Lease Termination or Renewal Deadline is Fast Approaching
Updated: Jun 26, 2020
This blog post is not a substitute for legal advice.
This is my final warning to many of you that you need to consider updating your leases before July 1. What will I write posts about after July 1? Your guess is as good as mine, but in Maryland, agriculture leases, unless stated otherwise in the lease, require 6 months’ notice to terminate (Md. Code Real Prop. § 8-402(b)(3)). Many of you like to tell me that notice has to be given by June 30th which is true if your lease began on Jan. 1. For many of you, your leases will begin on Jan. 1 (traditional start date for many leases in Maryland), but you should check your lease to determine if it states a date that the lease began on and calculate 6 months from that date to get your lease termination notice deadline. Regardless of when notice needs to be given, you should start considering the hard issue of should you keep leasing under the same terms, keep leasing under new terms, or terminating the lease.
I realize that Dec. 31 seems far away and you really don’t want to think about a return of cold weather, but this are considerations you need to make now. Have factors changed which could mean the lease needs to be terminated. Are you considering purchasing additional acreage and won’t be able to handle the new acreage and the leased acreage? Is the landlord considering developing or selling the acreage and will need the lease terminated in order to do that?
Another reason notice may need to be given is because both parties cannot agree on modifications to the current lease. Was the rent price set during a period of high crop prices and now projected market prices won’t support it? Does tenant need to add irrigation to the property and the landlord is unwilling? Does tenant use practices that the landlord does not approve of? In any of these cases, you may have start negotiating a new lease and realize that neither of you will agree on the necessary terms. In many of these cases, giving notice to terminate maybe necessary so both parties are on the same page that the leasing arrangement is over and new tenants need to be found.
Notice to terminate should always be given in writing by either party. Written notice just insures that both parties have a record for their records. When drafting this notice, a good place to start is on the Agriculture Law Education Initiative’s Publication Library’s page. There we have a form termination letter that you can utilize in developing your own. We also have form leases to help you to develop a written lease.