Smart Leases for a Tight Land Market

Thursday, March 19, 2026

Communication & relationships support more secure agreements

By Emily McKinlay

When exploring opportunities for farm growth, limited land availability and rising purchase prices often leave farmland leases as the primary option for expansion.

Farming unowned land comes with uncertainty, but transparent communication and a strong written lease agreement can mitigate some of that risk.

Creative lease structures can benefit both the landowner and the renter, explains OFA vice-president Sara Wood.

“With it being harder to find land, renters have to think creatively,” says Wood.

“Maybe the renter can’t match the lease price, but maybe money isn’t the total objective for the landowner. They could be an older couple who wants to see the next generation succeed, or they could be looking for soil improvement, or there are options for sharecropping so that the person who owns the land has a stake in how things are going.”

Martin Straathof, executive director of the Ontario Farmland Trust, says that exploring these options and drafting a strong lease should start with developing a plan and communicating it.

“Having a plan allows you to communicate more effectively,” says Straathof.

“Leases can get complex. I encourage producers to have them in writing, so both the tenant and landowner have security and an understanding of the agreed-upon terms, while leaving flexibility for new deals and opportunities.”

A strong written agreement, accompanied by a business plan, transparent communication, and a good relationship, can protect both parties in a farmland lease arrangement.

Finding land & building relationships

Available farmland can be difficult to find.

“There are formal and informal ways of seeking out land,” says Straathof.

“There is a relatively new website from Farms at Work called FindFarmland.ca. Landowners interested in finding someone to rent can post their land, or farmers can say they are looking for land.

“There are also informal ways using networks or connections with people you know in the agriculture sector. There is a lot to be said about getting your name out there.”

When land does become available, farmers with good relationships with neighbours and the community are often the first to hear about it.

“A lot of the time, neighbours talk. You might be at a meeting and hear that someone is retiring and is going to rent their land. That’s a good opportunity to have a conversation if you know them,” says Wood.

“If you don’t know them, it can be good to have a mentor to help you make that connection and build a relationship. It’s hard to go to someone on a cold call. If you know a neighbour might retire, start building a relationship ahead of time so you might be their first choice when it’s time to find a renter.”

Brady Jones started JonesView Farms in Omemee with 46 acres in 2016 and has since grown to around 1,000 acres, acquired through both online advertising and relationships with other farmers.

“My uncle is slowing down, so I’ve taken over some of his rented farmland, and we do some custom work, so when some of those farmers aren’t interested in farming anymore, we rent the farms. I also search Facebook Marketplace and Kijiji,” says Jones.

“I work with two other farmers who have beef cows and hay ground. Sometimes they want to break the hay up for a few years. They don’t think it’s worth hiring us, so they just rent the farms to me for a few years to break it up. Then I’ll seed it down into hay again around three to five years later.”

Leigh Anderson, a senior economist at Farm Credit Canada, says that there are endless possibilities for lease agreements.

“Open communication of needs and expectations on both sides, while thinking about the long-term, is the first step to a win-win arrangement for both parties,” says Anderson.

“As long as you’re in agreement, a lease can be anything. There are endless possibilities.”

Developing a relationship and clear communication creates a stronger framework for a secure lease agreement.

Creating a lease agreement

In the past, many leases were based on a discussion and a handshake. While built on trust and respect, they can create space for misunderstandings and risk.

“If the agreement is in writing, everyone should be clear on expectations on both sides,” says Anderson.

Before starting the documentation for a lease, producers should gather information about their own plans and the characteristics of the land.

“Before negotiating a lease, any potential new tenant should have a clear business plan developed,” says Straathof.

“Know what you need out of the land in terms of soil quality and classification. Do you know the heat units? Do you require infrastructure, and does the property have it, or is there an allowance in the agreement to build it?”

Anderson also recommends gathering production records if possible.

“What is the production potential and what was grown over the last few years? What were fertilizer rates?” he asks. “If the landlord can provide that information, it helps to determine a rental price that seems fair.”

All of these land characteristics will factor into the rental rate.

“Landowners can set rental rates based on what they have previously received, what other owners are getting down the road, or to cover costs or land taxes,” says Anderson.

“Some flexible rental agreements can fluctuate with commodity prices, meaning rent can go up or down depending on conditions. This helps both parties.”

He says other arrangements could include crop-share agreements or an option to share or borrow equipment.

In addition to the lease structure, a written lease agreement should also include a few important details.

“You should discuss how often the lease will renew, what day payments are due, and what you can and can’t do on the property,” says Wood.

“If the rent is not paid, what are the ramifications? Will they take the crop back? If they decide to sell the land, do you get the crop in the ground, or will you be compensated for it?”

Wood also recommends discussing any other relevant factors related to the land or any other agreements the landowner has regarding the property. This could include trail access, wind turbine lanes, or how to manage interactions with house occupants.

Anderson adds, “Discuss who pays the tax, when the rental starts and ends, if there is an option to renew or what that process of renewal would look like, and how you handle fluctuating rent markets during longer-term rentals. Ask if there are conditions on the crops you can grow, the rotations you can use, or on inputs.”

Producers should also discuss any plans for improvements.

After discussing all the relevant details, a complete written agreement can avoid surprises for both the landowner and the renter.

Mitigating risk

Farming unowned land comes with risk.

“We know that many lease agreements across the country are still just handshakes, usually with family members or longer-term relationships,” says Anderson.

Jones says that his current leases, though with people he trusts, may not be the most secure. “I’m likely not great at protecting myself. Most of my leases are handshake deals, and with good people.”

“My better land is local, and with people I trust. The stuff that is farther away is shorter-term, while I work on getting land closer to the home farm. I’m not saying I’ll give the farther stuff up, but if I lose it, it’s not a big deal.”

Written agreements improve the security of the lease for both parties.

“One of the biggest risks is the farm being sold while there is a crop in the ground. Make sure it says in the lease agreement what you are going to do if the land is sold and check with a lawyer that it is airtight,” says Wood.

“You don’t want to plant a crop and have the land sell, and the new owner harvests your crop, because then it becomes a court battle. Write up an agreement and get it certified by a lawyer.”

If producers plan to invest in farm improvements, the lease should specify who pays for the improvements, how they affect rent, and whether and how a producer is compensated for the improvements if the lease is terminated.

Ongoing, open communication is important for navigating changing markets and opportunities in a long-term lease relationship.

Jones recommends, “Be honest, and do what you say you’re going to do.”

Straathof recommends keeping landowners involved in what is happening on their land.

“Ongoing communication between a tenant and landowner can go a long way. It’s essential to a good risk management strategy to be able to communicate about challenges or opportunities. If ever unsure about something, talk to the landowner ahead of time. It’s not the type of situation where you want to take the approach of asking for forgiveness rather than asking permission.”

Wood adds, “They want to see the pride you have in their land, too. A lot of farms have been in the family for a long time, so it’s often not just an investment they are looking to flip.”

She recommends taking time to maintain the relationship.

Wood says, “Whether it’s doing something nice at Christmas, or making time for a visit once in a while or stopping to talk to them while doing fieldwork — that can mean the world to a landowner.” BF

KEY TAKEAWAYS

• Flexible lease options – such as sharecropping, soil improvement goals or equipment sharing – can help renters secure land when they can’t simply outbid competitors on cash rent.
• Farmers who build relationships and stay visible in their communities are often the first to hear when neighbours plan to rent out land.
• Written leases, backed by a clear business plan and production and land quality information, reduce misunderstandings and spell out how rent, renewals and land use will work.
• Regular, honest communication between landowner and tenant is essential to manage risk, protect improvements and keep long term lease agreements stable. BF