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Corn+Soybean Digest

Impact of Death on Farm Leases

As a general rule, the tenant's lease of farmland continues after the death of the landowner according to terms agreed to by the landowner before death, a University of Illinois (U of I) Extension agricultural law specialist concludes.

"This holds true even for a multi-year lease," says Donald L. Uchtmann, who prepared the report, "Farm Owner's Death: Can Tenant Continue Farming under the Lease?"

The report is available in the Agricultural Law and Taxation Briefs section (http://www.farmdoc.uiuc.edu/legal/) at U of I Extension's farmdoc website.

The rule also generally applies, Uchtmann notes, if the owner subsequently becomes mentally incompetent or sells the Illinois farm to another (assuming the lease, itself, does not limit the tenant's rights in such circumstances).

"Rents that would have been paid to the now deceased or incompetent owner, or to the prior owner before the sale to a new owner, will be paid to an executor, guardian or new owner," he says.

"Special rules apply where the landowner had a 'life estate' in the farmland, rather than ownership in 'fee simple.' A special Illinois statute protects the farm tenant in some situations, but for multi-year leases, getting additional signatures on the lease may be needed to protect the tenant."

Uchtmann recommends consulting legal counsel. "Legal counsel can be very helpful to farm tenants in determining whether the farmland owner is a life owner or a fee simple owner, in crafting the lease to accommodate the particular circumstances involved, or in negotiating reasonable compensation for fall field work if the rented land is owned by a life owner who dies in the last six months of the lease year," he says.

Uchtmann's article reviews the applicable Illinois law in such situations as well as examples of how it is applied and ways tenants and farmland owners can avoid problems. The article is part of a law-related education program for Illinois family farmers made possible by a gift from the Illinois Bar Foundation.

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