Some ways the farm lessee can sour the relationship with the landowner
If you are leasing farmland, think about how your actions are perceived by the landowner.
October 16, 2012 - Author: Curtis Talley Jr., Michigan State University Extension
When a landowner enters into a farm land lease with a farmer, even if they know each other and the lease is in writing, there is still an element of trust in this business relationship. If the landowner does not know the farmer lessee, there is a lack of time to develop trust. The landowner’s emotions are hopeful and possibly a little bit fearful the leasing arrangement will be successful. To the landowner, the farm may represent a very large investment and its long term productivity and annual cash flow are high priorities. Or, the farm may have been in the family for many years, and even though the generation now owning the land may not be farmers, they want the land to produce positive cash flow, remain productive and continue as a source of family pride.
Each landowner has specific financial and non-financial goals. It is valuable in a relationship to take the time to learn about your landowner. It is common for the landowner to want a positive working relationship, the rent paid on time and the farm to have a professional appearance. Landowners want to feel good about their farm investment and not have the farm be a source of stress. Sometimes, when working in a business relationship, our actions may send messages that we did not intend. What are some of the things that landowners can perceive as making the working relationship difficult?
Here is a list of behaviors that a landlord may consider negative:
- Do not return phone calls, or if you do, wait a few weeks and make it appear that the landowner is lowest on your priority list.
- Do not provide, or be extremely slow in providing requested information. If you provide it, make it difficult to understand so the landowner has to spend a lot of time trying to figure out what you gave them.
- If you ask for reimbursement of an expense, provide no documentation, or provide a copy of the statement you paid instead of the actual receipt showing the purchases you made.
- Act offended every time a landowner has a question about your operations.
- If you are a cash lessee, refuse to provide yield documentation. You want to make sure the landowner stays uninformed so you can pay the lowest rent possible.
- If you have an annual settlement, for example in a crop share lease, make your documentation incomplete, unorganized and hard to understand. Then make little effort to provide good communication help the landlord understand it.
- When the landowner wishes to review the lease rate, instead of explaining how you determine the rate you are paying be indignant and combative.
- Make purchases for the farm without informing the landowner and then spring them on him when you are writing the rent check.
- Charge the landowner for everything you do that is not required in the lease.
Doing the opposite of the list above are the business and communication methods you will find most landowners appreciate. While not guaranteeing a positive working relationship, it will demonstrate that the person entrusted through the lease is doing everything they can to demonstrate they are organized, willing to help the landowner understand the farming business, is honest, professional and helpful to the landowner.