Oral farm lease termination notices are due September 1

Oral farm lease termination notices are due September 1 Landlords and tenants with oral lease agreements for farmland must give notice in writing to the other party by Sept. 1 if they intend to terminate the existing agreement.

That's a reminder from Don Peterson, Extension farm marketing and management economist for South Dakota State University.

Under South Dakota law, oral farm lease contracts will automatically renew on Sept. 1, 1999, for the 2000 cropping year with the same terms and conditions for 1999. That's unless written notice is given by either party for a modification by Sept. 1, Peterson said.

After such notice is given, the existing contract remains in effect until March 1, 2000, when the termination takes effect. This allows the tenant time to finish harvesting crops and graze to the end of the season, Peterson explained. An exception to this rule occurs should one party fail to live up to the terms of the original contract.

Each year, the Cooperative Extension Service receives calls from tenants who have had their farm leases wrongfully terminated after Sept. 1.

"When wrongful termination occurs, and the case goes to court, the injured party normally is awarded a 'normal' profit from the land, and sometimes punitive damages," Peterson reported.

The date of notification was changed from Nov. 1 to Sept. 1 several years ago to protect tenants who plant fall-seeded crops such as winter wheat. Sometimes farmers and landlords forget about this change, especially where there are no fall-seeded crops grown or when the agreement is for grassland, Peterson said.

Any lease agreement for more than one year must be reduced to writing to be valid, Peterson said. "An oral agreement for two years cannot be enforced by the courts," Peterson added.

"It's best to have all land-lease contracts in writing," Peterson said. "It can save a lot of headaches should one of the parties be incapacitated or forget the details of the agreement."

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