Mike WA and John T a lease or legal question

Guys reading some of the lease cash rent etc. posts. If you lease a piece of ground and say it gets forclosed or tied up in a divorce: do you have any protection like to harvest the crop? Also same for wood stumpage I know mike has dealt with that before. Could an institution or a court shut you down. Thanks for any replies.

Depends on how the lease was written. When you have a written lease you put every thing in it you can think of.

If it not covered in a written lease you loose.

There's nothing you can put in your lease that will defeat the lender's rights, unless the lender consents to it, and there is no instance in recorded history of them doing that. What it boils down to, if your lease is junior (that is, recorded later than) the mortgage being foreclosed, and it always is, lease is "subject to" the mortgage, and when mortgage gets foreclosed, you end up walkin' down the road, talkin' to yourself.

Notice I said "recorded" later than the mortgage- in my experience, very few leases get recorded at all, so then you're out, no matter what the seniority of the lease is. Handshakes between neighbors may be a good as gold, but between you and the bank, they're not worth the paper they aren't printed on.

But all that being said, usually you can cut a deal with the bank- you agree not to contest the foreclosure, and if you can just harvest your crop, you'll bale up the straw (or chop the stubble or disc the ground, or whatever would make it look nice and easier to sell), etc. Banks are used to paying a zillion an hour for attorneys, and if you agree not to contest anything, they should be pretty easy to deal with.

Roy, Of course these type of questions are ALWAYS subject to the "terms of the lease" and any applicable state specific statutory law butttttttttttttt that being said, at common law and subject to any terms or law to the contrary, your leasehold estate in land would protect your rights and allow you to harvest the fruits of your labor and expense and a third party bank or party to a divorce etc takes SUBJECT TO YOUR LEASEHOLD INTEREST i.e. they COULD MOST LIKELY NOT prevent you from harvesting....(Id say they prefer it to be harvested to recoup money, thats NOT to say they wont have their grubby hands out to take any money you owe the landlord mind you)

If there are liens say for seed or fertilize etc the creditor in those cases has some rights also but those creditors WANT THE HARVEST TO BE COMPLETED ALSO

As I usually post thats why its good to have a local trained professional attorney prepare or at least review the lease versus trusting unresearched lay or even professional opinions posted here INCLUDING MINE

Id guess my friend and fellow attorney Mike is more current in this area but Im speaking of the common law and leasehold estates in land in general and can NOT comment not having read the lease nor researched the laws of the state where the land is located



John T Country Lawyer

For sure I seldom see any crop leases get recorded here in Indiana either. The old common law leasehold estates like we studied years ago dont seem to come up much nowadays....

John T

It seems like the recording statutes have pretty much trumped the common law leasehold estates. Lender will not lend if there is a lease already on the books, unless the lessee is willing to subordinate the lease to the new loan.

A divorce will be subject to the lease, however, again because the lease predated the divorce.