“The calls are starting to come into the Alberta Ag-Info Centre asking about pasture rents,” says Ted Nibourg, farm business management specialist, Alberta Agriculture and Rural Development, Stettler. “What is different this year is the increase in requests for formal lease agreements. This is likely reflective of the positive financial state of the cow/calf sector.”
A written lease spells out the responsibilities and obligations of all parties involved in the lease and methods of resolving disputes.
The key components of a written lease are:
- Full names and addresses of both tenant and landowner.
- Legal description of the leased land, acres involved and agreed upon carrying capacity.
- Duration or tenure of the lease and length of the grazing season.
- Details on the amount, details and timing of the rental payment.
- Responsibilities for fence maintenance, pasture maintenance (weed control, brush control, fertility, etc.), water provision and maintenance.
- Responsibilities for major improvements (new fence, dugouts, water systems, road access, etc.).
- Restrictions and responsibilities relating to pasture management and general cattle management.
- Responsibilities for cattle supervision and the scope of the supervision.
- Responsibilities for death loss and disappearance. Responsibility for these are negotiated between the tenant and landowner subject to overall animal health, temperament and security of pasture facilities.
- Restrictions on the health status of cattle coming into the pasture.
- Right of entry.
- Method of resolving disputes.
- Lease renegotiation terms.
- Right of first refusal.
- Rights of assignment or sublease.
- Ways and means of lease termination.
- Witnessed by a third party.
- Dated and signed by all parties.
“Other clauses can be added depending on the needs of either party,” says Nibourg. “One clause that has become prevalent, especially during years of drought, is a pull clause. In the event of prolonged or late season dry periods, this clause allows the landowner to give the tenant two weeks’ notice to pull their cattle in order to avoid overgrazing and subsequent long-term damage to the pasture. The two-week notice allows the tenant time to make alternative arrangements.”
Source: Government of Alberta