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New Pasture Lease

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klm3030

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I need to write a lease for 200 acres of pasture and hay ground that I have inherited. The renters have been using (no written contract) this place for over 20 years and have completely run it into the ground, no fences, poor pasture, overstocked, lots of weeds and ceder trees, let their stock into the ponds, do not mow, dead cows, just a damm mess. I know when they took over it was in excellent condition. Anyway I want to present them with a lease that they can accept or "load em up", but I want to be fair, I promised my aunt I would take care of them, she thought they were great. Is there a good place on the internet to get a sample lease that I can start from and what all is usually covered in a lease?
 

Allenw

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I thought this was an old post at first. It seems like I've seen it before.

Most of what your concerned about the fences and cedar trees will come out of your pocket either directly or indirectly through lower lease payments.

What it comes down to is do you really want to do business with these people.
 

RDFF

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Value of the pasture is ENTIRELY dependent upon it's CURRENT condition, the quality of the "improvements", and it's potential to put weight on animals, MINUS any requirements placed on the renter for investment into the property in $$$ and labor. Regardless of whether the "renter in past years" took care of it or not, it's now in the condition it's currently in, and you can't expect to get "top dollar" or even "average dollar" for a property that's right now "a damn mess".

Do you expect the renter for the coming season to clear it of weeds, brush, and cedar trees, fix/replace the fences and install fencing to keep the animals out of the ponds,, improve the pasture quality with reseeding and fertilization, mow and remove dead cows? How about installing watering facilities? If that's the case, it sounds to me like THAT would be a renter you'll want to keep long term, because he's doing an awful lot (think $$$ and time) to improve YOUR pasture. These are some pretty lofty expectations, and you might want to consider "free rent" for a number of years, followed by a "reasonable" rate that would take into consideration all that he's done for YOU.

Fencing is a permanent investment... and legally, anything that's stuck into the soil belongs to the property (i.e.: that'd be YOU). Unless it's written into the contract that he can take it back out when he leaves (another expense in $$ and labor), he technically would have to leave it, even if he installed it all and paid for it all. Water lines would be the same. So would the seeding he might do, and fertilizer. He'd be improving YOUR property for YOU, which he then is "renting" from you.

My point is, if you want the RENTER to make all of these improvements, you HAVE to take that into consideration when determining a "fair" price on the rent. This has to work for both of you, or it won't work for either of you. Too many times, BOTH parties forget that, and are in it all for themself. Take care of each other in this deal... because you're in it together! If YOUR not willing to make the investment at least in $$$ to OFFER a property (which YOU own, including the improvements) with those improvements on it already to your renter, why in the world would you ever think that HE would want to make that investment, just to leave it all behind in YOUR possession, if he were to lose that property?
 

Dave

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With the guy who is there you can put any and all the demands you want in the lease. He either comes to the table or packs up and leaves. If he leaves the next one it is a good idea to have what you want in writing. I have had leases that gave me the first year free for building fence. Others that had a date to put cattle on and have them off written in the lease. Some that required weed control. Others that plainly stated what I was allowed to use for fertilizer. Right now I have BLM allotments. The government has very specific dates that the cattle can come on and be off by. Maintaining the water systems and fence is my responsibility. And there is miles on miles of fence most of which is only accessible on foot or a good horse. Write into it what ever you want but be willing to negotiate.
 

Warren Allison

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I need to write a lease for 200 acres of pasture and hay ground that I have inherited. The renters have been using (no written contract) this place for over 20 years and have completely run it into the ground, no fences, poor pasture, overstocked, lots of weeds and ceder trees, let their stock into the ponds, do not mow, dead cows, just a damm mess. I know when they took over it was in excellent condition. Anyway I want to present them with a lease that they can accept or "load em up", but I want to be fair, I promised my aunt I would take care of them, she thought they were great. Is there a good place on the internet to get a sample lease that I can start from and what all is usually covered in a lease?
Just curious, but what is the problem with cedar trees? And with cows getting in the ponds? Do you have water troughs, supplied by a well or county water, etc? How will the cattle drink if they can't get to the ponds?
 

4hfarms

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The way you describe this tenant, They most likely don't carry insurance on the land. If you dont plan on doing it, you have to include a release of liability in case of accident.
 

RDFF

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With the guy who is there you can put any and all the demands you want in the lease. He either comes to the table or packs up and leaves. If he leaves the next one it is a good idea to have what you want in writing. I have had leases that gave me the first year free for building fence. Others that had a date to put cattle on and have them off written in the lease. Some that required weed control. Others that plainly stated what I was allowed to use for fertilizer. Right now I have BLM allotments. The government has very specific dates that the cattle can come on and be off by. Maintaining the water systems and fence is my responsibility. And there is miles on miles of fence most of which is only accessible on foot or a good horse. Write into it what ever you want but be willing to negotiate.
Dave, I'm not in the right area to have access to any BLM land so don't have any perspective on that other than what I've "heard" through the grapevine, but I do have some DNR land that borders my property, and am considering potentially doing some "controlled grazing" with them. If you don't mind sharing a bit, I'm wondering what's the structure that they give you on the BLM, and in general, what kind of cost?
 

RDFF

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Value of the pasture is ENTIRELY dependent upon it's CURRENT condition, the quality of the "improvements", and it's potential to put weight on animals, MINUS any requirements placed on the renter for investment into the property in $$$ and labor. Regardless of whether the "renter in past years" took care of it or not, it's now in the condition it's currently in, and you can't expect to get "top dollar" or even "average dollar" for a property that's right now "a damn mess".

Do you expect the renter for the coming season to clear it of weeds, brush, and cedar trees, fix/replace the fences and install fencing to keep the animals out of the ponds,, improve the pasture quality with reseeding and fertilization, mow and remove dead cows? How about installing watering facilities? If that's the case, it sounds to me like THAT would be a renter you'll want to keep long term, because he's doing an awful lot (think $$$ and time) to improve YOUR pasture. These are some pretty lofty expectations, and you might want to consider "free rent" for a number of years, followed by a "reasonable" rate that would take into consideration all that he's done for YOU.

Fencing is a permanent investment... and legally, anything that's stuck into the soil belongs to the property (i.e.: that'd be YOU). Unless it's written into the contract that he can take it back out when he leaves (another expense in $$ and labor), he technically would have to leave it, even if he installed it all and paid for it all. Water lines would be the same. So would the seeding he might do, and fertilizer. He'd be improving YOUR property for YOU, which he then is "renting" from you.

My point is, if you want the RENTER to make all of these improvements, you HAVE to take that into consideration when determining a "fair" price on the rent. This has to work for both of you, or it won't work for either of you. Too many times, BOTH parties forget that, and are in it all for themself. Take care of each other in this deal... because you're in it together! If YOUR not willing to make the investment at least in $$$ to OFFER a property (which YOU own, including the improvements) with those improvements on it already to your renter, why in the world would you ever think that HE would want to make that investment, just to leave it all behind in YOUR possession, if he were to lose that property?
Klm3030,

To help make my point, let's compare two potential properties.

Here's a picture of "some pasture"... let's assume it's got brand new HT electric perimeter fencing powered by a high joule AC fencer, plus 1 wire subdivision fencing in 10 acre paddocks. It's got distributed pressurized, frost free water on it, and a good corral system and loading facility in place. It's high in fertility converted cropland, filled with high yielding, highly diverse, high quality perennial forages. This pasture has deep black loam soils with very little to no sand, underlayed with deep silty clay loam, and on average receives about 40" of rain typically well dispersed throughout the growing season, and none of it is wetlands or subject to flooding. All of the permanent infrastructure maintenance and upkeep that is a part of the property (fencing, water system, corrals, roadways, pasture reseeding, etc.) will be paid for and maintained by the pasture owner.


1607251937696.png


And here's another "pasture", let's just assume that this one is similar in size, has semi-acceptable but 40+ year old badly rusted and heavily patched barbed wire fence with all wooden posts, no subdivision fencing, one pond with no fence around it that typically dries up in late July, unless it's a wet year. Any water beyond this will have to be hauled in. The property receives about 20" of rainfall per year through the growing season, soils are rocky sandy loam, the fertility is poor, there is no corral system or load out facilities. Any and all "property maintenance" and fencing, etc., is up to the "renter" to take care of, as it's owned by an "absentee landowner" that lives in a neighboring state about 200 miles away, but the renter is generally expected to "improve" the property (language that's stated in conversation, but never spelled out in writing). However, any fencing, watering systems, fertility amendments, or "seeding" that the renter might choose to do that's anchored into or applied to the soil will be done fully at his expense but is intended to "remain with the property" (he can't take any fence, corrals or watering systems anchored into the soil in any way that he might put in back out unless they're "portable/temporary" systems, and there will be no compensation/rent adjustment for fertility or seeding improvements, brush clearing, mowing or herbicide application).

1607254758964.png

Which of these two properties would you choose for YOUR cattle to graze on, if the "price per acre" you could get them for was relatively similar for both? There's just no way that these two properties are "comparable" for "value" to the cattle owner renter, and the respective rents will have to reflect that. Often, this is the scenario that is faced by the pasture renter however... "pasture is pasture" is how the landowner views it, and so "the county average" or slightly above it ought to apply. You have to keep in mind that in most cases, "pasture ground" is relegated to the marginal ground that "isn't suitable" for "cropping". And therefore, typically it is HIGHLY variable even within every section, let alone across a whole county or region..... it'll generally be of "poor quality and condition".... i.e.: areas that are too wet, too dry, too rocky, too shallow, sandy, heavily wooded, overgrown with brush... ground that's just hard to make a living out of. Hard enough that it becomes difficult to justify spending any money on it, even the "minimal cost" of putting a fence around it to hold in livestock. That doesn't change just because somebody else is owning the cattle and they're hard up to find some space to run them on.

Every property "is what it is" at the time, and that can't be overlooked. It is what it is... right now, when your wanting to rent it. Period. Unless you now, as the property owner, are willing to "take the property from the second example" and INVEST what it takes in it to turn it into "the property from the first example", you can't expect to be able to rent it for anything even remotely close to the same price per acre. Past history is just that... past history. It's yours now, and you inherited it in the condition it's in right now, not the condition it may or may not have been in 20 some years ago. You can be frustrated with what the renter in the past may have or may not have done with it... but that won't change the facts about "what it is" today. You can drop him cold, and exchange him for another renter, and that's your prerogative. Or, you can honor the commitment you made to your aunt from whom you inherited this property, and talk with the renter and work WITH him as though he's your PARTNER to help improve the property from this point forward, now that it's in YOUR power to be able to do that.
 

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Little Joe

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If I were to lease my pasture out, I would prefer to lease it for free with written expectations of fencing, brush and weed control, liming and fertilizing requirements, rotational grazing requirements, # of head allowable, and what is considered overgrazed. I wouldn’t allow them to cut hay off either. I would want it managed just like I would manage it with the long term in mind, to me the value of that would exceed the money from rent. You would have to be realistic about the expectations also, they can’t convert it back to top notch in a year or two. Maybe have NRCS and county extension involved to help lay out a plan to bring it up over time then maintain. A good working relationship would be important. It’s your ground and you have to decide what’s important to you, but to me improving and maintaining what’s there would be more important than the money.
 

4hfarms

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I tried to rent out 30ac of mine. I didn't live in the state at the time. I let the man graze his cows until I moved to the area. Was years b4 I could get to live here. So he had control of my property.
My requirements for him were to keep the fences repaird and pasture clear of debris. No cutting of standing timber.....Sounded simple.
We would drive up for vacation a few times a year to work on the house during the years of home repair to make it habitable.
The last few times we saw saw the property we were appalled. The fences were broken, cut, down in several areas. Dead cow from months ago decomposing in the field. Cut trees crushing the fences. His personal garbage from his home in piles in the back of trees beyond the pasture... This was a gentleman's agreement with a firm handshake.
We agreed on no rent, for keeping up the property.
When he started removing what was left of our fences, we had enough! Went to the sheriffs and they told us it's our fault and there is nothing we could do. It took me almost a year to remove him from our property. I had to rebuild all the fence and take pictures with a date on it to keep his cows off our land. We were told, If they were cut or removed after the dated picture, then we could get help. We did see them grazing again after the fence was repaired and was told just fix the fence again... The fact he cut them all didn't matter until I had proof that he damaged them. And still had no recourse.
 

Dave

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Dave, I'm not in the right area to have access to any BLM land so don't have any perspective on that other than what I've "heard" through the grapevine, but I do have some DNR land that borders my property, and am considering potentially doing some "controlled grazing" with them. If you don't mind sharing a bit, I'm wondering what's the structure that they give you on the BLM, and in general, what kind of cost?
The BLM is pretty much standard on their allotemnts. As far as I know the only differences are the number of animal units allowed and the timing of grazing. They are very specific on those two points. The two allotments I have are shared allotments. One has 2 other ranchers with grazing rights. The other is bigger and has 3 others involved. The land is all land that was not claimed by homesteaders. There are multiple reasons why people didn't take it back when the government was giving it away. Steep, rocky, no water, poor soil, etc. The cost is standard. At least the part to BLM. Lots of people consider it government subsidized dirt cheap grazing. The actual cost to the rancher is higher than leasing good private pasture.

I will describe the smaller of my two allotments. It is basically 5,000 acres. Between the three of us with rights there we are allowed about 200 cow/calf pairs. The allotment is split in half. Graze one half from from April 20 to June 30 and the other half from Sept 15 to November 30. Alternate every year which pasture gets spring grazed and which gets fall grazed. There is one small year round stream and 4 developed springs on one half. 3 springs and a seasonal stream on the other half. One of those springs in right on the divide fence so it supplies troughs on each half. There is one "road" that basically goes east to west through the allotment. The east end of said road is unpassable with a 4x4 pickup. It is a little sketchy with a quad in places. The elevation varies from 2,700 feet to over 5,100 feet. Going east to west it goes from 2,700 up to 4,700, back down to 2,700 then up over 5,100, then down to 2,800 and finally up to over 4,500. That is in the course of about 4.5-5 miles. I am guessing there is 12-15 miles of fence to maintain. It is an all day adventure to take out salt. Gathering the cows is also an adventure. I like the way my neighbor describes it. He says gathering cows is not a clear cut, it is a thinning. It takes multiple trips to move the cows. Even after multiple passes some cows manage to stay hid out. Some will come down on their own when the snow flies. Some times you will find them next year. Some you just never see again. Pictures from the east end looking to the west.
 

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kilroy60

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I personally think that it's a matter of what you want out of the deal. I have two parcels of land I lease. One, it's a simple contract stating that I'm responsible for all fences and that I'll carry liability insurance, the property owner will pay all taxes, amount of lease payment and when the start and end date is. The other lease is a verbal agreement with a hand shake saying I'll pay "X" amount for a year - nothing else. This owner just wants his payment at the first of the year, every year.

Good luck.
 

RDFF

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I tried to rent out 30ac of mine. I didn't live in the state at the time. I let the man graze his cows until I moved to the area. Was years b4 I could get to live here. So he had control of my property.
My requirements for him were to keep the fences repaird and pasture clear of debris. No cutting of standing timber.....Sounded simple.
We would drive up for vacation a few times a year to work on the house during the years of home repair to make it habitable.
The last few times we saw saw the property we were appalled. The fences were broken, cut, down in several areas. Dead cow from months ago decomposing in the field. Cut trees crushing the fences. His personal garbage from his home in piles in the back of trees beyond the pasture... This was a gentleman's agreement with a firm handshake.
We agreed on no rent, for keeping up the property.
When he started removing what was left of our fences, we had enough! Went to the sheriffs and they told us it's our fault and there is nothing we could do. It took me almost a year to remove him from our property. I had to rebuild all the fence and take pictures with a date on it to keep his cows off our land. We were told, If they were cut or removed after the dated picture, then we could get help. We did see them grazing again after the fence was repaired and was told just fix the fence again... The fact he cut them all didn't matter until I had proof that he damaged them. And still had no recourse.
Get every agreement in writing. If the guy you're going to rent to won't put it in writing, then you don't need to deal with him.
 

4hfarms

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Get every agreement in writing. If the guy you're going to rent to won't put it in writing, then you don't need to deal with him.
I am now a little smarter about it. I have dealt with a few deadbeat tenements. I now live within an hour of all my rentals. I can check on them anytime.

I have to say after removing a few of the first renters from my properties...... I think I was extreamly lucky to find the people that rent them now. They all pay on time, respect the property, have not caused any problems. If only I can keep them....
 

RDFF

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The BLM is pretty much standard on their allotemnts. As far as I know the only differences are the number of animal units allowed and the timing of grazing. They are very specific on those two points. The two allotments I have are shared allotments. One has 2 other ranchers with grazing rights. The other is bigger and has 3 others involved. The land is all land that was not claimed by homesteaders. There are multiple reasons why people didn't take it back when the government was giving it away. Steep, rocky, no water, poor soil, etc. The cost is standard. At least the part to BLM. Lots of people consider it government subsidized dirt cheap grazing. The actual cost to the rancher is higher than leasing good private pasture.

I will describe the smaller of my two allotments. It is basically 5,000 acres. Between the three of us with rights there we are allowed about 200 cow/calf pairs. The allotment is split in half. Graze one half from from April 20 to June 30 and the other half from Sept 15 to November 30. Alternate every year which pasture gets spring grazed and which gets fall grazed. There is one small year round stream and 4 developed springs on one half. 3 springs and a seasonal stream on the other half. One of those springs in right on the divide fence so it supplies troughs on each half. There is one "road" that basically goes east to west through the allotment. The east end of said road is unpassable with a 4x4 pickup. It is a little sketchy with a quad in places. The elevation varies from 2,700 feet to over 5,100 feet. Going east to west it goes from 2,700 up to 4,700, back down to 2,700 then up over 5,100, then down to 2,800 and finally up to over 4,500. That is in the course of about 4.5-5 miles. I am guessing there is 12-15 miles of fence to maintain. It is an all day adventure to take out salt. Gathering the cows is also an adventure. I like the way my neighbor describes it. He says gathering cows is not a clear cut, it is a thinning. It takes multiple trips to move the cows. Even after multiple passes some cows manage to stay hid out. Some will come down on their own when the snow flies. Some times you will find them next year. Some you just never see again. Pictures from the east end looking to the west.
Thanks for sharing Dave. Good to know. I love the west, but I'm glad I'm grazing on the ground I'm on! Are you familiar with Agersen's eShepherd system, coming to the U.S. through Gallagher? That system is expensive, but it'd allow you to locate, and "shepherd/muster" your cattle from anywhere on that property (supposedly) by GPS. Agersens: Home page Pretty cool... especially in country like you're in!
 

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