Landowners at some point are going to deal with the prospect of leasing land for themselves, or leasing their land to others. A lease is a contract and a good contract will be well thought out and written in such a manner that both parties clearly understand and agree upon the terms. Contract disputes often arise when contracts are “ambiguous”, that is when provisions are capable of more than one reasonable interpretation. If not well written, when the inevitable disputes arise then both parties are likely to view the terms most favorable to themselves and the lawyers get to earn some of your hard earned money.
Be clear about the parties to your agreement.
Don’t assume that the “president” of the Big Buck Hunting Club is actually someone with authority to bind the members.
Verify whether a legal entity actually exists and is in good standing, or if you are merely dealing with an unincorporated association.
Get the proper signatures and personal guarantees if warranted if you are not satisfied with the financial well being of a brand new LLC formed specifically to lease your land.
Be clear about defining the property boundaries being leased and any necessary easements and rights of access.
It may be prudent to have a title search performed to make sure of the rights and parties with an interest in the property. Define the obligations of the lessee to maintain the property and the obligations of the lessor. A landowner may want to make sure the lessee understands that his ability to manage his timber will take priority over the lessee’s hunting rights, even during hunting season.
Be clear about payment due dates and the consequences for not being on time with lease payments.
Will the lessee have any rights to renew the lease, or rights of first refusal to match higher offers for the lease of the property. A party might be able to secure an option to purchase the leased property at a given price as part of the deal to enter into a lease agreement. Beware of “Evergreen” provisions which might automatically renew a lease absent a written statement of intent not to renew a lease. Beware of the “small print” and read your lease agreement carefully.
A lessee making a commitment to lease and manage leased property should be very concerned with their ability to continue the lease and benefit from their efforts. A property owner/lessor should give careful consideration to drafting hold harmless language in his lease to make sure the lessee understands that he will not be responsible for injuries or mishaps on the property and that he will be held harmless for claims that might arise from the lessees’ use of the property, perhaps requiring liability waivers to be executed by all hunting club members for instance and liability insurance that names the land owner as an additional insured party.
Avoid using pre-made, cookie cutter forms
A cookie cutter, print a form off the internet approach to the lease of land is dangerous. Land by its very nature is unique. No two pieces are quite alike and great care should be given in the drafting of a good lease agreement that is appropriate for a given piece of property. Don’t play lawyer – hire one that understands land and who can ask you the right questions necessary to help you get the best deal possible, whether you are the landowner or someone trying to lease a piece of land.