The Value of Land Leases on Private Property

Leases on private property come in a variety of shapes and forms. These can include but are not limited to agriculture, livestock/grazing, oil & gas pad sites and pipelines, wind turbines, cell towers, power transmission stations and lines and of course hunting and fishing leases. For many landowners, especially new landowners and/or absentee landowners and estate executors the details of lease development, management and administration is not their specialty. In this situation, not only can money be left on the table but security regarding how the property will truly be used/taken care of is skeptical.

151007181935-waggoner-tractors-farming-super-169

If negotiated and managed correctly, leases can be a valuable source of income and assist in maintaining and/or increasing the value of the property. For example, separating a recreational lease into four distinct leases (deer/turkey, quail, fishing, waterfowl) creates more income than a single all-inclusive lease. Leases should be a win-win, if at all possible but a general lack of knowledge by one party can lead to a continued state of discontent. Poorly negotiated and developed leases can lead to many years of headaches for a landowner and loss of property value.

Outstanding in your field-1

Issues can arise at not only the pertinent locations of work but also along the routes traffic utilizes to access those locations. In addition, poor on-site “use” policy and adherence to agreed upon rules by the lessee or contractors often creates tension and lack of appropriate onsite supervision can lead things astray quickly.

A major concern, especially to rangelands is the accidental introduction of non-native vegetative species of forbs, grasses and brush that can be detrimental to the native terrestrial and aquatic sites. The improper reclamation of soils, especially around pad sites and pipelines can greatly decrease the value of those locations; which for pipelines can extend for many miles impacting large amounts of acreage. Likewise overharvesting of game species and rangeland grasses will negatively impact a property while poorly chosen locations for new roads, pad sites, pipelines and powerlines can unfortunately be detrimental to beautiful views, the health of streams/creeks/ponds and cleanliness of the property. Even simple items such as who is responsible for maintaining fences, barns and roads or what happens if a wildfire occurs on the property or the property is sold during the term of the lease all need to be negotiated.

IMG_1825

Fortunately, there are companies such as Hall and Hall that can provide a team with a diverse knowledge base regarding all facets of leases. A knowledgeable team understands how to look beyond the scope of the project itself and understand the bigger picture and how a lease and its expanding footprint may impact the ranch as a whole. A good team also understand how and when to “give and take” during negotiations, what hills are worth fighting for and which ones are not, in order to meet the goals of the property representative.

grass-fed-beef-from-flickr