Are Crops Part of the Land?
A situation that can arise between landowners and tenants is the ownership of a crop upon the termination of a lease or transfer of the property. Like most legal questions, the answer depends upon the specifics of the situation. Sometimes, crops are part of the land and sometimes the crop is personal property and not part of the land. The following is a discussion of these different scenarios.
The most common scenario, and the most common type of lease, is for annual crops such as corn and soybeans. Annual crops are generally personal property and not part of the land. If a landowner transfers the land midway through a lease, the tenant will retain ownership of the crops and will have an opportunity to harvest the crops.
Wheat is a unique situation in that it is a carryover crop, planted in the fall and harvested in summer. The wheat will generally be personal property and owned by the tenant with one exception. If the wheat was planted by the tenant before a lease for the following year was established, a court may determine that the tenant planted the wheat at their own risk. Wheat should not be planted unless a lease for the following year is in effect.
Situations relating to perennial crops such as hay largely depend on timing. If the land is transferred shortly after the crop is established, the tenant may be able to continue harvesting the crop or more likely the landowner will be liable to the tenant for the cost of establishing the crop and possibly lost profits. If the land is transferred several years after the crop is established, the tenant may not have any claims to the crop. A court will largely look to the intentions of the landlord and tenant in rendering its opinion on the tenant’s rights.
All of the above scenarios can be avoided by a good, written lease. The lease should address the tenant’s rights to the crop in the event the land is transferred during the term of the lease. The landowner and tenant can agree to address the rights of the tenant, in the event the land is transferred, in any way they wish. For tenants and landowners in current leases, the lease should be reviewed to see how tenant’s rights are addressed in the event of a transfer of the land. For situations where there is no written lease or for new leases, be sure to include a provision to address the tenant’s rights to the crop.