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John Burns
Posted 3/21/2009 04:31 (#651375 - in reply to #650053)
Subject: The funny thing about leases



Pittsburg, Kansas

Most of the crop share agreements around here are still verbal but we always get a written agreement with cash leases (FSA requires it anyway with cash rent). The funny thing is, it is always a one way lease pretty much anyway. I have let several landlords out of leases when they requested it (usually because of a land sale).

I'm in a deal right now that we have farmed some ground one year of a written three year cash rent lease and we are about a couple days away from planting it to corn. The landlord has a chance to sell this piece of property to an outside investor that has been buying up scrub ground around him for a ridiculous price and is offering him about double what the ground would bring for farming and pasture purposes. He wants the ground just as it is and no longer wants it farmed (don't know if he is a tree huger, oil prospector, hunter or what yet). I could force the lease and have my ground two more years but am not going to. If this potential buyer is so hot for ground I will try to get some cash relief out of the deal for letting him out of the contract because there is a good chance the buyer will go for it but if push comes to shove I will only ask for expenses. What am I going to do? Screw the landlord where he has a chance to make big money on the sale? That is not the way to gain friends and influence people. I farm quite a bit more ground for him and do you think he is going to renew the lease to me on that ground when it comes up if I screw him? I think not. Plus this guy has told other people about us and has encouraged them to seek us out to farm their ground (because their tenants were screwing them). In fact he physically delivered one of them to my doorstep to rent their ground to us. I have not knocked on a door to rent ground for many years and when I did at a younger age it rarely did any good. The ground we have rented has came to us because we treat people right, rent is paid on time or shares are always accurate and fair. If we make a mistake it is on our nickle. We take care of farms like they were our own. We try to do the right thing.

I must live in a fairy tale world to hear some of the talk on here. There are things that come up several times a year that I could force issues and save or make a few bucks here or there but it is just not worth the bad feelings. One of the things that is emphasized in my duties as a director on our Farm Credit Bank board is that we are not only to avoid any conflicts of interest but to avoid any APPEARANCE of conflicts also because just the appearance of conflict can make you seem guilty even if you are not. That is the same approach I take in my dealings with landlords, suppliers, anyone I do business with. It is just not worth doing the wrong thing and even if it occasionally cost me a few bucks rather than massaging my ego to be "right" I will take a small loss even to avoid the appearance of doing the wrong thing. On rare occasions someone will get crosswise with me for no good reason but they think I have screwed them. I will feel bad about that for days just them thinking that I screwed them, even when I have not, but there is no way to convince them otherwise. Now imagine if I really DID screw them how long I would feel bad. It is just not worth it. I like to sleep at night.

I have to believe that has been of some help over the years in my business relationships.

John

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