Property

Tax Webinar for Farmers and Farmland Owners

by Barry Ward, OSU Extension, Director, OSU Income Tax Schools

Are you getting the most from your tax return? Farmers and farmland owners that wish to increase their tax knowledge should consider this webinar that will address tax issues important to them. Mark your calendars for January 29th, 2018 to participate in this 2 hour webinar from 10 am to noon.

The webinar, which focuses on tax issues specific to farmers and farmland owners will offer insight into topics such as new and proposed tax legislation as well as buying and selling farmland.

OSU Income Tax Schools which are a part of OSU Extension and the College of Food, Agricultural and Environmental Sciences will offer this webinar on January 29th from 10-noon.

The two-hour program, which will be presented in a live webinar format, is targeted towards farmers and farmland owners who file their own farm taxes or simply wish to arm themselves with more tax information that will help them to better plan for tax filing.

Topics to be discussed during the webinar include:

  • New and Proposed Tax Legislation
  • Ag Income and Expenses
  • Net Operating Losses
  • Buying and Selling Farmland
  • Rental Property
  • Demolition of Structures

The cost for the webinar is $35. To register for this live webinar, go to https://farmoffice.osu.edu/osu-income-tax-schools

Registration will be open on December 15th.

The OSU Income Tax School Program is a part of OSU Extension and the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.

Ohio Supreme Court Refuses to Hear Henry County Drainage Dispute

Litigation that arose from a drainage improvement project completed in 2002 has finally ended with a decision by the Ohio Supreme Court.  The court announced today that it will not accept the case for review, which allows the ruling by … Continue reading →

Property hazards don’t disqualify immunity under Ohio’s Recreational User Statute

Peggy Hall, Asst. Professor, OSU Extension Agricultural & Resource Law Program We often explain the Ohio Recreational User’s Statute to farmland owners because the  law provides liability protection when someone asks to hunt, fish, snowmobile or conduct other recreational activities … Continue reading →

Farm Oil Spill Prevention Plans: Required or Not?

Confusion at Federal Level Leaves Farmers Unsure of SPCC Rule Compliance      Peggy Hall, Asst. Professor, OSU Extension Agricultural and Resource Law Program A common joke among attorneys is that the answer to every legal question is “maybe,” and that answer is appropriate when … Continue reading →

Ohio Court Upholds Jury Verdict against Adverse Possession Claim

Peggy Kirk Hall, Asst. Professor, OSUE Agricultural & Resource Law Program     . A recent decision by the Ohio Court of Appeals addressed two important legal standards: the proof necessary to claim title to another’s land by adverse possession and conditions allowing a trial … Continue reading →

Township Trustees, Farmers and Problem Trees, Weeds and Vegetation: Let’s all Follow the Legal Process

Peggy Hall, Asst. Professor, OSU Extension Agricultural & Resource Law Program           . Tree obstructions, unwanted vegetation and noxious weeds are serious matters for Ohio farmers, which is why several Ohio laws provide mechanisms for addressing these problems through the board … Continue reading →

Maintaining Animals is not a Fundamental Right, Court Reminds Us

Peggy Hall, Asst. Professor, OSUE Agricultural & Resource Law Program       . Does an Ohio resident have a constitutional right to keep rabbits, goats, chickens, horses, cows, ducks, turkeys, geese or other fowl on his or her property?  No, according to … Continue reading →

Burning Crop Debris is Legal, isn’t it?

Peggy Kirk Hall, Asst. Professor, OSU Extension Agricultural & Resource Law

It’s the time of year when farmers clear fields and fence rows of corn stalks, branches and other debris and use a common management practice–piling the debris and burning it in the field.  Because outdoor fires such as this create air emissions and wildfire concerns, Ohio has laws that regulate open burning activities.   Burning certain materials at certain times in certain places may violate the open burning laws and cause a health or safety issue.  It’s important to know when open burning of crop debris and field residue is permissible, and to take precautions to minimize risk and liability.

There are several areas of law in Ohio that address open burning.  The Ohio Environmental Protection Agency (OEPA) oversees regulations on the open burning of materials that may produce harmful air emissions that affect human and environmental health.  Ohio also has laws that regulate open burning to minimize the danger of wildfires; these laws may be enforced by the Ohio Department of Natural Resources (ODNR) Division of Forestry or local law officials.   Additionally, a local government might have local ordinances that regulate open burning.

In regards to crop debris in farm fields, it is typically permissible for a farmer to burn the debris.  However, the law creates duties to conduct the burn responsibly and imposes some conditions on what, where and when to burn.  Violating the laws can lead to criminal charges, fines and civil liability to harmed parties.

What can you burn?

Ohio law allows the burning of “agricultural wastes” under certain conditions.  The definition of agricultural waste includes materials such as crop debris, as well as other materials.   According to Ohio law, agricultural waste includes:

  • Waste material generated by crop, horticultural, or livestock production practices, landscape wastes that are generated in agricultural activities and woody debris and plant matter from stream flooding.
  • Bags, cartons, structural materials and containers for pesticides, insecticides, fungicides, rodenticides, miticides, nematocides, fumigants, herbicides, seed disinfectants and defoliants, if the manufacturer has identified open burning as a safe disposal procedure.  Farmers may add seed bags and cartons to the burn pile as long as the label states that open burning of the materials is safe.

Agricultural waste does not include:

  • Standing or fallen buildings, building materials, food waste, dead animals, materials made from petroleum or containing plastic, rubber, grease or asphalt.   A farmer may not add these materials to the burn pile.
  • Debris resulting from the clearing of land for new agricultural, residential, commercial or industrial development—this type of waste is defined as “land clearing waste.”  Open burning of land clearing waste requires prior written notification to Ohio EPA.

Where can you burn?

Several regulations determine acceptable locations for burning crop debris and other agricultural waste:

  • Agricultural waste may only be burned on the property where the waste is generated; the waste may not be taken to a different property for burning and a farmer cannot receive and burn waste from another property.
  • If the burning is inside a “restricted area,” then prior written notice to Ohio EPA must be provided at least ten days in advance of the burning.  A “restricted area” is an area where there is higher population density.  The law defines a restricted area as:
    • Any area inside city or village limits.
    • Any area within the 1,000-foot zone outside of a city or village with a population of 1,000 to 10,000.
    • Any area within a one-mile zone outside of a city or village with a population of more than 10,000.
    • The fire must occur in a location where it will not obscure visibility for roadways, railroad tracks or air fields.
    • The fire must be more than 1,000 feet from any neighboring building inhabited by people, such as homes, stores, restaurants, schools, etc.

When can you burn?

There are definite times when burning of crop debris and other agricultural waste is not permitted unless certain conditions are met.

  • Ohio’s wildfire laws limit open burning in rural areas during the months of March, April, May, October and November, when wildfire risk is highest due to dry vegetative conditions and dry winds.  During these months, open burning in rural areas is completely prohibited between the hours of 6 a.m. and 6 p.m., when volunteer fire departments are not well-staffed.  One exception to this prohibition applies to farmers:
    • Open burning may occur in a plowed field or garden, if the burn pile is at least 200 feet from any woodland, brush land or field containing dry grass or other flammable material.  If a farmer can’t meet this 200 foot buffer zone requirement, the farmer should wait until after 6 p.m. to conduct the burn.
    • Open burning should only occur when atmospheric conditions will readily dissipate any smoke and potential contaminants.  If weather conditions are foggy, rainy or causing air inversions, smoke and contaminants will not readily disperse and the farmer should not burn the materials.
    • Even if all other legal requirements for open burning are met, open burning is not allowed when air pollution warnings, alerts or emergencies are in effect.

What about prescribed burning?

Both the ODNR and Ohio EPA have authority over prescribed burning—intentional burns for horticultural, silvicultural, range or wildlife management practices.  Prescribed burning requires prior written permission from Ohio EPA and–if taking place during March, April, May, October or November–the burn must be conducted by a Certified Prescribed Fire Manager with permission by the Chief of ODNR’s Division of Forestry.  See the Division of Forestry’s website for more information on becoming a Certified Prescribed Fire Manager and requesting permission for prescribed burns.

Prior notice to Ohio EPA

For burns that require advance notice to the Ohio EPA, farmers may use the notification form on the Ohio EPA website at http://www.epa.ohio.gov/dapc/general/openburning.  The form seeks information about what will be burned and when and where the burn will take place; this allows the EPA to ensure that the burn is permissible.

Legal duties for conducting open burning

Ohio law also imposes duties for managing open burns.   Ohio Revised Code 1503.18 establishes a duty to prevent fire escape.   The law requires any person who starts a fire near trees, woodland or brush land to take steps to prevent the fire from escaping.  All leaves, grass, wood and inflammable material surrounding the place must be removed to a safe distance and all other reasonable precautions must be taken to keep the fire under control.   The law also states that a person should extinguish or safely cover an open fire before leaving the area.

Ohio EPA’s regulations impose several other duties for managing burns.  As mentioned above, burning of agricultural waste should take place at least 1,000 feet from any neighbor’s inhabited buildings. The wastes should be stacked and dried to provide the best practicable condition for efficient burning and weather conditions should not prevent dispersion of the smoke and emissions.  If the size of an agricultural waste pile exceeds 20 feet in diameter by 10 feet in height (or 4,000 cubic feet),  the farmer must provide written notification of the burn to the Ohio EPA at least ten days before burning.

Local laws

The above analysis explains Ohio’s laws on open burning; remember that the local government might have a local law that also regulates burning activities.  Check with your local fire department to know whether any local regulations apply to the situation.

What if a farmer violates open burning laws?

Violation of the open burning laws creates several risks for farmers.  Ohio EPA has the authority to issue fines of up to $1,000 per day per offense.  The EPA states that it takes enforcement action against repeat offenders or violations that cause significant harmful emissions.  Otherwise, EPA enforcement officers prefer to issue warnings to first-time offenders and educate on how to conduct open burns that minimize pollution impacts.  EPA enforcement officers regularly patrol their districts, investigate fires they see and investigate complaints from neighbors or others who report burning activities.  According to the EPA, the most common violations by farmers include burning substances that are not “agricultural wastes” such as tires and plastics, failing to meet the 1,000 foot setback requirement and burning waste from another property.

Conducting open burns that violate Ohio’s wildfire prevention laws can result in third degree misdemeanor charges, which carry penalties of up to $500 and 60 days of jail time per violation.   Any person may report a potential illegal burn that creates wildfire risks to the local law enforcement or Division of Forestry.

Equally and perhaps more important is the risk of civil liability from an open burning incident.  We all know that the “burn police” can’t observe everyone all the time, but civil liability doesn’t require intensive monitoring—it requires harm.  Where an open burn causes harm to people or property, civil liability may arise.  An open burn that reduces roadway visibility and results in an auto accident, escapes the property and harms neighbors or neighboring property or significantly interferes with other owners’ property use could result in a negligence or nuisance lawsuit.  The farmer who violated open burning laws or failed to properly manage the fire could be liable for all harm resulting from the fire.

For more information on Ohio’s open burning laws, visit the websites of the Ohio EPA Division of Air Pollution Control and ODNR Division of Forestry.

Protecting Interests in a Verbal Farm Lease Situation

A written lease is a valuable tool to use in a farm lease situation, but many farm lease arrangements never progress beyond a conversation and a handshake.    A written lease brings certainty to the farming arrangement by laying out important terms such as lease duration, notice of termination, payment provisions and conservation practices. Verbal farm leases are risky; problems can arise with legal enforceability and disputes over rights and obligations.  For those dealing with a verbal lease agreement, here are a few strategies for protecting interests in the verbal farm lease situation.

Put the verbal lease in writing.  The first recommendation is no surprise; attorneys have long encouraged farmers to use written farmland leases rather than relying on verbal agreements.  But many landowners and tenants are uncomfortable using a written lease, for a variety of reasons.  Consider the following concerns and recommendations for addressing them:

  • “We’ve always operated on a verbal agreement and a handshake.”  Transitioning from a long-time verbal agreement to a written lease can be awkward and uncomfortable, and the landowner or tenant farmer who wishes to make the change may be uncertain about how to introduce the change.  To address an awkward transition, consider using a third party to “intervene” and facilitate the process of converting to a written agreement.  Have a farm manager, attorney or accountant explain the reasons for moving to a written agreement and begin the process of discussing lease terms.  Provide the other party with ample time to respond and to consider its own concerns and suggested lease terms. 
  • “We don’t want everyone to know the terms of our lease.”  Landowners and tenants often express concern that a written farm lease must be recorded in the county recorder’s office, thus revealing private terms such as the price paid for the lease.  In this case, the parties may utilize a provision under Ohio law referred to as the “memorandum of lease.”  Ohio Revised Code section 5301.251 allows the parties to record a shortened form of the farmland lease.  The only provisions the parties must include in a recorded memorandum of lease are the names and addresses of the landowner and tenant, the date of executing the agreement, a description of the leased property, the starting date and duration of the lease and any rights of renewal or extension.   With the recorded memorandum of lease, there is public notice that the lease exists but key terms remain confidential between the landowner and tenant.  The parties can include a term in the written lease verifying their agreement to execute and record a memorandum of lease rather than recording the entire lease.
  • “A written lease is overwhelming or too much detail.”  It is true that farmland leases can be lengthy and detailed, although attorneys usually have sound reasons for drafting detailed leases.   Note that the parties can make a gradual transition.  Even a simple lease or a checklist can bring certainty to the relationship by outlining key obligations or providing resolutions if problems arise in the future.  Additionally, there are many good resources that simplify and explain farm lease provisions, and a few good “model” leases for reference.  For helpful resources, visit the website http://aglease101.org .

Pay attention to lease payments and possession.  If the parties can’t convert a verbal lease to a written lease, be aware that one problem with a verbal lease is that it’s not clear when the lease agreement actually begins.  In the event of a dispute, Ohio courts often look to factors such as possession and lease payments to determine the term of the lease.  Two indicators that a farm lease agreement is in place are possession of the property by the tenant coupled with acquiescence by the landowner, or a lease payment made by the tenant and accepted by the landowner.  Both parties should be mindful of these important actions and should maintain records to document these occurrences.

Address financial fairness.  Determining the payment amount for a farm lease is a challenging task, particularly when the farm economy is in flux.  Disagreement over the lease price can quickly end a verbal farm lease relationship.   Thorough research and equitable approaches can maintain the lease relationship by ensuring a financial arrangement that is responsive to the market and fair to both parties.   OSU’s Farm Management website at http://aede.osu.edu/programs-and-research/osu-farm-management contains data on farmland values and cash rental rates.  Consider a flexible cash lease to accommodate economic changes; information on flexible cash leases is also available through OSU’s Farm Management website and at http://www.aglease101.org.    

Maintain records of the lease relationship.  Good records that document the leasing history can help establish a “course of dealing” between the parties.  While a written farm lease is preferable, a record of how the parties managed the lease or handled issues in the past can be a useful point of reference for ensuring consistency in the relationship.  If there is litigation over the lease, a court might rely on proof of the parties’ course of dealing to help resolve an issue.  Both parties should maintain thorough records of payments, agreements, farm management practices, soil sampling, nutrient applications, improvements and any other facts or data that establish the details of the leasing relationship.

Maintain communication.   Don’t underestimate the power of good communication between the leasing parties.  A landowner can provide a tenant with valuable certainty by keeping the tenant informed on potential changes with land ownership or financial management.  Tenants can keep a landowner apprised of the condition of the farm property by providing reports on a regular basis, especially in the case of an absentee landowner or a crop share lease.  A report that includes pictures and a brief summary of improvements made,  management practices adopted or crop share calculations may go a long way toward ensuring a solid leasing relationship.

A written and comprehensive farm lease is a valuable tool for farmland owners and tenant farmers alike; those who still rely on verbal farm leases should carefully consider making a transition to a written lease.  Parties that continue to use a verbal farm lease face legal and financial risks, but can adopt some practices to help protect the verbal farm lease situation.  For resources and examples of written farm leases, see http://aglease101.org.