Most agricultural leases run for the calendar year, January 1st- December 31st. When farmers sign these leases the thought of the lease expiring before they are able to harvest their crops may not be at the forefront of their mind. However, it should be. Agricultural leases that run for the calendar year have proven problematic for today’s farmers. Just because you have paid your rent, paid for the labor, and paid for the chemicals does not mean the Court will also allow you to harvest your crops after your lease has expired. In fact, North Carolina Courts are not the least bit sympathetic to a farmer in this situation. The Court of Appeals in Lewis v. Lewis Nursery Inc., held, “there is no right or privilege granted by law entitling a hold-over tenant to gather the annual yield of land resulting from one’s labor after the expiration of a fixed tenancy unless the landlord recognizes the tenancy for an additional period.” Lewis v. Lewis Nursery, Inc., 80 N.C. App. 246, 342 S.E.2d 45 (N.C. App. 1986).
In Lewis, the tenant, a strawberry farmer, had a lease that ran for the calendar year of 1978. The strawberry farmer still had unharvested crops on the landlord’s ground when the lease term expired on December 31, 1978. The strawberry farmer sued the landlord to be able to harvest and sell his crop. The strawberry farmer was allowed to harvest and sell his crop but had to place the money in an escrow account until the court was able to rule on who was entitled to the funds. The Court concluded both at the trial level and on appeal that the lease ended on December 31, 1978, and after that date, the strawberry plants and the proceeds therefrom belonged to the landlord.
How do you avoid these problems? Contract around it. Farming is unpredictable and there are many variables farmers cannot control. However, farmers can control the terms of their leases by including language in them that allows them to re-enter property and harvest crops after the lease has expired. This is an easy solution. In addition, there are a few statutory and equitable arguments to be made for a farmer whose lease has expired before he has harvested his crops. However such arguments are very fact specific and are expensive to make. Farmers, do yourself a favor and negotiate the terms of your lease. Include provisions that allow you to re-enter the land after the expiration of the lease to harvest your crops, even if it means paying a little bit more rent. It is worth it.
The Landlords, like all other men, love to reap where they have never sowed – Adam Smith