Law

Ohio’s Farm Lease Termination Deadline Approaching

Source: Robert Moore

A new Ohio law took effect last year that impacts some landowners who want to terminate their farm crop leases. If a farm lease does not include a termination date or a termination method, the law requires a landowner to provide termination notice to the tenant by September 1. The law was adopted to prevent late or otherwise untimely terminations by landowners that could adversely affect tenants.

It is important to note that the law only applies to verbal leases or written leases that do not include a termination date or method of notice of termination.  If a written lease includes a termination date or method of notice, the terms of the lease apply and not the termination notice law.  Also, the law does not apply to leases for pasture, timber, farm buildings, horticultural buildings, or equipment.

The notice can be provided to the tenant by hand, mail, fax, or email.  If termination is provided by September 1, the lease is terminated either upon the date harvest is complete or December 31, whichever is earlier.  While no specific language is required for the termination notice, it is good practice to include the date of notice, an identification of the leased farm and a statement that the lease will terminate on the completion of harvest or December 31.  If termination is provided after September 1, the lease continues for another year unless the tenant voluntarily agrees to terminate the lease early.

A tenant is not subject to the new law and can terminate a lease after September 1 unless the leasing arrangement provides otherwise.  Because it is generally easier for a landowner to find another tenant, even on short notice, the law protects only the tenant from untimely terminations, not landowners.

For more information, see Ohio’s New Statutory Termination Date for Farm Crop Leases law bulletin available at farmoffice.osu.edu.

Ohio Supreme Court decision explains eminent domain procedures

By: Peggy Kirk Hall, Attorney and Director, Agricultural & Resource Law Program

When a landowner legally challenges an agency’s use of eminent domain to appropriate property, Ohio law requires a trial court to hold a hearing to determine the agency’s right to make the appropriation, according to a recent decision by the Ohio Supreme Court. The Court held that an appeal to a higher court is not permissible until the trial court holds such a hearing and rules on the issues raised in the hearing. For landowner Diane Less, the ruling means the trial court–the Mahoning County Court of Common Pleas–must hold a hearing to determine whether Mill Creek MetroParks had the right to make the appropriation of her land and whether that appropriation is necessary.

The case is one of several lawsuits and long-running controversies over Mill Creek MetroPark’s use of eminent domain to appropriate land for a bike path. The Mahoning County disputes are one reason behind a current legislative proposal to revise Ohio’s eminent domain laws, which includes a prohibition against the use of eminent domain for recreational trails. The legislation is at a standstill, however, with many opponents lining up against the recreational trails and other provisions of the bill.

Basis for the decision

The current Mill Creek MetroParks v. Less case made its way to the Ohio Supreme Court after the Seventh District Court of Appeals reversed the Mahoning County court’s summary judgment decision that MetroParks was authorized to use eminent domain to take Less’ land. MetroParks appealed that decision to the Ohio Supreme Court. But rather than addressing the issue of authority to take the land, the high court focused on the procedures outlined in Chapter 163 of the Ohio Revised Code. The statutes “provide a uniform eminent domain procedure for all appropriations sought by public and private agencies,” including procedures for when a property owner contests an appropriation. The Court reviewed the statutory requirements in ORC 163.09, which require a trial court to hold a hearing when:

  1. A property owner files an answer to a petition for eminent domain that specifically denies the right to make the appropriation or the necessity for the appropriation,
  2. The answer alleges sufficient facts in support of the denial, and
  3. The appropriation is not sought in a time of war or other public exigency or not for the purpose of making or repairing roads.

Continue reading Ohio Supreme Court decision explains eminent domain procedures →

Are Crops Part of the Land?

By: Robert Moore, OSU Extension

A situation that can arise between landowners and tenants is the ownership of a crop upon the termination of a lease or transfer of the property.  Like most legal questions, the answer depends upon the specifics of the situation.  Sometimes, crops are part of the land and sometimes the crop is personal property and not part of the land.  The following is a discussion of these different scenarios.

The most common scenario, and the most common type of lease, is for annual crops such as corn and soybeans.  Annual crops are generally personal property and not part of the land.  If a landowner transfers the land midway through a lease, the tenant will retain ownership of the crops and will have an opportunity to harvest the crops.

Wheat is a unique situation in that it is a carryover crop, planted in the fall and harvested in summer.  The wheat will generally be personal property and owned by the tenant with one exception.  If the wheat was planted by the tenant before a lease for the following year was established, a court may determine that the tenant planted the wheat at their own risk.  Wheat should not be planted unless a lease for the following year is in effect.

Situations relating to perennial crops such as hay largely depend on timing.  If the land is transferred shortly after the crop is established, the tenant may be able to continue harvesting the crop or more likely the landowner will be liable to the tenant for the cost of establishing the crop and possibly lost profits.  If the land is transferred several years after the crop is established, the tenant may not have any claims to the crop.  A court will largely look to the intentions of the landlord and tenant in rendering its opinion on the tenant’s rights.

All of the above scenarios can be avoided by a good, written lease.  The lease should address the tenant’s rights to the crop in the event the land is transferred during the term of the lease.  The landowner and tenant can agree to address the rights of the tenant, in the event the land is transferred, in any way they wish.  For tenants and landowners in current leases, the lease should be reviewed to see how tenant’s rights are addressed in the event of a transfer of the land.  For situations where there is no written lease or for new leases, be sure to include a provision to address the tenant’s rights to the crop.

Webinar series on Solar Development in Ohio

Do you want to know more about what’s happening with Ohio solar energy development?  Join us for a five-part webinar series reviewing the current state of solar development in Ohio and explaining the solar development process. Attend one, several, or all of the following webinar sessions:

May 23: Solar Development Overview and Trends

• We’ll give an overview of Ohio solar development and discuss industry and technology trends, dual use of land for solar energy and agricultural production, and community and regulatory issues with solar development.

May 24: Leasing Land for Solar Development

• This session targets landowners considering a solar lease. We’ll cover pre-leasing issues, solar lease phases, common legal terms, and best management practices for leasing.

May 25: Connecting to the Electric Grid

• Approval to connect to the grid is a necessary and critical part of the solar development process. We’ll provide an overview of the electric utility system, regulatory jurisdiction, and interconnection procedures and timelines.

May 30: Solar Project Approval in Ohio

• Ohio regulatory requirements for solar projects have changed in recent years. This session explains solar project application procedures, state oversight, and new laws allowing county and township oversight of solar development. May 31: Construction and Post-Construction Considerations • What does solar project construction involve, and what happens at the end of a project’s life? We’ll cover the construction process, common construction issues, regulatory oversight of construction, and requirements for decommissioning a project in the future.

Learn more and register at go.osu.edu/solarwebinars.

2023 Regional Weeds University

OSU Extension invites crop producers, CCAs, and agribusinesses to attend a regional 2023 Ohio Weed University on Wednesday, March 1, from 9:00 a.m. to 4:00 p.m. at the Ramser 4H Activity Center, 700 Perimeter Dr. Mount Vernon, OH.

This program is designed to keep agronomic producers on the cutting edge in weed control for their cropping operations. Topics addressed will include hot topics in weed control, local weed issues, biology, identification of weeds, control strategies, and evaluating herbicides. Hands-on exercises weed identifications will be included.

Featured speakers will include Dr. Aaron Hager, Associate Professor, Department of Crop Sciences, University of Illinois; Dr. Patrick Tranel, Professor, Weed Science, University of Illinois; Dr. Alyssa Essman, visiting Professor and acting State Weed Specialist, The Ohio State University; and, Tony Dobbels, Research Specialist, The Ohio State University. This is an “in-person” event with a of the program being conducted virtually at the above locations.

Dr. Hager contributes to increased crop production through the development and implementation of integrated weed management programs. His research helps to identify and manage herbicide resistance in the most aggressive agronomic weeds. Dr. Tanel’s research and teaching is based on weed science, with an emphasis on the evolution, genetics, molecular biology, and genomics of agronomic weeds. His specialties include herbicide resistance and weedy Amaranthus species. Dr. Essman’s research is setting up a long-term research project looking at the effects of cover crops and herbicide inputs on waterhemp populations and seed bank dynamics. Dobbels manages the herbicide evaluation and field research program in row crop weed control at Ohio State.

The registration fee per person is $40.  Call OSU Extension 740-397-0401 to register.  

Registration deadline is Monday February 27.

Click here to view agenda

LLCs for Farm Machinery, Not the Liability Barrier You Might Think.

by: Robert Moore, Attorney, OSU Agricultural & Resource Law Program

A common business strategy for farming operations is to place their machinery in a separate, stand-alone LLC. The idea behind this strategy is that by putting the high-liability machinery in its own LLC the other farm assets are protected. Unfortunately, the liability protection of a machinery LLC is sometimes overstated and may not provide as much protection as intended.

The compromised liability protection of a machinery LLC is not due to a defect in LLCs, but rather it is a result of who is operating the machinery. Typically, the persons operating the machinery are the owners or employees of the farming operation. Many liability incidents involving farm machinery are the result of operator error which pulls the liability back to the farming operation.

Consider the following example. XYZ Farms is a grain operation. To mitigate the liability of having large machinery traveling on roadways, XYZ Farms establishes Machinery LLC and transfers all machinery to the LLC. An employee of XYZ Farms causes an accident while driving machinery on a roadway. Because employers are liable for the actions of employees, XYZ Farms is liable for the accident even though the machinery was held in Machinery LLC.

A machinery LLC does provide some liability protection. If the liability incident is caused solely by an issue with the machine and not the operator, the LLC may prevent liability from transferring to other assets. Again, most accidents are caused by operator error so relying on this liability protection is planning against the odds.

As seen in the example, machinery LLCs do not completely insulate owners and other assets from liability. In fact, no entity used in a farming operation is guaranteed to prevent liability exposure for the owner. Therefore, liability insurance should always be the primary liability management plan for farm operations. Business entities should be used as the backup plan if liability insurance fails to cover liability exposure.

Machinery LLCs do have other beneficial uses. One of the more common uses is to consolidate various machinery ownership among family members. Having one entity own, buy, and sell all machinery is often a simpler plan than multi-ownership. For example:

Mom and Dad, Son, and Daughter each own some machinery. Each time they need to buy a new piece of equipment, it is a challenge to determine how the trade-in is handled and who should be the new owner. Instead, they establish a machinery LLC and put all their machinery in the LLC. They each receive ownership in the LLC in proportion to the ownership in the machinery. For all future purchases, the LLC provides the trade-in and buys the new machine.

The liability protection provided by machinery LLCs may not be as thorough as sometimes expected but they can still be a valuable component of a business structure plan. They do provide some liability protection and are useful in other ways such as consolidating ownership. Before establishing a machinery LLC, be sure to have a thorough discussion with legal counsel to fully understand it’s benefits and limitations.

Save the Dates – Central Ohio Agronomy School

Due to COVID uncertainties the 2022 Central Ohio Agronomy School has been pushed to March. 

Monday March 7 – 6:30 – 9:00p.m.

Monday March 14 – 6:30 – 9:00p.m.

Monday March 21 – 6:30 – 9:00p.m.

Monday March 28 – 6:30 – 9:00p.m.

The School will be at the new Ramser 4-H Activity Center (on the fairgrounds)

700 Perimeter Dr.  Mount Vernon, OH  43050

More details to come