Lease Contracts

[Lazy M]

FIL has leased a 400+ acre farm for the last 25 years the farm was nothing cedars and weeds when he took it on. The owner begged him to lease it, and he finally did. They've split all expenses and profits ever since, and through hard hard work he's cleaned it up and has built it into a productive farm with around 150 cow/calves (the farm had 14 cows when he started).
Unfortunately they did all this on basically a hand shake agreement. Now the owner is in her late eighties, and her daughter has had her declared unfit and now has power of attorney. She made all kinds of new demands on FIL (including typed weekly farm reports, no purchases without written approval, etc.). He told her that he couldn't abide by these terms, and she fired him. He told her that that was fine, but he and her mother had agreed to sell all the cattle and split the profits if they ever decided to part ways. She said, of course, no way and told him that he would not even be recieving a portion of this year's calf sales. Now they're both lawyered-up and are in an ugly legal battle.
Moral of the story: if you're leasing a farm have a written contract prepared by a lawyer..

 

[Jessica06]

That's terrible. I'd quit too! Hope he gets something out of it. Wonder how long it will take her to change her tune when he's gone and she can't find someone else to run it!!

 

[bigbull338]

sounds like your fil is in a no win deal.and he will end up spending alot of money for nothing.the only way he might come out with something is he can prove the handshake deal in some way.

 

[crimsoncrazy]

She be easily proven by previous year sale receipts and bank statements. And you say he "leased" the farm. Sounds like he was more of a manager.

 

[Lazy M]

She be easily proven by previous year sale receipts and bank statements. And you say he "leased" the farm. Sounds like he was more of a manager.

Don't know the right term. They split all expenses and sales profits. They also jointly paid off all cattle purchases thru a shared bank account. What a mess..

 

[Lazy M]

sounds like your fil is in a no win deal.and he will end up spending alot of money for nothing.the only way he might come out with something is he can prove the handshake deal in some way.

His lawyer seems to think that he has a strong case.. I hope he's not getting taken for a ride..

 

[Lazy M]

That's terrible. I'd quit too! Hope he gets something out of it. Wonder how long it will take her to change her tune when he's gone and she can't find someone else to run it!!

Actually she's already cut a deal with some new folks.. we think that she was trying to force FIL out with all her silly demands to clear the way for these people.

 

[Red Bull Breeder]

FIL messed up when she fired him. He should have made it plain to her then that he could not be fired because he was a partner.

 

[bigbull338]

but the kicker is theres no signed written agreement saying that there is a partnership.the only way it might work out in his favor is if the judge looks over all the farms records during that time.i seen something like this years ago.a guy had a dairy with close to 200 milking cows.well his wife died and the kids wanted their moms half of the cows.so they took their dad to court to get it.now mind you the old man wasnt going to give them squat.so the judge ruled for the kids that herd had tobe sold.so the herd was hauled to the dairy sale.all of us dairymen knew what the deal was and that he would be buying his cows back.but before they sold some1 heard him say im going to buy my cows back dirt cheap.wrong what he said got out to all the dairymen there.and they made him pay $1200 to $1400 for the cows he managed to buy back.i know i didnt bid on any of that herd because i knew what they was doing.

 

[Son of Butch]

Moral of the story: if you're leasing a farm have a written contract prepared by a lawyer..

No... staying away from lawyers is a good thing.
Filly boy had 20+ years to sit down with the mother and daughter to talk about the farm and transition.
They could have put their understanding in writing without a lawyer. What is he blind or anti-social?

 

[regolith]

She be easily proven by previous year sale receipts and bank statements. And you say he "leased" the farm. Sounds like he was more of a manager.

Don't know the right term. They split all expenses and sales profits. They also jointly paid off all cattle purchases thru a shared bank account. What a mess..

Sounds like sharefarming. Not at all the same as management but because there's joint interest in the decisions, doesn't give as much freedom as straight out leasing.
After all this time I'd think there'd be a strong paper trail proving the fil's case.
The young lady's demands are harsh, but would be considered acceptable under a sharefarming contract. Not the sort of person I'd want to work with because it implies lack of trust if you have to go through that reporting/approval rigmarole.

 

[Lazy M]

Moral of the story: if you're leasing a farm have a written contract prepared by a lawyer..

No... staying away from lawyers is a good thing.
Filly boy had 20+ years to sit down with the mother and daughter to talk about the farm and transition.
They could have put their understanding in writing without a lawyer. What is he blind or anti-social?

Neither, he's busy. Hardest working man I know. He leases over 800 acres (well, 400 now)and owns around another 200. He is also a retired feed salesman.
He admits that he should have had a signed contract now, of course.

 

[CottageFarm]

All is probably not lost for your FIL. The absence of a contract can work both ways.
If he has good records, for even the past 10 years, that supports the verbal agreement, he has a pretty good chance of getting his share.
That being said though, a lot of that will get eaten up in attorney fees, for both sides. If the daughter has any brains at all, she'll be open to a settlement, before it goes to court and gets really expensive. If I were in your FIL place, I stick with it. Bank records, purchase and sales receipts, etc. will provide good support for his interests. Lots of agreements are made without paper, and courts still take records and other documentation into account when disputes arise.

 

[Dega Moo]

If this was truly a partnership it sounds like your FIL provided 'sweat' equity while his partner provided the cash equity. I think a couple of important questions to answer would be how did your FIL and his partner handle the business as far as taxes and the allocation of profits and losses? If they both filed and showed they shared those profits and losses I would think that would be iron clad proof of the partnership. Did your FIL ever take or show depreciation on any of the capital items which accrued such as fences or purchased bulls?

 

[Workinonit Farm]

I stick with it. Bank records, purchase and sales receipts, etc. will provide good support for his interests. Lots of agreements are made without paper, and courts still take records and other documentation into account when disputes arise.

:nod: :nod:

Indeed they do! Especially if a person has been keeping accurate,consistant and just about impeccable records.

Katherine

 

[TexasBred]

but the kicker is theres no signed written agreement saying that there is a partnership.the only way it might work out in his favor is if the judge looks over all the farms records during that time.i seen something like this years ago.a guy had a dairy with close to 200 milking cows.well his wife died and the kids wanted their moms half of the cows.so they took their dad to court to get it.now mind you the old man wasnt going to give them squat.so the judge ruled for the kids that herd had tobe sold.so the herd was hauled to the dairy sale.all of us dairymen knew what the deal was and that he would be buying his cows back.but before they sold some1 heard him say im going to buy my cows back dirt cheap.wrong what he said got out to all the dairymen there.and they made him pay $1200 to $1400 for the cows he managed to buy back.i know i didnt bid on any of that herd because i knew what they was doing.

By Texas law, the judge ruled right. Sorry.

 

[Tim/South]

It sounds like a partnership to me. She had the land, he had the knowledge and work ethic. They split costs and profits.
He could have just as easily fired her. Her power of attorney is only good for the other half, not his half.
I would go get half of my cows and calves.

 

[bigbull338]

TB i wasnt gripping about the judges ruling.the old dairymen messed his self up by gripping about it all day at the barn.and a bunch of guys that i knew ran the prices up on him.if he hadnt gripped they might not of ran the cows up on him.

 

[Lazy M]

All is probably not lost for your FIL. The absence of a contract can work both ways.
If he has good records, for even the past 10 years, that supports the verbal agreement, he has a pretty good chance of getting his share.
That being said though, a lot of that will get eaten up in attorney fees, for both sides. If the daughter has any brains at all, she'll be open to a settlement, before it goes to court and gets really expensive. If I were in your FIL place, I stick with it. Bank records, purchase and sales receipts, etc. will provide good support for his interests. Lots of agreements are made without paper, and courts still take records and other documentation into account when disputes arise.

He has vowed to spend his last dime fighting this until he gets his dues. He's so po'ed I think that he'd blow everything that he could collect in legal fees just to have the satisfaction that she'd also be left with nothing. :cowboy: