SF 2249 (LSB 5623SV (1) 86)

SENATE FILE 2249

BY  COMMITTEE ON AGRICULTURE

(SUCCESSOR TO SSB 3079)

(COMPANION TO HF 2344 BY COMMITTEE ON AGRICULTURE)

A BILL FOR

An Act requiring that agreements to terminate farm tenancies be in writing.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 562.6, Code 2016, is amended to read as follows:
   562.6  Agreement for termination.
   If an a written agreement is made fixing the time of the termination of a tenancy, whether in writing or not, the tenancy shall terminate at the time agreed upon, without notice. Except for a farm tenant who is a mere cropper or a person who holds a farm tenancy with an acreage of less than forty acres where an animal feeding operation is the primary use of the acreage, a farm tenancy shall continue beyond the agreed term for the following crop year and otherwise upon the same terms and conditions as the original lease unless written notice for termination is served upon either party or a successor of the party in the manner provided in section 562.7, whereupon the farm tenancy shall terminate March 1 following. However, the tenancy shall not continue because of an absence of notice if there is default in the performance of the existing rental agreement.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   BILL. This bill would require parties to a lease for land used in farming to make any agreement terminating the lease in writing.
   BACKGROUND. A farm tenancy is a type of lease in which the lessor receives some form of rent from a lessee who uses the leased land to produce crops or livestock. The relevant statutes refer to the lessee as the “farm tenant” and the farm’s tenant’s leasehold interest as a “farm tenancy” (see Code section 562.1A). The lease may be made either in writing or orally. Generally, all farm tenancies terminate on March 1 at the end of the farm tenant’s crop year. However, in order to effectuate the termination, one party to the lease must have given the other party written notice of termination by the previous September 1 (Code sections 562.5 through 562.7). Without such timely written notice of the termination, the lease automatically continues, under its same terms and conditions. The following September 1 is the latest date that a party may again exercise a right of termination by written notice effective the following first day of March. One exception to the written notice requirement allows the parties to agree to the termination either in writing or orally. The parties may make the agreement any time during the term of the lease, and the agreement may provide for a termination date earlier than March 1.
   The bill, in part, is a response to the Iowa Court of Appeals’ decision in Auen v. Auen, 851 N.W.2d 547 (Iowa Ct. App. 2014).