Elements of a Good Lease

What is a lease?

A lease is a formal, written agreement between and landlord and tenant regarding the use of the land.

Valid leases must contain:

Description of property location
Start and end date
Amount of rent
Landlord and tenant signatures

Why is it important?

Provides legal protection to landlord and tenant.
Helps reduce confusion about allowable uses of the land.
Helps determine who is responsible for maintenance and operating costs.
Smooths transitions between new landlords and/or tenants.
Promotes important conversations about care and use of the land.
Can help specify insurance needs.

Helpful Links

California Farm Link Elements of a Good Lease

Ag Lease 101 Resources

Land for Good Build-a-Lease Tool

Land for Good Sample Lease

What should be included in a lease?

(from California Farm Link)

Preamble
- Describes lessor (landowner) and lessee (tenant). Includes mailing address for each.
Description of leased property
- Attach map and use legal description if possible.
Term
- How long does the lease last? Can it be renewed?
Rent
- Lease payment amount, how and when it’ll be paid, installments, deposits.
Use
- Allowable uses, restrictions or requirements regarding production.
Operating Costs
- Who pays water district fees, electrical use, etc.
Maintenance, repairs, alterations.
- Who pays for maintenance of land/infrastructure? What changes can be made? Does the tenant need permission?
Indemnification and liability insurance
- Holds owner harmless (might also be written to also hold tenant harmless as well). Does the tenant need a liability policy?
Taxes and assessments
- Clarifies that owner is responsible for property taxes and tenant is responsible for all personal/business- related taxes.
Initial condition of premises
- Okay as-is? Improvements or upgrades required before start of lease?
Assignment or subletting
- Can the tenant sublease? If yes, include conditions.
Compliance with law
- Tenant is responsible for all applicable laws re: hazardous materials, labor, environmental regulations, etc.
Default by tenant
- What constitutes breach of lease, how it can be remedied or terminated.
Dispute resolution
- To avoid potentially costly attorneys’ fees/court fees, specify mediation and then binding arbitration.

Do I need a lawyer?

You can use sample leases or lease templates online instead of hiring a lawyer. Websites like Land for Good have free tools that will guide you through drafting a lease and provide you with sample language. However, it might be a good idea to sign the lease in front of a notary.

Leases can also be filed at your local courthouse as public records, but this is optional. Leases that are not filed are still binding.