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Arkansas Catfish Farm
Lease Agreement

Larry Dorman
Extension Fisheries Specialist

The catfish industry is experiencing rapid growth in Arkansas. Acreage devoted to catfish production is expected to increase during the next few years. An increasing amount of this acreage will be leased. Legal guidelines to follow when executing these leases are essential to protect both the landlord and tenant.

The value of a written lease is more than the mere fact that it is written. It helps the prospective landlord and tenant discuss and agree upon the essential conditions of leasing and operating the farm.

The first step is for both parties to discuss all aspects and all problems associated with the leasing arrangement and then make a contract to fit those needs.

A satisfactory lease contains all points on which agreement should be obtained.

Provisions of Lease Agreement

The minimum essentials of a written lease are contained in sections I, II, III, and XII.

Section I – Names of Parties and Description of Property

This section names the parties to the lease contract and gives the legal description of the property or properties involved. In describing the property, the exact legal description should be used.

Section II – Term of Lease

The term (or length of time the lease is to run) should always be agreed upon by the parties to the lease and should be stated in the contract.

Section III – Rental Rates and Arrangements

Rental rates and the arrangements for payment of or disposition of the rent are a significant part of any lease.

This Lease Agreement provides two methods of paying rent: (1) Crop share rent, and (2) cash rent. In case only one method is used, the other should be stricken.

Section IV – Farm Operation

A. Details who is to furnish equipment and who is responsible for operating expenses. As a general rule, landlords supply land, wells, electrical boxes, and feed bins. Tenant supplies all other equipment and pays all operating expenses.

B. In situations in which a well is to be utilized by both parties it is important to understand how much of the well output and during what periods each party controls.

Section V – Repairs and Improvements

Misunderstanding is prevented by agreeing ahead of time on what will be done, how much, and what each party will furnish. Disagreements would be avoided, and the farm's resources would be more fully used, if landlord and tenant agreed upon what improvements were needed and then agreed upon a schedule of depreciation. The compensation schedule under Part C would need to be based on the local situation and might be somewhat different from farm to farm.

Section VI – Records

Bookkeeping is a necessary part of farm operations. The records may not be elaborate or formal accounts, but they at lease should cover all items of expense affecting both parties. The tenant is the logical party to keep the records, since he/she is in closer touch with the day-to-day operations.

Section VII – No Partnership

This section is to make the intent of the parties clear by re-emphasizing the fact that a partnership is not being created.

Section VIII – Right to Entry

This section should always be included in lease contracts. The courts hold that, for the duration of the lease, the tenant has the right to treat as trespasser any entrant on the property, including the landlord. Therefore, this statement is inserted in the contract to give the landlord the legal right to enter at times when it may be necessary.

Section IX – Arbitration (Settlement)

Differences of opinion can arise in the most harmonious relationship; consequently, it seems wise to provide means of resolving them in a democratic manner. For each problem that is taken to court, thousands are solved through compromise. Many of those resulting in court action could have been worked out through arbitration if means had been provided at the time the lease agreement was made. The section was included to encourage the use of a committee for settling differences promptly and in a friendly fashion. This section should not be constructed to mean that either or both members to the lease contract sign away rights for redress by court action, as this can never be done.

Section X –It Is Mutually Agreed That

This section provides a way in which either party can terminate the contract if the provisions of the agreement are not followed by the other party.

Section XI – Additional Agreements and Modifications

It often becomes necessary to change contractual arrangements, and one of the tests of a good lease contract is its provision for changing the plan of action. It often happens that a written contract is used for recording the agreements when a lease is first made, with changes in the initial written agreement then being made orally. This generally indicates a harmonious relationship between landlord and tenant. However, changes by oral agreement from that of the written contract should be discouraged unless the changes are recorded and made a part of the written contract.

Section XII – Signature

This is one of the four essential sections of the lease contract. The agreement becomes a contract when it is signed and witnessed. The legal term "seal" instead of the conventional term "signature" is used in the lease form to retain the traditional legal concept of contracts, which dates back to the time when executors affixed their private seals to all documents.

Lease Agreement Form

The lease form presented here will be of help to both parties in working out a satisfactory agreement. But, it can be no more than a guide. The purpose of this lease form is to make a record of agreements and to encourage landowners and tenants to consider alternative methods of operating the farm. If this form does no more than help a landowner and prospective tenant work out a satisfactory agreement of their own, it will have served its primary purpose.

Questions pertaining to the law of contracts should be referred to your attorney. You are urged to consult your attorney on all legal problems.

ACKNOWLEDGMENTS

Special thanks to Mr. Binford Pittman and Mr. Tom McArthur, catfish producers, for their assistance. Also to Dr. Nathan Stone, Extension Fisheries Specialist; Dr. Carole Engle, Coordinator of Fisheries; and Mr. Gibbs Ferguson, Attorney at Law, for reviewing the manuscript.

Original manuscript by VAN PENNINGTON, retired Extension Fisheries Specialist. Recommended by LARRY DORMAN, Extension Fisheries Specialist, Cooperative Extension Program, University of Arkansas at Pine Bluff, located in Lonoke.

FSA9069-5M-7-94R-S379

Issued in furtherance of Extension work, Act of September 29, 1977, in cooperation with the U.S. Department of Agriculture, Dr. Mazo Price, Director, Cooperative Extension Program, University of Arkansas at Pine Bluff. The Arkansas Cooperative Extension Program offers its programs to all eligible persons regardless of race, color, national origin, sex, age, or disability, and is an Equal Opportunity Employer.

ARKANSAS CATFISH FARM LEASE AGREEMENT

I. NAMES OF PARTIES AND DESCRIPTION OF PROPERTY

This lease is entered into this ______ day of __________________, 19___, between _____________________,

landlord of ________________________________________________ and _____________________, tenant of address________________________________________________ hereinafter called the landlord and tenant, address respectively, under the terms and conditions that follow a farm of approximately __________ acres, situated in_______________ County, Arkansas, and described as follows:

II. TERM OF LEASE

The term of this lease shall be ____ year(s) from _______________ ____, 19___, to _______________ ____, month day month day and this lease shall continue in effect there-after until written notice of termination is given by either party to the other on or before ____ day of _______________, before the expiration of this lease or any renewal thereof day month

III. RENTAL RATES AND ARRANGEMENTS (Option not applicable to be stricken.)

Option 1. Share Rent

As rent the tenant agrees to pay or give quantities of the following crops:

Crop	Approx. No. Acres	Units, Head, Lbs., etc.	Landlord's Share	Tenant's Share	Disposition of Landlord's Share
1.
2.
3.

Note: ____________________________________________________________________________________________

Option 2. Cash Rent

As rent or partial rent for the farm, the tenant agrees to pay the sum of ____________________ dollars per water acre and the total sum of ____________________ dollars ($__________) per year. Cash rent will be paid at (place) ___________________________, ___________________________________, and as follows: (time and schedule) __________________________.

LATE OR NONPAYMENT OF RENT

Who has possession of fish in ponds in event of late or nonpayment of rent?

IV. FARM OPERATION

A. The necessary equipment shall be furnished and farm operating expenses divided between the landlord and tenant as follows:

Equipment	Furnished By		Operating Expenses	Proportionate Share
	Landlord	Tenant		Landlord	Tenant
All Equipment			All Operating Expenses
			Exceptions

Note: ____________________________________________________________________________________________

B. WATER CONTROL

What percent of well output does tenant control _______________? If less than 100 percent, when does he have access to his share?

C. LEVEE MAINTENANCE SCHEDULE

Pond	Maintenance Interval	Monitor Method	Notes

MANAGEMENT OF LEVEES

In case tenant fills pond too full, then because of rain pond overflows with resulting damage to the levee or in case levees are rutted excessively, responsibility and extent of damage will be decided by an Arbitration Committee named in Section IX.

V. REPAIRS AND IMPROVEMENTS

A. The landlord agrees to furnish normal maintenance and repairs to:

a.

b.

c.

B. Additional major improvements to be provided by the landlord are as follows:

Kind	Date

C. Major improvements to be provided by the tenant in which compensation will be provided by the landlord in the event the lease is terminated by the landlord.

Improvement	Kind, Variety, Extent, Etc.	Date to be Accomplished	Proportion remaining unexhausted after:
			1 Yr.	2 Yr.	3 Yr.	4 Yr.	5 Yr.	6 Yr.	7 Yr.

Special Conditions and Limitations:

D. Construction and Removal of Fixtures by Tenant: With the written consent of the landlord, the tenant may add improvements at his own expense. He shall have the right to remove them even though they are legally fixtures but shall have no right to compensation for them except as mutually agreed.

VI. RECORDS

Records on all matters of joint interest shall be kept by the tenant and shall be available to the landlord upon request. The records shall specify the following items:

VII. PARTNERSHIP AGREEMENT

This lease does not give rise to a partnership. Neither party shall have authority to bind the other without his written consent.

VIII. RIGHT OF ENTRY

The landlord shall have the right, in person or by agent, to enter upon the farm for inspections, repairs, or improvements. In case this lease is not to be renewed, the landlord or the incoming tenant shall have the right before it expires to do work on the farm when doing so will cause no damage or interference to the present tenant.

IX. ARBITRATION

If parties to this lease cannot reach an agreement on any matter, or problem, the question shall be submitted to an Arbitration Committee. This committee shall be composed of three disinterested persons, one selected by each party hereto and the third by the two thus selected.

Arbitration Committee:

__________________________________

__________________________________

__________________________________

X. IT IS MUTUALLY AGREED THAT

(a) This lease shall bind and shall inure to the benefits of the heirs, executors, administrators, and assigns of both parties.

(b) If either party willfully neglects or refuses to carry out any material provision, the other party shall have the right, in addition to compensation for damage, to terminate the lease. He shall do so by written notice on the party at fault, specifying the violations of the agreement. If violations are not corrected within 30 days, the lease shall be terminated.

XI. ADDITIONAL AGREEMENTS AND MODIFICATIONS

Any additions to this contract or changes therein shall be in writing, and when so signed and executed before witnesses and attached hereto shall become a part hereof.

XII. In testimony whereof witness our hands at ______________________, Arkansas, on this ________ day of __________________, 19___A.D.

Witnesses as to both signatures,_________________________ ___________________________________ (Seal) (Landlord)___________________________________ (Seal) (Tenant)

ARKANSAS CATFISH FARM

LEASE AGREEMENT

BETWEEN

___________________________________
(Landlord)

___________________________________
(Tenant)

For ________________________________
(Common name or number of farm)

in _________________________________ _____ County,

State of ____________________________

EFFECTIVE

From ___________________________ _________ 19 ___

To ______________________________________ 19 ___

Renewed ________________________ _________ 19 ___

From ___________________________ _________ 19 ___

To ____________________________ _________ 19 ___

Lease Form Prepared by
University of Arkansas at Pine Bluff
and
Cooperative Extension Service
University of Arkansas
P. O. Box 391
Little Rock, Arkansas 72203