If you are planning to write a land lease agreement, you might have already looked at land rental contracts and land lease agreement templates to guide your writing process. There are many kinds of residential land lease agreements and vacant land lease agreements that you can refer to when you are working on this kind of project. You might want to be careful about the way that you write this kind of document since there can be many specifics that might need to be included in your land lease agreement.

Land Lease Agreement Templates

By State

What is a land lease agreement?

A land lease agreement is made to allow a person who is the owner of a piece of land to rent the land to another person or a company. This might be for personal use or business use, depending upon the kind of property that is being leased out. The most common reasons to enter into this kind of arrangement are:

  • Farming or agriculture
  • Land development
  • Commercial reasons like advertising near the freeway or billboard use

There are various kinds of land lease agreements that you might need to enter into as well. These different types of land leases can be written differently, so you need to be sure that you are aware of the various kinds and what they are used for.

  1. Agricultural Land Leases. These leases are done to allow for a property to be farmed or for a crop to be installed on the property. This might be an orchard or some other long-term commitment that takes a lot of time to establish. These kinds of leases can also govern the use of properties for livestock like cows and goats or sheep. These leases tend to be for very long spans of years due to the nature of the crop growing or animal husbandry process.
  2. Commercial Land Leases. The most common reason to create this kind of land lease agreement is to allow someone to install a billboard or some kind of sign or telecommunications tower on a property that you own. This might also be the right kind of agreement for the creation of a hotel complex or a food chain restaurant on your property.
  3. Residential Land Leases.  These leases are done to allow someone to create a trailer park or to put a small cabin in the woods. This is a much less commonly used form of the land lease agreement, but it can have its place from time to time.

Farm Land Lease Agreements

How to write a land lease agreement

These agreements can be quite simple or very complex, depending upon the needs of both parties that are involved in the agreement. You will need to have some minimum detail included in the land lease agreement that you have created so that you can be sure that it will be legally valid for your use if there is any need to revisit the document to further define the lease or to handle conflict about the way that it is being operated.

  • Who is the party that is leasing the land? This will be a business or a person, and either of these entities need to be indicated with full legal names and addresses as well as contact information. You should be sure that you are very clear about the details of this part of the agreement, so there is no confusion about who the document is referring to.
  • What is the amount that the tenant will need to pay per month? You can also indicate if the person will be paying for this amount in quarterly payments, monthly, or annually.
  • Where the land is located also needs to be indicated, and the landlord needs to indicate if there is only a portion of the land that is being used by the tenant who is renting it. This might also include a description of the way that the property is laid out and what access it has.
  • When will the lease end? This is important so that there is no confusion about the endpoint of the lease agreement. This lease might be renewed automatically, but these details also need to be agreed upon in the lease document that you are creating.
  • Can the landlord keep improvements that were made to the land by the tenant once the tenant vacates? Will the landlord have to reimburse the tenant if so?
  • What are the permitted uses for the land?
  • How will rent be paid? This might be a lump sum, an automatically deducted payment, or any other arrangement that is legal and works for both you and the person who is leasing the property.

Simple Land Lease Agreements

Other things that you might need to include in your document

Some other things that you might want to consider clarifying in your land lease agreement are:

  1. Access. Access to the land can be defined in any way that suits both tenant and landlord. The landlord is usually still allowed access to the land, but this is not always the case.
  2. Amendment. This is the clause that indicates what has to be done to change the agreement or to alter it in any way. This might also be the clause that talks about early termination or the reasons that the contract might be considered null and void.
  3. Choice of Law. This is the state or county that will provide the legal information that is used to determine legal processes surrounding the land lease agreement and its execution.
  4. Disputes. How disputes between the owner of the property and the tenant are handled should always be discussed in this section of the document. This can have a major impact on the way in which these inevitable conflicts happen, and you should be sure that you include this information in your document.
  5. Duration. If you want to stipulate specific limitations on the use of the land in question based on the dates of certain crops or if you want to split the use of the land with the tenant for some reason, this is the section of the document where you indicate duration and stipulations about a time where the property is under the control of the tenant.
  6. Facilities. There might be pre-existing buildings on your property, and you may or may not want to allow your tenants to use them.
  7. Security Requirements. If you require that there is a gate that is kept closed or that fencing is kept up to keep the public out, this needs to be included in your lease agreement. This kind of information has to be disclosed to the tenant upfront so that they can maintain this requirement from the start of their time working on the property.
  8. Government Regulations. This is the section where you indicate if there are any government requirements that need to be followed to be sure that your property use and the lease can be maintained correctly. This is not common for anything other than farming or certain production industries but you will need to be sure that your tenant is aware of these limitations so that there is no issue with federal law.

Free Land Lease Agreements

What are the pros and cons of leased land?

There are pros and cons to consider with any lease of your land. You will need to keep all of these things in mind when you decide to lease the land out to a tenant. Just like when you are leasing out a building or a house to someone, there are reasons that you might be glad that you have done so and things that can cause you regret. Be sure that you think about these considerations before you have signed a ten-year lease that you wish you had not signed.

Pros – The pros of leasing out land are that it will make money for you while you are not using it and that you will not have to take care of it during the term of the lease. This means that you will be able to just bring in rent money without much effort on your part and without having to think too hard about the considerations to do with care for the property or its cost to you as the owner.

One of the other pros to this arrangement is that some kinds of property cannot really be left undeveloped or unused for too long, or they will lose value. If you are not in a position to make the most of a property, a good lease can make sure that your property is being maintained and that its value is not diminished by just sitting empty and unused.

Cons – There are some downsides to this arrangement that you need to consider as well. The first and most obvious of these is that sometimes you might run into conflict with your tenant. This is why you need to have a good quality land lease agreement in place so that these conflicts do not escalate into legal matters.

The other downside that many people do not think about is that they will not have as much say over the use of the land that they own as they might think. You might not be able to stop your tenant from doing things that you would not prefer for them to do, and you might not have thought to prevent these actions through the language of your land lease agreement. You will also have to sometimes check up on your tenant and force them to comply with the agreement that they signed.

The biggest downside of this agreement is that if the tenant makes improvements to your land and you break the lease, you will almost always have to compensate them for these changes. This can be very expensive, and you might not want to be put in this position, especially if the improvements are of no benefit to you specifically.

Land leases can be really ideal for many reasons, but they come with many complexities that you might not immediately think of when you plan to lease your property to someone else. This is very much a look before you leap kind of agreement, and the better your land lease agreement, the easier your relationship will be with your tenant.

Land Lease Agreements Need to be Written Correctly

If you are worried about the way that your land lease agreement is laid out, be sure that you consider taking it to have a lawyer look at it for you. The better your coverage for all kinds of possible problems in the document, the better your land lease agreement will work for your needs. Be sure that you are sure that you want to lease your land to someone before you sign the document, and also be sure that you have thought about the details of this lease carefully before you decide to commit to it.

Land leases can be very beneficial to everyone involved and you will find that this arrangement is really easy to navigate when you have a good land lease agreement on your side. Make sure that you use this guide to write your land lease agreement so that you can be sure that you will not run into problems down the road.

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Tagged:AgreementCommercialLandLeaseReal EstateResidential
TemplateLab December 20th, 2022
Ryan Duffy
Ryan Duffy