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Tuesday, May 31, 2011

Ind. Courts - "Oral farm lease sprouts trouble: Farm dispute a lesson in what can be left in doubt without a written contract"

Virginia Rainsbottom had this interesting story in the May 29th South Bend Tribune. Some quotes:

ARGOS -- Old-fashioned oral farm rental agreements sealed with a handshake aren't as easy to get out of as they are to get into.

Scott Gardner learned that lesson the hard way after stepping in to take care of his aging father's farm property and realizing he and his four siblings had inherited a big headache.

After Scott's dad, Harold Gardner, 92, who has dementia, was moved to a nursing home, the family discovered he had been leasing 680 acres of farmland for $85 an acre, never raising the price as farmland values and demand escalated.

According to the 2010 Purdue Agricultural Economics Report, the average value for top farmland in northern Indiana was $213 per acre.

"Some farmland is going in excess of $300," said Scott's brother, Mike, who also leases his own farmland.

Both Mike and Scott said they believed their father was being taken advantage of.

Scott Gardner said he asked the renter, Carl Prochno, for $150 per acre; Prochno did not consent, however, because that was not the agreement he had with Harold.

Gardner obtained guardianship of his father and told Prochno the rental agreement was over for 2010 ... after all, it was a verbal agreement ... right?

Wrong.

On Dec. 10, 2009, Gardner received a letter from Prochno's attorney stating that according to Indiana law, a tenancy from year-to-year is to be terminated by notice given at least three months before the expiration of the farm year, March 1.

Therefore, written notice must be given by Dec. 1 of the prior year. Otherwise the oral year-to-year cash farm lease automatically renews under existing terms.

With Prochno continuing to farm the land in April 2010, the Gardner family's estate attorney sent Prochno a written lease termination notice for 2011. * * *

Gardner said he was left high and dry by one attorney whose license had been suspended for nonrenewal.

While the suspension was confirmed by the disciplinary commission, it was not a disciplinary action and the attorney's license has since been reinstated. It took Scott Gardner nearly a year, however, to get his paperwork back.

There is much more to the story.

Posted by Marcia Oddi on May 31, 2011 01:17 PM
Posted to Indiana Courts