or expenses

incurred by the Owner in connection with leased premises, beyond that covered by insurance due to

Operator’s negligence or failure to perform the terms of this lease.

The Owner agrees to disclose in writing to the Operator the existence of all known wells,

underground storage tanks, hazardous waste sites, and solid waste disposal sites on the Real Estate.

These include: _______________________________________________________________________

26. MINERAL RIGHTS. The Owner reserves all rights to any minerals on or underlying the farm.

27. YIELDING POSSESSION. The Operator agrees that on termination of the lease, the Operator will

yield possession to the Owner without further demand or notice. The premises shall be in as good

order and condition as when same were entered by the Operator. Loss by fire, tornado or other

forces beyond Operator’s control and ordinary wear and tear are excepted. If the Operator

wrongfully withholds possession of the premises after the date of termination, the Operator shall pay

to the Owner $ ________ for each day the Operator remains in possession thereafter as liquidated

damages.

28. NO PARTNERSHIP. It is understood and agreed that this lease shall not be deemed to be nor

intended to give rise to a partnership relation.

29. OTHER PROVISIONS. Other provisions to this lease agreement are listed below:

___________ date _____________owner (s) initials _____________operator (s) initials page 10 of 11

________________________________________

__________________

________________________________________

__________________

________________________________________

__________________

________________________________________

__________________

________________________________________

________________________________

30. SIGNATURES. We agree to the terms and conditions of this lease.

Operator (SIGNATURE)

Operator (PRINT NAME)

Date

Operator

(SIGNATURE)

Operator

(PRINT NAME)

Date

For (BUSINESS ENTITY)

Address

Telephone

Email

Optional Notarization (OPERATOR)

Owner (SIGNATURE)

Owner (PRINT NAME)

Date

Owner

(SIGNATURE)

Owner (PRINT NAME)

Date

By (OWNER’S REPRESENTATIVE)

Address

Telephone

Email

STATE OF ____________________, COUNTY OF ______________________ ss:

This record was acknowledged before me this ______ day of ________________, _______, by

_______________________________________________________________________________.

Signature of Notary Public

Optional Notarization

(OWNER)

STATE OF ____________________, COUNTY OF ______________________ ss:

This record was acknowledged before me this ______ day of ________________, _______, by

_______________________________________________________________________________.

Signature of Notary Public

page 11 of 11

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age,

disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in

alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence

Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.