Texas Landowner - Agricultural Land Leasing

Okay, we're on top of 10:30, Tiffany. I guess we're going to we're going to roll roll on here.

Well, good morning, everybody. We sure are thankful that you were with us this morning, and I tell you what, it's a wonderful day out there. It's not raining cats and dogs, thank goodness. So this is the day the Lord's made; let's rejoice and be glad for that, shall we?

Um, I want to introduce this morning uh, Miss Tiffany Dial Lash. She's assistant professor and extension specialist in agricultural law for Texas A&M AgriLife Extension Service, and boy, we are just privileged and honored to have her with us today to talk about agricultural leases. And boy, this is something even I personally need to be listening to right now because I I have some opportunities in in the future to do some uh, do some additional land leasing. And man, it even though I've I've dealt with leasing and even leased land to other folks myself, it never hurts for a refresher and see what's out there and also know if and where there's any any any um, potholes that we need or pits that we need to be aware of as we go through this process. So I I trust and and just know this will be of great uh, interest and help to you as well. And I want to also let you know and don't remind you about Part Two, which will be this afternoon from 1:00 to 1:30. Mr. David Showalter, senior attorney at Showalter Law Firm here in Richmond, well, we are our special speaker, and we're going to be talking about eminent domain and some of the things that's happening there since we have all these highways seem to be converging into Richmond, Rosenberg, Gary, and Fort Bend County. So that would be a great one as well.

Well, listen, without further ado, I'm a minute into my introduction again. Thanks again for being with us. Uh, if you have questions along the way, by all means, just tap it into the into the chat, and we'll uh, and and Tiffany, I'll I'll be sure to monitor that along with you, and um, and we'll get your your questions answered if all the way throughout the uh, throughout the program or at the end. Tiffany, does it matter to you if we if I if I pop in every so often, say, "Hey, we've got a question," or would you rather feel those uh, at the end, or does it matter?

Let's yeah, let's pop in and do them as we go. I think that's easier. Um, and I'll all kind of try to take some breaks too and and give time for that as we go along.

That sounds great.

All right. Well, without further ado, Tiffany, I'm going to hand hand the floor over to you.

Thank you so much.

Yeah, Phil, thank you so much for having me. I'm excited to be with you guys today. Um, like Philip said, my name is Tiffany. I'm our extension Ag law specialist. I'm actually based up in Amarillo, so um, a little ways from you guys. Although it's been humid here this week, and I've wondered if I'm living down closer to you than in the panhandle as it normally is. But I'm excited to be here to talk a little bit about this topic of agricultural leases. It's one that I get a lot of questions on. We do a lot of programming on um, and in fact, if you look at kind of my list of programs over the last eight years or so, this is the most uh, frequently uh, requested topic. So I know it's one that you guys are all interested in, and I'm glad to be here to visit with you today about it.

Um, I have to give a disclaimer when I speak. It basically says, "I'm a lawyer; I'm not your lawyer." So uh, I'm gonna give you guys some general information today. Like Philip said, if you've got questions, please feel free to ask those. I just can't give anybody specific legal advice, and so if you need that kind of advice, you'll need to talk to your own attorney.

So here's kind of a road map of where I'm planning on going today. We're going to hit a number of different topics. We're going to start off and talk about whether a written lease is required. Then we're gonna spend some time on calculating payments—right, how much should you be charging or paying, depending on which side you're on—uh, then we're gonna talk about some just sort of like key pointers for grazing, hunting, and farm leases. Then we're going to spend just a little bit of time talking about landowner reliability considerations—um, that that's not really necessarily lease-specific, but it's really important I think for everyone to be aware of. So we'll talk about that, and then finally, I'll give you some additional resources related to leases if this is a topic that's of interest to you.

So let's start off and talk about um, written leases. So you know, when I started this job, I get a lot of people who would call and say, "Hey, can you just send me like a generic lease form? Doesn't everybody just kind of use the same thing?" And the truth of the matter is that a lot of agricultural leases look just like this picture here, right? Two guys standing in the pasture; one of them says, "Yeah, I'll lease it to you." They shake hands, and they all go on about their business. Um, so let's talk about that verbal lease in the pasture. Is that a valid lease under Texas law? The answer, as any good lawyer will tell you, always is: it kind of depends. Okay, and what it depends on is the type of lease you've got. So the general rules for the starting place is that a verbal contract is valid under Texas law. Okay, however, there is something called the statute of frauds, and the statute of fraud says that there are certain contracts that have to be in writing in order to be enforceable. And if you look here at that second bullet that we've got sort of highlighted for you, it says the lease of real estate lasting for one year or more. And so if you are going to have a real estate lease that lasts for more than a year, the statute of fraud says that actually has to be in writing in order to be legally enforceable. So if you're going to enter into one of these two, three, five-year leases, it's really important that you have that in writing because it has to be so done that way in order to be an enforceable contract. And you may think, "Well, why does it matter if it's a legally binding contract?" Well, it matters if there's a dispute, right? Because probably if there's some sort of legal dispute, the claim you'll want to make is breach of contract, and as you might imagine, the first thing a court would look for in a breach of contract case is a contract. So that can really be important, especially for those longer-term leases.

Okay, let's talk about a couple of reasons why written leases are important. Right? I think, you know, number one, they're sort of required for a long-term lease, but I think every lease really benefits from being in writing. One of the main things is is it just lets you have the time to sort of think through all of the situations that could come up. And I tell people a lot that, you know, "Listen, a lease doesn't have to be some sort of like adversarial process where we've got to have a 20-document full of a bunch of legalese and garbage." Right? We don't have to do that. Really what it is is just try to set out kind of the the thoughts of the parties, right? So you know, "If this happens, what are we going to do? Or if this goes down, how are we going to handle it?" That's really all that it is. And so I think once you sit down and sort of try to think through some of that and write it out, you're going to come up with a lot more potential what-if scenarios that you could just address and agree on upfront how to handle. Okay, so that's really beneficial.

Another thing to keep in mind is that there may be other agencies that require proof of a lease. And so kind of in order to give them a copy of a lease, you have to have a copy of a lease, right? So you'll see that come up at the FSA, in the NRCS office. You guys probably know, but that the Farm Service Agency or the Natural Resource Conservation Service, right? So if you're going to enroll in any of the different government programs, things like ARC or PLC or, you know, PRF insurance or the EQIP program, if you're going to do any of that, one of the things they'll ask you is, "Is there a lease on this property?" And if there is, they need a copy of it. So obviously, to give them a copy of the lease, you sort of have to have a copy of the lease.

Um, another thing that can come up, and this I know is a big deal for you guys being, you know, given your location, is the county appraisal district may require a copy of a lease if you're relying on that lease for your open space tax valuation, right? And you you want to make sure you've got all your ducks in a row to keep that open space property tax valuation. And so if that means you need to give a copy of a lease to that county appraisal district, again, you need to have a written lease to be able to give them.

Okay, the other thing I'll say is that you just never know what might happen. And so I'm going to use this picture here to illustrate. The guy on the bay horse in the denim shirt there is my dad. He's been involved in agriculture his entire life, right? He's been a landowner; he's been a grazing tenant; he's been a farm tenant. He's kind of done both sides of everything; he gets it all, right? The guy on the gray horse is my city boy cousin from Switzerland. Uh, he was in his 40s; this was his first time on a horse. He came over and basically told everybody he rode Seabiscuit, right? And you can take a good look at that horse there and tell he hasn't run a step since like 1985. Okay. And so here's what I use this picture to show you is if you've got a verbal lease with my dad, it's probably fine, right? Because he gets it. But heaven forbid something happens to my dad and the land gets inherited by my Swiss cousin, right? And now you've got somebody who doesn't have a clue about anything agricultural related. He doesn't know why you're doing things that just normally are done; he doesn't understand, right? Why you aren't paying more for this, you know, ground or whatever. And I just promise you, in that scenario, if you end up with a new landowner, you're going to want to have a good written lease that protects you um, as that goes forward. And I think the flip side is true as well. I mean, I you look at the numbers, and we see the amount of agricultural land that's going to change hands in the next couple of decades, and we're going to have a lot of absentee landowners who are going to be inheriting farm and ranch land who maybe don't really know how to manage it. And so I think if you're a landowner, it's a really good way to help protect your kids or your heirs if you've got them—a really good written lease, you know, that really protects them and watches out for things that they may just not know to look for themselves.

So my spiel on why you ought to have a written lease is: is it legally required? No. Is it a good idea? Absolutely. And so I really encourage you, if you've got lease agreements, get those in writing. Again, it doesn't have to be adversarial; it doesn't have to be super complicated, but if you can get something down in writing, it's really helpful in the event that something does come up or some issue arises. Okay, so that's my spiel on why we need to have our leases put in writing. Let's talk a little bit about calculating payment. This is a question we get a lot um, as far as how agricultural leases are structured. Um, you could do it any way you want. There's kind of three that are the most common, but by far the most common and I think the simplest is a cash lease, right? And that's where you just have some amount that you agree to pay. So it a lot of times it's a per-acre lease, right? Like, "We'll pay ten dollars per acre." Um, sometimes I on cattle you'll see it be a per-head lease, like I know somebody one time who was paying a dollar a cow a day uh, for a lease. Sometimes they could just be a flat lump sum, right? Like, "It's gonna be five thousand dollars for, you know, the lease." So just a cash lease; a price is set; they agree and pay it.

You could also have a crop-share lease. This is for sure more common in the um, like row-crop farm situation, right? And as the name sort of implies, there is just an agreement between the landlord and the tenant to share in some of the expenses and to share in some of the income. And how that's set up, it really depends kind of on where you are and what your crop is. Here in the panhandle, we see a lot of these on the thirds or on the quarters. So if it's a lease on the quarter, it would mean that the landlord gets a quarter of the profits, and they share in a quarter of certain expenses; three quarters would go to the tenants. And that's just sort of how those are structured. You can do something similar in a grazing lease; you just don't see it as often.

The third category is pretty rare, but you see it pop up from time to time, so I at least want to mention it. That's called a flex or a hybrid lease, and essentially it's a combination of the first two. So what you'll sometimes see is in a flex lease um, there'll be a set base rate that will flex either up or down depending on some external factor. So, for example, let's say that we are leasing ground for corn, and we say we'll pay dollars an acre, but if the price of corn gets above—I used to use four dollars in my example, but the last I saw corn was at like eight bucks—so let's say if corn gets above eight dollars, it will flex up by 50 cents an acre or whatever the number is, right? Or if the price of corn falls below three dollars, it'll flex down 50 cents. Normally that flex is based either on price or on yields, but that can be a way to sort of structure this where there's like a baseline payment, but if things are really good or really bad, there's some adjusting that can happen.

Okay, as far as which one of these you want to do, that you know, in general, it probably doesn't matter. You know, just pick which one you want and make sure that you spell it out well in a way that both parties understand. The one thing I will say about that though is that how you structure a lease may impact you other places. And so if you're entering into a new lease or if you're going to change from a cash to a crop share, from crop share to cash, you need to think about how that's going to affect you. And in particular, you want to think about that at the FSA or the NRCS office, with the IRS when it comes to self-employment taxes, and then with Social Security. How you structure these can impact how those offices look at the income you might get from your lease. Okay, so again, just keep that in mind, and I always tell people if you're gonna do a new lease or change up the payment structure, I'd chat with your accountant before you do it. So um, just something to keep an eye on there.

Okay, how much should I charge? I know some of you this might be the whole reason why you came to the presentation, uh, and I'm gonna lawyer you again and say it really does just depend on the facts. Don't worry; I'm gonna give you some numbers here in a minute, but it really does depend kind of on the facts of your situation, right? The numbers I'm going to give you are averages, and so you know, nothing really is average, and so you have to really adjust for things like what's the quality of water, how much forage is there, what's the quality of the forage, um, are there fences, how close is it to your house? Like, there are a lot of things that come into play when you're looking at how much to charge or pay. One thing I'll recommend—especially you guys have a great county agent there, and Phillip is—talk to your county extension agent, talk to other landowners or ag producers in your area, because listen, those are the people that are on the ground, right? I mean, I'm gonna give you some numbers from the government and some numbers from a group of appraisers that I think are helpful to give you a ballpark, but if you want the real scoop about what's going on in the county, these are the people that I would be chatting with to sort of see what things look like there.

I have numbers from the government here. So these numbers come from the USDA National Agricultural Statistics Service, and every year, like the first part of the year, NAS sends out kind of a little postcard asking people to do a survey to report their um, lease rates. And so what they do is they just compile those into state into averages around the country. So we're going to start off with the statewide Texas average. I'll tell you, I mean, because Texas is such a big and diverse state, these numbers aren't really helpful. We're going to drill down and get you a lot closer to home on these numbers here in just a second, but statewide average for Texas pasture land averages seven dollars per acre per year. Okay, so all of these will be listed as per-acre per-year numbers. Non-irrigated cropland it averages 30 dollars per acre per year, and irrigated cropland averages 95 per acre per year.

Okay, now let's drill down and find something that's more useful. Um, the state puts everything or NAS puts everything into a sort of region or district here, right? And they've got this map that shows you what district people are in. I pulled the numbers for the Upper Coast, which is District 90 there. Uh, the average for pasture land in the Upper Coast in 2020 was 12.50 per acre per year. Non-irrigated cropland was 42.50, and irrigated cropland was 71. Okay, they also actually drill down by county, and you can go pull up your own county. Uh, I pulled Fort Bend County for 2020. Um, irrigated cropland, 60 and 50 cents; non-irrigated cropland, 42.50; and pasture land, 18. So those are the averages from NAS. Now, again, those are only as accurate as the people responding to the survey, um, so keep that in mind. I hope it at least gives you a ballpark though. And Philip, I'll let you speak to this. I'll tell you, over the years, generally these numbers people tell me are a little bit low, but I'll let Phillip jump in here and see if he has anything to add.

They they they are some of the, you know, being a row-crop guy, uh, that that that those numbers appear to be a little bit low as to what we see in the Fort Bend County area, and um, a lot of our leases are are our cash leases as well, and there there's some there are some quarter leases out there as well, but there but that that tends to be a little on the low side. You you you can probably see those numbers right now probably probably upwards um, say like on uh, on the pasture land, you know, I've seen that between anywhere between 14 and um, between 18 and 20 dollars somewhere. But again, it's like you said, it it also uh, depends upon um, it depends—Oh, I'm sorry, I'm sorry, 2020 Fort Bend County in Fort Bend County, yeah, it's around 18. You're right, that's close, or and I've seen it like I said, up around 20. Uh, but again, again, it depends on how well the fences are in place, you know, if they're if you've got to go in and do a lot of um, you know, a lot of repair work on fences in order to put any cattle on there in the first place. And sometimes um, I I had one fella that wanted to um, want to lease some some property to me uh, right across the other side of the creek, and he said, "Phil, fences aren't in good repair." This is all in the the amount of the lease was was per acre was very reasonable. He said, "I'll go half and half with you if you can get the fence repaired." So he he was willing to split the repair of the fence.

Which, in that situation, that wasn't a bad deal at all, uh, for cropland or non-irrigated. We don't have a lot of irrigated land in this county, but a little bit on the west side, uh, but yeah, that's I would say um, irrigated is probably about right. I'd say non-irrigated is probably, probably a little bit more, uh, upwards above 43.50 easy, between 50 or 60 possibly. Okay, so, uh, yeah, yeah, that's that's pretty good. Okay. Well, like I said, at least gives you kind of a ballpark, but that right there is the reason you want to talk to your county agent because they're just going to have a little bit more, uh, information.

So what I will tell you is if you need information on other parts of the state, they've got this, or anywhere in the country really, they've got the same data for every state, every county. I can get you a link to that if anybody needs it, let me know. I'll be glad to send that along. Other publication that I think offers you some really good information on this front is um, the Texas Rural Land Trends Report, uh, so this is put out every year by the American Society of Farm Managers and Rural Appraisers, uh, and it's a really great publication. I, I've taken some screenshots here to show you. You'll see right here that we're looking at 2019, and that's because they don't, you know, they're a year behind, so they like come out the next year. 2020 has not come out yet, but I think that we're probably expecting that within the next month or so, um, so it might be something to keep an eye on. But for 2019, I can give you the numbers here. And so what I think is so great about this publication is it sets out, it breaks the state into seven regions, and then as you'll see here, it breaks those into little sub-regions or little clusters of counties, um, to sort of drill down and get a little bit closer to home. And then what you'll see over here that they do is they break that into different types of pastures, so you might have, you know, pasture land, you might have timberland, you might, there are some places that has irrigated cropland, dry land cropland, some areas actually even show hunting leases as well. And what you'll see is you get the value ranges, which that's, you know, the value of the property for you to purchase it, and it also gives you a rental range. So here it shows, uh, Fort Bend County is in this Houston area, it shows 10 to 20 an acre for native and improved pasture, so you've got that range there. So unfortunately, probably because you guys are lumped in with Houston, there, there's not a ton of good information, I don't feel like for you guys in this report, but you may be able to look at some of the other areas around you, or if you've got land in some of these other counties, I think it's a real good resource to have. Okay, uh, if you want a link to that, it's again, it's called the Texas Rural Land Trend Report, you can Google that, or if anybody needs a link, I'll make sure and get that for you. Okay. Any questions so far?

Hey Tiffany, yeah, um, I do know also that every year, and I think it's in July, uh, the Texas A&M AgriLife polls all the, the extension agents in the state, and we, we send in, uh, trending rental numbers as well, and they actually produce a, a report statewide for, uh, and it goes by region. So, uh, again, if you have any questions, give us a call because we, we can compare what our rates are, say, to other parts of the state. But I mean, it's not only just land rental rates, I mean there's, there's, uh, like there's rates for, for what it would cost to clear land, or for building fence, or for working cattle, or for hauling livestock, or, or, or anything like that. So, uh, there's, there's that, that source as well. So yeah, that's a great publication that, um, that comes out. You may know better than me though, but I think they do it every other year from the Aggie code. Okay, but it's great, it's great information, like you say, it goes even beyond just leases, so it's something for sure to check out. Sure, uh, Rachel, it looks like has her hand up. Rachel, did you have a question?

Yes, I was wondering if you would be open to sending the information that you just mentioned.

Glad to. Yes, if I had been on top of things, Rachel, I would have linked it in the chat box, but I have not. So what I'll do for you guys, um, I think that Philip probably has all of your email addresses. I'll shoot you an email, uh, through him after the program that'll have all these links in it, and I'll put a copy of my slides if that would be helpful.

That'll work. Yes, and we'll, I'll definitely get that, get that to you, Rachel.

No problem at all. Thank you. Anyone else with questions? Okay, looks like we're good. So let's shift gears now, and like I said, what we're going to do now is we're going to look at kind of the three main types of ag leases: grazing leases, hunting leases, livestock leases, uh, and kind of just hit some of the high notes. Now listen, I think we're gonna do like three or four points for each of these. We could be here and do 40, right? So, um, we're really just hitting the high notes. I just kind of pulled three of the ones I think that are the most important to sort of talk through on each of the leases. Um, when we get to the end here, I'm going to give you some information on a handbook that we have related to agricultural leases where you can find like checklists for what to include in a lease. Those checklists are pages long, so you'll have that information, but again, it just today we're going to just sort of hit the high notes. So let's start with a grazing lease. Right. If you're going to lease your lane to somebody to graze cattle or sheep or goats or anything like that, the first thing I think you want to think about is setting a stocking rate. Okay, and a stocking rate is very simply just, you put a limit on the number of animals that are allowed to be on the property. Okay, I have on here a landowner wants this term, but a tenant may not. And so I think that this is a good way to sort of look at this is if I am writing a lease as a landowner, this is probably the most important term I'm going to put in there, right? Because as a landowner, I want to make sure that I don't have a tenant who comes out there, turns out way too many cows, grazes my grass all down to the dirt where it looks like the carpet here in my office, and then I'm stuck, right? And the next year I can't lease it, there's no grass on my open space exemption may be at risk. I don't want that. So for a landowner, I think a stocking rate's the most important term you can ask for. If I was drafting a lease for a tenant, I probably wouldn't put a stocking rate term in there. Now I'm not saying if the other side asked for it I wouldn't agree to it, but it's not something that would really benefit me, right? So as you look at all of these, uh, lease, you know, information, as you look at checklists, as you look at any sample leases, as you're thinking about your lease, sort of ask yourself, is this a term that is helpful for me? Right? Is this something I would want to include? So one thing when you're thinking about your stocking rate, right, that really, it greatly varies, obviously, different parts of the state. The stocking rate in Fort Bend County would be vastly different than the stocking rate here in the panhandle in Carson County. It also can really vary though, based on your particular property, right? We talked about the amount and the quality of forage. If you need some help figuring that out for yourself, again, that's where county agent can be super, uh, helpful. We've got range specialists with Texas A&M. I think it's probably Megan Clayton is the, the person who takes care of Fort Bend County down that way. They can really help sort of walk you through setting some of that. Okay. Another thing to think about as you're setting that stocking rate is the size of the animal. So, for example, let's say that I kind of do the analysis and I think my place can hold 30 cows. If I'm thinking about thousand-pound Angus cows, and my tenant shows up with a bunch of, you know, fifteen-hundred-pound Simmental cows, man, we've got, we kind of had a miscommunication there, right? And maybe my grass can't handle that many cows of that size. So one thing you can think about doing and your stocking rate is setting it as an animal unit rather than a per-head rate. Okay. So what an animal unit is, 1,000 pounds of animal is one animal unit. Okay. So for cows, let's say you got a thousand-pound cow, that's one animal unit. If you've got a 1,500-pound cow, she's 1.5. And so if you set your stocking rate as animal unit instead of per head, it sort of automatically takes that into consideration. Okay. The next thing that you want to think about is your stocking rate may need to change based on drought, wildfire, hurricane. Down where you guys are, may impact your stocking rate. And so if I think this is really important, if you're going to enter into a long-term lease, you probably want to sort of have some sort of provision that lets you revisit that stocking rate periodically just to make sure that it's still feasible. Okay. So that's the first thing. The second thing on a grazing lease, you want to really spell out what may and may not be done on the property. What I always like to tell people is if you don't include limitations, then they don't exist. So one thing if you're doing a grazing lease, you may want to say that the lease gives them the right to graze livestock only, right? Because if, for example, what if they put their cows out there, and then they're out there riding four-wheelers around every weekend, or they're out there, you know, I don't know, doing something else that maybe you didn't intend. I think you really want to think about that from the perspective of what do you want to allow them to do, and really spell out any limitations you might have. You may also want to think about if there are any areas that are off-limits to the tenant, right? Maybe you'll let them use the pasture, but they're not allowed to use the corrals or something like that. Are there any things you want to make sure they do? Right? Maybe you want them to manage mesquite or to fertilize or stuff like that. If those are things you want done, you need to spell that out in the lease. Okay. And then I say, save yourself a tense situation in November. Um, here in the panhandle, the first weekend of November is opening weekend for deer, right? And I'm just telling you, it could happen where anybody who's ever set, put on your property decides they've got some theory as to why they ought to be the ones who have the hunting rights there. And so if you're going to lease your grant land for grazing, you want to make sure you address who has the hunting rights. Does that grazing lease include the hunting rights? If it does, can they sublease that to somebody else? Right? Do you want any say in that? Make sure you spell some of that out. If you're reserving the hunting rights, make sure that that's clear that you've reserved those, uh, rights. So I just think again, you want to make sure you just spell out all the details of what can and can't be done. The third thing that I'll mention on grazing leases is the maintenance of fixed assets. Who's going to maintain and repair things during the term of the lease? This comes up all the time with fences, gates, water pumps or windmills, barns, sometimes. If something goes wrong during the term and the least, who's going to be responsible for maintaining and repairing it? Doesn't matter how you set this up, it just matters that you address it, because I'll tell you, there's not case law out there on this. Um, a couple of years ago when we had those really bad fires come through the panhandle, we lost thousands of miles of fence up here, and there was a lot of phone calls I got on, listen, who's got to pay for that fence, the landlord or the tenant? And that really becomes an issue, right? If you've looked at the price of building a barbed wire fence, it's like at least up here, it's like 11 or 12,000 a mile. This could be a really big question, and there's no case law that says, you know, during a lease if a fence gets destroyed, who has to repair it? So the best thing you can do is agree amongst yourselves. Okay. And again, it can be all on one party or the other. What we do in our leases and what I think is fairly common up here is to do, um, the landowner pays for the materials, and the tenant either pays for or provides the labor. Again, there's no nothing magic to that, there's no rule that says you have to do that, it's just what we do. Um, from a liability standpoint, we'll talk more about liability in a minute. I think it's a good idea in a grazing lease for a landowner to think about requiring the tenant to make periodic inspection of fences and immediately repair if there's damage. That can just be useful in the event if there's a cow that gets out and there's some kind of lawsuit or something, it can be useful for the landowner to be able to point to this and say, look, the tenant knew that it was his responsibility to deal with those fences, here's where we had that in writing. So that can just be a useful thing. Okay. Any questions on grazing leases? Okay. Looks like we're good, uh, let's shift gear then and talk about hunting leases. Um, I know this is a big business a lot of places. My family, we sell deer hunts every year, not surprisingly, right? The first thing I'm going to tell you, I think the most important thing you can do is make sure that you've got all your ducks in a row with regard to having leases signed and waivers signed, right? Because I think most of us understand that probably the biggest threat when you've got a hunting lease is the potential of injury, right? And liability for personal injury. Um, here's what I'll tell you, I think it's a good idea to have everybody who's coming on the property sign a lease and a couple of waivers. So think about this with me. Let's say that I'm going to lease my land to Philip to come hunt on. A lot of times what happens is Philip will come by, he'll pay me, he'll sign my lease, right? And he'll sign my waiver, but then when he comes out to hunt, he brings six people with him who've never signed anything, right? And so the kicker there with the, you've got those people who haven't ever signed anything is they're not bound by the terms of the lease, and if they haven't signed a waiver, you can't argue that that waiver is a defense to you in a situation if they get injured. So I really recommend have everybody sign the lease and have everybody sign two waivers. We'll talk about what those are in just a second. Uh, Philip, did you have a comment there?

No, ma'am, I'm good. I, I hit the wrong button. We're good to go. Just check it.

Okay. Okay. So, um, like and sort of how you police this, like who's going to be out there. One thing you can consider is having a term in your hunting lease that says if anybody else is going to come out to the property besides the person who signs the lease, they need to be approved in writing by the landowner. And again, the reason for that is that just let you kind of know who's out there and make sure that you've got the paperwork done that you may want to have taken care of before they come. Okay. So I think that's worth looking at. As far as the waivers go, and we're going to talk a little bit more about waivers here, uh, when we get to the liability section, I, I'm professionally trained to be paranoid, okay? But I like to get two different waivers. One of them is just a standard waiver of liability. We'll talk more about that in a minute. The other one is the waiver language from the Texas Agritourism Act, and we'll drill down into both of those. But if it's me and I've got people coming to hunt, I like three documents: I like a hunting lease signed, I like a standard waiver of liability, and then I like the Agritourism Act waiver. Okay. Now that said, I understand that some people are not going to do this. My dad is one of them, right? We've got a neighbor who comes and hunts on us, he's never signed anything, he's never going to sign anything, right? So I realized that there's some, the decision-making you have to do there as far as who you feel comfortable with and what you might feel comfortable with. One thing I'll say to you, my suggestion is if somebody is paying you or if it's not somebody who you have like a personal relationship with, man, I would sure recommend that you, um, get that, uh, waiver from them. Okay. Next up, let's talk about some hunting-specific considerations. These are sort of terms that come in specifically when you're dealing with a hunting lease.

Hey Tiffany, yeah, sorry to interrupt. I think we lost your screen.

Okay, um, let's see, let's put that, let's, let's, let's, uh, let's see if I can get it back.

Okay, there he is. We're good to go.

Okay. Okay, uh, slightly, just some hunting-specific considerations. Can they use tree stands? Can they put out deer blinds? Can they put out feeders? All of those come up, uh, and think about the details on those, right? When can they have them out? Uh, are they allowed to come out and check them year-round on the tree stands? Can they screw them into the tree, or do they have to be freestanding? All things to just sort of consider when you're looking at that. Are there any limits on the types of weapons that people can use? So, you know, some people will allow, you know, archery hunters, but they don't want, uh, firearms. Maybe you don't want to have hunting dogs on the property, um, anything like that. If you want to limit that, make sure and do it. Um, can ATVs be used on the property? This is a big one, and again, there's no right or wrong, um, but I will tell you that as ATVs go, that's a major cause of injury when you look at insurance claims related to hunting leases. So just make sure and think about that. If you're going to allow them to be used, I'd sure make sure you had good insurance, uh, liability insurance in place. Another really important one if you're going to have livestock wherever the hunting is going on is to think about having a liquidated damage clause. Um, I saw this picture on Facebook last year, and it really cracked me up. It said, "Ranchers are getting ready for hunting season," uh, and you know, you'd be shocked to see how often livestock are injured by hunters who somehow mistake them for a deer. I don't know, but what you can do, and this is what we do in our leases, is we say, listen, if a cow gets killed, here's what the, the damages will be. We're not gonna bicker back and forth over what the cow was worth, right? Because the hunter's gonna think she was like sale barn trash for 800 bucks, you're probably going to think she was about to win Denver and she's worth 80,000, and we're not going to fight about that. We're just going to set an amount that says if this happens, here are the damages you will owe, and those are called liquidated damages. Okay. The funniest thing about that picture, I think, is it says cow, but that's a bull, so that makes it even better to me. Um, another thing that you can think about is requiring a security deposit. You know, just like if somebody rents an apartment, they have to pay a security deposit, same thing here, um, you could require a security deposit. As long as they don't tear anything up, as long as there's no trouble, they get that back. Again, I wouldn't do that if it's my neighbor, but I might do that if I had somebody who I didn't know that was coming to hunt, um, and then we're going to talk about these in a minute, but you want to make sure you look at those limited liability statutes again because hunting is just kind of a dangerous activity.

In general, those limited liability statutes, I think, are really important to protect a landowner if somebody gets injured. Okay.

And then the third thing on a hunting lease is you want to make sure you really describe that lease property and limitations. I know we talked about this a little bit with regard to grazing leases, but for hunting leases, one thing I really think is important is to have a map that really clearly shows where the person is allowed to hunt and any important things. So, for example, you can go on Google Earth, right, and print out a map and kind of highlight like, "Here's the area where you're allowed to hunt." Maybe you mark things like, "Here's the house," or, "Here's the barn," so we're not shooting at the house. Another thing that you can look at is marking any hidden dangerous activities. From a liability perspective, it's really important that you give people notice of any hidden dangerous conditions on the property. So if there's like an old abandoned well or something like that, you can mark that, and this is a really good way to give them notice of that danger. You may want to address where the property can be entered, and I think that's really important, particularly if you can't have multiple hunters out there at one time. If you need them all coming kind of in one direction, is anybody else going to have rights? There's no legal requirement to do this, but it's really a good idea if you've got like a grazing tenant and a hunting tenant to make sure they know about each other, right? What you don't want is some sort of like armed confrontation, and they're trying to run the other person off thinking that they're doing you a favor. Um, so just think about that, and we already talked about the security deposits as being an option. Okay. Any questions on hunting leases? Okay.

The last kind of topic area we'll look at are farm leases or row crop leases. Just a few key things here: If you're gonna do a crop share lease or a flex lease, you need to really be careful and spell out the terms of that carefully so that everybody's on the same page. So, for example, in a crop share lease, you need to be real clear what costs are going to be shared by the landowner, right? So I mean, in general, the way that works—and again, parties can agree to whatever they want—but generally, if it's a cost that increases yields, something like fertilizer, that's shared by the landowner. Um, there are other costs that you may want to talk about. I think generally irrigation costs are generally shared by the landowner. A lot of times, seed costs are not. Uh, harvest cost is one you can negotiate on, but you just want to make sure everybody's real clear on what they're paying a quarter of before you go and spend all this money and then find out we didn't understand that. Okay.

Um, another thing to look at is what say does the landowner have in any activities that may increase his or her cost, right? So, for example, let's say that somebody wants to fertilize three times. Does the landowner have any say over how much fertilizer they're putting or how many times they're going to do that because each time that increases the landowner's costs, right? Another important thing to think about here is what type of documentation is the landowner going to require from the tenant in order for payment to be remitted? So, for example, I was in the middle of a dispute not too long ago. I had people come into the office where they had a share lease. The tenant went down to the co-op and spent an astronomical amount on fertilizer and then sent them the bill, and what they figured out was that tenant had like four or five different lease places. He bought all the fertilizer at one time, and he didn't split that out between his different farms, right? So they were being asked to pay for a quarter of stuff that wasn't theirs. And so you may just think about like what kind of documentation needs to be uh provided.

Another topic that comes up all the time, and I'm telling you, like I learned about this in law school and thought, "Well, that can't really happen very often," I get calls at least twice a year on this: What happens to a growing crop in the field after the lease ends? So let's say we've got a lease that just goes from January 1 to December 31. Now, listen to me, these dates are going to seem off to you because you're way down south; that I'm way up north, but in the Panhandle, it could happen. If you had a really wet December, it could happen that you don't have your cotton out of the field by January 1st. So what happens? The best thing you can do is address that in the lease. Spell out in there what happens to any crop standing in the field when that lease terminates. If, if there's not some sort of agreement, if that's not addressed in the lease, what the tenant would have to rely on is this common law thing called the doctrine of implements. Basically, common law just means it's created like judge-made law from a case. Okay. And the doctrine of implements basically says if you can meet these three factors and you've got a crop still standing when a lease ends, you, the tenant, have the right to go in and harvest that crop. The three requirements are: There had to be an uncertain duration; the lease was for an uncertain amount of time; the termination was due to an act of God or the landlord—not the fault of the tenant—and the crop was planted during the right of occupancy. Where this could be a problem is that uncertain duration element, right? So in my example, we knew that lease was from January 1st, December 31st. That's not an uncertain duration, and so the doctrine of implements wouldn't really apply there to give that protection to the tenant. So if you're farming, this is something I really would encourage you to include in your lease, uh, from a tenant perspective, right? I hate that we have to do it because it should be that the landowner is just not a jerk, and they—this didn't come up—but unfortunately, there are cases and phone calls I get on this all the time. Okay.

Another thing to think about, and we sort of hit on this earlier, I'm going to go into more detail here, but is how any sort of government program payments are going to be divided. Um, in the row crop context, there are, there are multiple different payments you can look at, but I guess kind of the big ones are ARC or PLC. And so if you know, if you're enrolled in one of those programs, and those are under Title I of the Farm Bill, okay, and they're paid based on your base acres, all right, the way it works at FSA, the way those payments are made is if you've got a cash lease, the tenant is going to get all of the program payments. If you've got a share lease, then those program payments get shared proportionally, just like any other income, right? So like on the quarter, like we talked about earlier, if you've got a flex lease, it sort of depends on the details and exactly how that's structured. Okay. But so I want you to think about this from the cash lease perspective because we've run into this where we have leased property from our neighbor. Okay. So let's say we leased it for ten dollars an acre, and then we go in and sign up for ARC or PLC. We do PLC, and we got a payment that was twenty dollars an acre. Well, all of a sudden we just made money on that lease, which is great for a tenant, right? And there's nothing wrong with it; it's the legal thing to do; we're doing it all legally. But if I'm a landowner, I may want to know kind of, "Hey, like what payments are they getting?" And I may want to adjust my rent based on some of that, right? So, um, the FSA is going to pay this way no matter what; they're going to pay out based on who, how the lease is structured, but the parties could agree to modify it once that payment's made. So you can agree that we're going to split payments. Uh, we've got one landowner who says I get any sort of program payments, so it just depends; it's just something to be aware of. Um, and if you're a landowner, I really would encourage you, you need to know what programs your land has been enrolled in. You probably need to know what base acres you have, uh, just to see, right, if you're in a situation where you're getting like underpaid because of the payments that have been received on the property. Okay. Any questions on any of the lease stuff that we've covered so far? Okay.

Um, and I'm going to leave some time at the end, so if you guys do have questions that come up, we'll get them from—Let's talk about landowner liability here just for a little bit. And listen, we could spend a couple hours just on this topic, and like we can go to a lot more detail. Again, I'm going to sort of hit the high notes for you as far as leases go. The general rule during the term of a lease is that a landowner is not liable for injuries that occurred during that lease. Okay. And I think that that makes sense if we're being like technical from a legal standpoint. Okay. And the reason for that is this: When you lease land to somebody, technically that lease gives them sole and exclusive possession of the property, which means that technically, under the law, a landowner is not even allowed to enter that property during the lease term unless they have permission. And so I think it makes sense that if you're technically not even allowed to enter the property, you don't have possession of it; you shouldn't be liable for injuries during that lease. Okay. So that's the general rule. Now there's a couple of exceptions to that. The first one is if it's not really a lease that you have; it's a license, and that, that may sound funny to you. A lease grants sole and exclusive possession of the property; a license gives somebody the right to enter the property for a certain activity. So even though we all call it a hunting lease, truthfully a hunting lease is almost always a hunting license because we let them enter for a certain activity. I'm not sure that this idea of, you know, the landowner is not liable because there's a lease would apply in that situation because they don't have that sole and exclusive possession. Okay.

Another workplace a landowner can get in trouble if the landowner agrees to make repairs or do maintenance and then doesn't do that and it causes injury. A landowner can be liable during the lease term, or if the landowner makes shoddy repairs or maintenance that causes injury, the landowner can be liable. Okay. But just in general, by generally being a landowner who has leased their land, generally there's not going to be liability in that scenario for the landowner. Okay. But I want you to hear this loud from me, loud and clear: Okay, there's a difference between being liable and being sued. Okay. So just because I'm saying that a landowner is probably not going to be found liable during the term of a lease, that doesn't mean a landowner may not be the subject of a lawsuit. In fact, landowners frequently are named parties in a lawsuit when something happens on the property. Okay. So keep that in mind, and that leads us into our next point. I'm going to just talk through a couple of steps to liability protection. There are more, but again, I'm going to just sort of hit the high notes for you. The first one is liability insurance. Okay. If you are a landowner or if you are an agricultural tenant, you need liability insurance, period, no excuses. Okay. And the reason for that is twofold. Okay. The, the first is if something happens, we all know that our insurance policy will pay up to the policy limits, um, if there's a covered claim that's made. But the other thing that insurance does is it provides you a defense if there's a claim that gets made, which means, right, I've got liability insurance. If somebody gets injured out on the place that I'm leasing, my first phone call is to the insurance agent, and that insurance company is going to hire me a lawyer on their dime to get me dismissed out of the case, right? And so when I said earlier, just because you're not going to be liable doesn't mean you won't get sued. Having liability insurance can be really important to help get you out of those cases if you do face a lawsuit. Okay. Liability insurance is actually usually pretty affordable. If you look at the breakdown of your insurance bill every year, it's the property coverage that's expensive; the liability insurance is usually, I mean, really cheap. Uh, for example, we've got a place here in the Panhandle. We own half a section. We, I think we have five hundred thousand dollars of liability coverage; our insurance premium is like 100 bucks a year. In the scheme of things, right, that's nothing to have a 500,000 in coverage and essentially a lawyer on speed dial if something happens. Um, how much insurance you need really depends on what you're doing. Um, so usually sort of think about how risky is what you're doing, right? So if I've got a pumpkin patch and I've got a bunch of people coming out there to come cut pumpkins in the fall, I need a lot more liability insurance than if I just have a ranch in the middle of nowhere with some cows on it, right? Both need insurance, but the amount you need can differ. Okay. Another thing—does somebody have a question?—Okay. Another thing is you want to make sure that every activity you have going on is covered by your liability insurance. So, for example, we've got like a farm and ranch liability policy, uh, but if we're gonna start having paid hunters come out, I need to make sure that that's covered by my policy. If we're going to start, you know, open a roadside stand and sell our strawberries, I need to make sure that's covered by my policy. If it's not, I probably can just get an additional endorsement; I'll pay extra for that, right? But I get that endorsement that adds that coverage. Okay. The other thing I want to say on this is you want to watch for any caps on coverage that might be in the fine print. So where you'll see this—I've seen it on several policies here in Texas—is let's say you've got a million-dollar farm and ranch policy, but there might be a cap on damages for pesticide drift of 25,000. Okay. As you can imagine, right, there's a big difference between 25,000 and a million. Okay. So just watch for any caps like that, any limitations on coverage that may exist. The last thing on insurance that I want to talk to you about is an umbrella policy, and I, I do this only because at programs I'll talk about insurance, and then people will say, "Well, I don't have to worry because I have an umbrella policy, so everything is covered." I want to be clear on what umbrella policies do and don't do. Okay. There's nothing wrong with them; I think they're good; they can be a really good way to add some additional dollars of coverage. Okay. And that's what an umbrella policy does; it adds dollars of coverage for your policy. So what an umbrella can do is you could buy a 500,000 liability policy and then get a two-million-dollar umbrella just to increase that coverage. Okay. What it does not do is expand the scope of coverage beyond that base policy. Okay. So whatever liability policy you have tells you what is covered, what is not, what's in, what's out. The umbrella does not change that. All the umbrella changes is the dollar amount of coverage you have, not the breadth of coverage. Okay. So really, I wish that we called it a top hat policy because it's more like a top hat, right? It sits on top of your policy and ups the dollar value; it doesn't cover everything like an umbrella. Okay. Any questions on insurance? Okay. Everybody seems good. Let's talk about written liability waivers. We mentioned this earlier in the hunting section, but I do think it's a good idea if you've got people coming out for recreational uses to have a just a general liability waiver or liability release for them to sign. Okay. Now some people will say, "Well, those aren't even worth the paper that they're written on." Well, in Texas, if it's properly drafted and the injured party is an adult, courts will enforce waivers. Now I'm not going to tell you always, right, because if they're not done, everything's not done just right, they may not be enforceable, but in general, Texas does enforce them. Okay.

Now one thing it says here is that they're enforceable if they're properly drafted and the injured party is an adult. Okay. There's some question in Texas law as to whether it's enforceable if you have a parent sign a liability waiver on behalf of a minor child. Uh, the Texas Supreme Court has never ruled on it, but there's some lower court cases that basically say we're not going to enforce those waivers if a parent signs for a minor because we don't want to leave a kid with no remedy if they get injured. I don't know, right, until the Supreme Court tells us, I don't know what the rule really is. So I'll tell you what I do: I still have the parent sign the liability waiver on behalf of the kid. I want to have that as an option for a defense; I just know that it may or may not be applicable. Okay. Like I said, liability waivers commonly used in recreational situations. Like I don't hand out liability waivers when people come over for dinner, right? But if we've got hunters or we've got somebody coming to fish or hike or anything like that, ride four-wheelers, that's where you kind of see waivers come into play. Um, the other thing I'll say, waivers are really complicated, and I think that this is a place where it's worth using an attorney to get one drafted. The reason for that is that courts are just really particular about waivers, and if everything's not done exactly right, uh, they want to enforce them. Okay. So what I recommend is go to an attorney who does this kind of stuff; they should have kind of a standard form that they just tweak to put your information in, so it shouldn't be super expensive, right, because it shouldn't take that much time, and also you ought to be able to probably just get it once, uh, and then keep using it, you know, for years to come. You don't have to go get a new waiver from your lawyer every year. Okay.

Um, the requirements of a waiver: It has to be expressed; that means it actually has to say that you're releasing claims of negligence. Okay. You can't just say, "I won't sue the landowner." It has to say you're releasing claims of negligence, and it needs to be signed near the time of the injury. There's never been any case law on that to tell us what that means. Um, I'll just tell you what I do: I get it, uh, once a year. So if we've got the same deer hunters coming year after year, I get a new waiver every year from them. Okay. The other thing is it has to be conspicuous; that means do not hide it in the fine print. Okay. This cannot be on page five of your hunting lease; it probably needs to be a separate sheet of paper. You probably need to have it in like big, bold letters, right, that says, "Waiver of Liability" or "Release of Liability." You don't want to, um, you don't want to have an argument that they didn't know what they were signing. Okay. And you'll sometimes see that come up. Okay. Questions on liability waivers? Hey, Tiffany, yeah, uh, okay. And you may have hit this; I just want to make sure, you know, I do a double lease every year. I've got folks that come out and, and, um, you know, I've got, you know, in, in hunt on our land, we've got a dove lease, we've got liability and everything else. I probably just double-check because we also have like a two, three-acre pond on the place, too, and it's not uncommon—this one, in particular individual, we know him well—he'll lease the whole place, and, uh, you know, while they're, they're hunting, you know, you know, his wife may be down with, with their kiddos, you know, fishing in, in the pond or something like that. You know, I guess I need to pay special attention to that as well, right? I mean, something like that needs to be written in to it, into that, into that lease, or I just need to make sure I'm covered, make sure that my liabilities got additional things covered. Am I, am I on the right track? Yeah, and probably both, Phillip. So you certainly want to make sure that that's covered by your liability insurance, uh, in all likelihood it probably is, but

I will just double-check this. I think we've got somebody who's not muted, so yeah, I'm gonna, I'm, I'm gonna, I'm gonna see if I—okay, I think we're good. Keep going. Perfect. Okay, so I would check that, make sure your liability insurance covers it, something like that. It probably does, just because that's not something too far afield from anything else, right? Um, but I double-check it. The other thing is you may want to address it in your lease if you've got one, right? If you want to allow them to use the pond, fine. If you don't, find you may want to spell that out, or if there's any, you know, warnings that you need to give, or any limitations or anything like that, you would want to put that in the lease.

Got it. Good deal. Okay, perfect. Any other questions on waivers? Okay, the last thing that we're going to hit on is there are three limited liability statutes here in Texas. Um, these are really great; they essentially, the legislature has given limited liability to rural landowners, uh, in the event that they've got people that come on their property. Um, it just changes kind of the law of liability in your favor, so you want to make sure and take a look at these, and again, we're going to just hit them quickly. Um, the Texas recreational use statute is great; uh, it applies to landowners, lessees, or occupiers of land, so even if you're leasing land, this is a potential defense for you if somebody gets injured. And what it basically says is if you're a landowner, lessee, or occupier of land, you are liable only for intentional acts or gross negligence. If you can meet these statutory requirements, so essentially, if somebody gets hurt and they want to sue you for negligence, they can't, because this is a defense that says you're not liable for regular negligence. Okay, you're only liable for intentional acts or gross negligence, and those are really hard to prove. Like, it's tough for a, a plaintiff, an injured person, to prove you acted intentionally or with gross negligence, so this is a really good, uh, protection for landowners.

To qualify, here's what you have to prove: The first thing is you've got to have land; agricultural land gets a few more protections than non-ag land, um, and since we're talking about ag land today, I'm going to focus on that. Okay, agricultural land is defined as land that is suitable for growing crops, raising livestock, or forestry. It says suitable for; it doesn't say you have to be doing it, okay, and it doesn't—I don't care what the appraisal district says—so, uh, suitable for growing crops or raising livestock, so that's pretty broad. The plaintiff, right, the person who was injured, had to be there for a recreational purpose, and there's a big list of what that means. Hunting is the first one on the list, okay: hunting, fishing, hiking, biking, uh, ATVs, nature photography, and then it says, "and anything else, uh, related to enjoying nature and the outdoors," so again, super broad definition there. So if you've got somebody out there for recreational uses on agricultural land, the only other thing that you have to have is you've got to meet one of these three monetary options. Okay, so I'm going to give you three options here; you need to meet one of them. The first option is if you don't charge a fee. So Philip, if you're letting your neighbor come over and hunt dove for free, the statute applies; you are only liable for intentional acts or gross negligence.

God, however, some of us want to charge money for those hunting leases, right? Absolutely. The second option says, uh, you're covered by the statute if the fees you made from recreational user users in the last calendar year is not less than 20 times the ad valorem taxes you paid. So in other words, what you're going to do is you add up all the money you made from recreational users last year, get a total; then you're going to add up all the property taxes you paid anywhere in Texas, not just on the ranch where you have the hunting lease, but any property taxes, get a total. As long as the income is not 20 times more than the taxes, the statute applies, and you're only liable for intentional acts or gross negligence. Okay, and almost everybody falls there; you'd have to make a lot of money, um, from leases for that not to work. Okay, or here's your third option: If you have liability insurance of at least $500,000 per person, a million per occurrence, and a hundred thousand for property damage, if you carry that level of insurance or higher, the statute automatically applies; we don't care how much you charge. So remember earlier I said that I can't really tell you how much insurance you need; what I can tell you is if you're going to have recreational users, I would at least have this much because of the provisions of this statute.

Okay, any questions on the recreational use statute? That's the whole thing; you don't have to hang up any signs; nobody has to sign any paperwork; it just automatically applies. Okay, next let's look at the Texas Agritourism Act. This is going to kind of overlap some with the recreational use statute, but it's just a separate defense, so just a separate option for how you can convince a court to dismiss a case, right? Um, this one basically says that if you are providing an agritourism activity, which is defined as an activity on ag land for a recreational or educational purpose, you are not liable for injury if you either hang up a sign or get her to release. Okay, so what that means is, right, if you're gonna have somebody out on your agricultural land, which again, that's land that's suitable for growing crops or raising livestock, right? If you're going to have somebody out there on your land for a recreational or educational purpose, right, so like a field day maybe, or again, hunting, fishing, hiking, all of that, you need to hang up the sign or get a release under the agritourism act. Okay, the sign—you can get the statute from the—um, you can get the language from the statute; a bunch of groups sell these signs: the Texas and Southwestern Cattle Raisers, Sheep and Goat Raisers, Texas Farm Bureau, Texas Wildlife Association; they all have them. You can buy that sign, hang it up, and the statute says there's some exceptions that come into play, but in general, you're not liable if somebody gets injured during a recreational or educational activity. So you can either hang up the sign or you can have them sign the agritourism act release. Okay, and again, that release, you need to have them sign it; it's in the statute, okay, um, and you have them sign it before the activity. Okay, it also has to be printed in at least 10-point bold font; I don't know why that's the rule, but that's what it is. Um, so you can choose either the sign or the waiver.

Okay, the last statute is the Texas Farm Animal Liability Act. This one comes into play if you've got livestock on your property, and it basically says that a person is not liable for damages or injuries to a participant in a farm animal activity if the injury results from risks inherent to that activity. So essentially, right, this says, "Listen, when you are involved in farm animal activities, there are some just inherent risks of danger." So when you crawl on a horse, it doesn't matter, even if you're Trevor Brazile getting on a kid horse, there is an inherent risk that something crazy could happen and you could get bucked off. Okay, in that scenario, this statute is there to protect the animal owner and say you're not liable for these inherent risks. Okay, there are some real moving pieces happening with this statute, and I'll spare you all of the detail; I could nerd out on you for a little bit, but know that the legislature passed, and Governor Abbott just signed House Bill 365, which actually kind of strengthens and expands the farm animal liability act. So effective September 1st, this will apply to all working ranches as well; it also applies if you have an injured employee or independent contractor. So if you've got an employee out or a day-work cowboy out helping brand cows and somebody gets hurt, this is a potential defense for you now under that new statute, that the, the amendments there that take place on September 1st. You're going to need to hang up a sign if you're a rancher or a farmer that want this protection, so I'm going to have a blog post out with more details on that in the next couple of weeks, but just be aware that this exists; it's been modified a little bit, and there's a sign that you're going to need to hang up to get that protection.

Okay, lastly, on additional resources, these are just some good resources that exist for leases, for farm leases in particular, row crop leases. Check out the Ag Lease 101 website; um, they've got great information on here; there's some sample leases; there's checklists; there's all kinds of good info on that website if you're interested in this topic. Leases, and you basically want a three-hour version of this presentation, uh, we've got what's called our online ranchers ag leasing workshop; uh, this is available; it's online on demand, so all you have to do, you can go register for it, you pay your money, and then you can watch it on your computer at your own pace. It's a video of me and Dr. Kazi from the Ag Econ department; like, it's about three hours long, focused on grazing and hunting leases, so if you're interested in that, that's an option. You can go to agrolifelearn.tamu.edu, or you can contact me or Philip; we'll get you the info. I've also got this handbook; I mentioned this earlier, and I'm going to put a link in the email Philip's going to send; it's called the Ranchers Agricultural Leasing Handbook. It's just a handbook for—there's all kinds of information in there, checklists, sample language, chapters on setting lease rates, etc. If you want a free copy, you can just download that from my blog, or I'll put a link in the email. If you'd like to get a hard copy, we have to charge for those just because, um, you know, printing and shipping costs; you can call my assistant or email her, and she'll be glad to get that hard copy on headed your way. Another thing that I've got, it's called the Owning Your Piece of Texas Handbook; I wrote this a couple of years ago; it's essentially like a 15-chapter handbook that just gives you an overview of all the laws I think are pertinent to Texas landowners. So you know, fence law, water law, oil and gas, eminent domain, special use, property tax valuation, uh, land under liability, leases—all that's in here. So again, if you want a free copy, I'll put a link in the email that I send Philip; you can just download that PDF, or if you want a hard copy, you can contact my assistant; she can get you taken care of there.

Um, okay, this is the blog that I mentioned; it's called the Texas Agriculture Law Blog. Every week I post new information about ag law; that's also where you can go to get any of my handbooks that I've done, so feel free to check that out; I think it's really useful; we get a lot of really good feedback on that resource. Um, the last thing I've got is called the Ag Law in the Field podcast. If you're a podcast listener, look us up anywhere you listen to your podcast; we've got 105 episodes of me interviewing ag lawyers on different topics, so we have covered the gamut of, of topics, so they're free to listen to. Um, check those out. If you're not a podcast listener, it's really easy to do; if you want to listen, all you have to do is go to that address there at the top, and again, I'll put a link in the email; it's just aglaw.libsyn.com. If you just go to that website, what you're gonna find is the list of all 105 topics; if you want to listen, it's just an audio interview of me talking to somebody else that does this for a living; just pick the topic you want, push play, and you can [Music] Okay, so with that, I'm going to put up my contact information. Um, if you guys have questions after today, if you need information, let me know. I'm also on Twitter and Facebook, so if you want to follow me there, that's great. Um, and with that, Philip, I think we've got about 10 minutes left if anybody has any questions.

Okay, uh, and I tell you what, folks, talk about about the value—you probably won't find a better value than you did today with, with this presentation—and I can tell you that blog is, is an amazing thing; I've, I've listened to it as well, or read it as well, uh, and I've seen her website, and folks, if you want prime, good, up-to-date information, I'm telling you from personal experience, it is well worth your time to look that information up. I mean, there's, there's information there that honestly, it could, could cost you elsewhere, but we've got it here for you for, for obviously the best price in the world, so, um, by all means, look that up. And before we, before we call today, the other, um, thing—the best value is, is if you have a question now is the time to ask it. You know, being a former high school educator, I can tell you that the only question, uh, the only bad question is one that's not asked, because usually if you don't, if you're afraid to ask it, or if you don't ask, the chances are there's someone else who wants to know too. So if you have questions, now is the time to ask about anything whatsoever. Is there anyone out there that's got anything that they want to, uh, want to share or ask?

Uh, Miss/Schmidt, I guess you did a heck of a great job. Uh, I guess better—I terrified everyone. No, I, I tell you what, you know what? There's, there's, there's something healthy about even that as well, is it is—um, it is—I can tell you from personal experience being a landowner that every time that we have—um, when, when dove season rolls around, that's probably the most popular type of, of wildlife lease that we have here in Fort Bend County. You won't find a lot of deer or quality deer and necessarily in Fort Bend. There is, there is some locations, but I can tell you that every time those folks are on my property and with the lease and everything out there, is still that, that point where you look behind your shoulder and you just pray and under your wrist, "Lord, please nothing happen." Um, I think that's just, uh, that's just some—that's mental that every landowner that has folks that come out wears upon their shoulder, and so if that is you, I can tell you that it is, it would behoove you, uh, from, from a landowner's personal experience to make sure that you, you take care of that information.

Tiffany, I have a question, um, that, that I, I, I guess it kind of go—it rolls around along with, with liability, and I've had this happen to me, um, I'll tell you, and thank the good Lord that, that nothing ever culminated great, but you know, we, with Fort Bend County growing the way it is, um, you know, it's about half urban, um, quarter suburban, if not more, and then about half still a lot of farmland in ranch land there. We have a lot of county road, state roads that, that run through pasture lands that, that obviously is fenced, but when an animal gets out on the road and obviously gets, gets hit by a car, you know, that, that sends a landowner into cardiac arrest pretty quick. Yeah, um, what, what's—what, what's the normal if, and if, and when, heaven forbid, it happens, but what do—what would be the process there if someone, if someone hits a cow that got out, that of yours that got off your property and onto the road?

Okay, well, so as far as like nuts and bolts procedure goes, you hopefully you've got liability insurance, right, that covers life, and that's important, right? You want to make sure that you've got that coverage on there if you've got livestock. Um, you call your insurance agent; they step in and work on getting you dismissed out of the case. From the legal standpoint of how the law applies, that gets a little bit trickier. Um, the way the law works in Texas is in the sort of starting places that Texas is an open-range state, which means that livestock owners generally don't have any duty to fence their livestock in, and they're not liable if they get out because there's no duty to fence. However, that said, okay, there are a couple of exceptions that actually kind of swallow the rule to make most of the state closed range. So one of those is if you've got animals that get hit on a state or U.S. highway. Okay, so that's going to be like I-35 or like Highway 6, okay, not a farm-to-market road, but a state or U.S. highway; that is closed range, and what that means is you as an animal owner have an obligation to fence those animals in and to prevent them from—knowingly—let me think of how that's worded—they cannot—you cannot knowingly permit them to run at large. Okay, so if that's the situation, the question is going to be there to look—it's real fact-specific: Did you know that you had bad fences? Did you know that your water gap was out? Did you leave the gate open? How many times your cow's been out before? All that gets looked at to decide if you're liable or not. The other thing you need to be aware of is counties can have local stock laws that they pass to make them closed range instead of open range, okay, and so if your county has one of those, then that can make all or part of the county closed range, and in that scenario, the question would be, did you permit the livestock to run at large, and if you did, you can be liable. So what I would encourage everybody—two things I would do—well, I guess three things: Number one, well, I guess three things: Number one, I would have liability insurance to cover livestock on the roadway; number two, I would know is my county open range or closed range; I would find that out because that matters; and number three, I would have real good fences that I keep in good repair.

Got it. Got it. All right, like I said, I, I've—and Gary, I see your hand up—and where we're gonna—I'll make this comment and I'm—and then uh, Gary has a question. Tiffany, I have, I have been through that, and, and again, I just thank the good Lord that nothing ever culminated from it, and, and I'll tell you what, there's nothing more, more scarier than getting the call says, "Hey, you got a cow on the road and it's been hit." It's scary enough to have a cow on the road, but it's, it's a totally different world whenever that, that animal's been hit, uh, by someone. So folks, I, I guess speaking from experience again, uh, and living in Fort Bend County my whole life, folks, check that stuff out; make sure you've got the liability insurance; check with Fort Bend—is—I don't know—I'm going to check as soon as we get off if Fort Bend has a statute or, or what have you, if it's open or closed range, and just again, I don't know—a lot of people don't know—and so that's, it's really good to do that research. And Philip, if you'll send me what you get, I'm working on trying to compile all those for every county and like put them on a website somewhere; I just—that takes a lot of time to get done.

Sure, sure, I will definitely do that. And, and folks, if y'all find out before me, by all means, please give me a shout, drop me a line, uh, and I'll get that to Miss Last Minute immediately as well. Thank you, Tiffany. Gary, if you have a question, by all means, uh, ask away, sir.

All right, thank you. Uh, that was a very enlightening question, uh, question you had there's—wow—something I did not know, but I have an, uh, another question for Miss Tiffany. Uh, so I have rice land property in Colorado County on the Garwood Prairie; occasionally we'll—it's, it's leased out, uh, occasionally the leaser will ask, uh, about helicopter flyovers; they want to do—our feral hog hunting—here we go—but they'll want to use a chopper to fly over various times of the year. How does one go about—I've allowed it, but I didn't have signed any waivers or any of that kind of, uh, informational, uh, protection from my part? Yeah, second part of that question is, you know, going further, you'll go online or you'll find someone in the area that likes to trap them. I won't allow hunting, uh, per se with a, uh, with dogs or a, uh, rifle, due to the fact of, uh, cattle and, uh, equine out there, but, uh, as far as setting up a trap, I will allow that to trap them and haul—

Them off. Sure, yeah. So Gary, I mean, I think it's a good question. The, the first thing I would say is, I guess I should ask you: are they paying to do this, or are you letting it? They, they are paying customers to the helicopter pilot. He'll gather up numerous landowners to fly over their uh, rice crops. Got it. What about your trappers? Are they paying? Are they doing that for free?

They're doing it for free. Okay, so let's start with the trapper. I think that's the easier question. I'm not too worried about the trapper because, number one, if you've got liability insurance, I might make sure that that's covered. It probably will be, but you know, double check that. But you've got insurance. The other thing is, you've got the protection from that recreational use statute.

Ah, oh, okay. Right. And so you're only liable for intentional acts or gross negligence. And I think that's a, you know, it's a hard sell that the trapper could prove that, especially when you're not even there. Okay, so I'm not gonna lose too much sleep over the trapper. The helicopter thing, on the one hand, I'm not that worried for a landowner because they're in a helicopter; they're not really even on the land. So I think that that can give you some ease. But on the other hand, helicopters are dangerous, so that makes me feel a little bit sweaty.

Right. So I guess if I were you, probably what I would do, I would touch base with my insurance company again and just tell them, look, we, I've got this lease, this is going on; I want to make sure that this would be something covered. The other thing I would probably do, Gary, is I would have the helicopter company—I would make sure that they carry liability insurance. You might add, and I'm sure they do as a helicopter company, you might ask if they could add you as an additional insured to that policy. That would just give you additional insurance coverage under their policy. And the other thing you could ask is, listen, are you, helicopter company, getting waivers? I would be shocked if they're not. If they are, you might just see if you could be added as a party that's being released by that waiver.

Uh-huh. So do a little bit more homework into instead of just out of your head. Okay. Yeah, yeah. Eradicate the pigs because, you know, the situation with all the wild hogs right now—oh, it's terrible. I, I totally get it. And again, right, the recreational use statute would come into play also on the helicopter thing, I think, depending on how much they're being charged, but I think you've got protections there. I certainly don't think it's something that's so dangerous that there's, there's no way to do it. I might just do a couple of little tweaks here and there to make sure I've got some extra protection and feel pretty good.

Awesome. Yeah, I will. That's good, good advice. I, I think that—oh, I'm sorry, Gary, go ahead. I didn't mean to—you know, that was it. That she, she'd point me in the right direction. She nailed it on the head. Yes, you did. Yeah, absolutely. Uh, and you know, Gary, I know where it's at: 12 o'clock noon, straight up, or a one pass. So, uh, but I'll, I'll make comment on that. That, that is probably even more so, if not now, it's going to increasingly be more in people's minds about that because, um, uh, even some, you know, the landowners, some of the farmers in Fort Bend County, I know they've contacted me, Phil. I've got hogs everywhere, you know, and it's just constantly—it's kind of like a mosquito; you swap one, and another one replaces it. So where the end result is, I don't know. But um, again, that liability, no matter—I would think, Tiffany, that no matter who, once someone wants to come on your place and and hunt hogs, that's great, but you know, there's different ways of hunting hogs, and um, that liability could become an issue. I would just urge everyone: protect yourself. Please take time out and check those policies out. Please. Again, speaking from experience, I've never been sued, never been named in a suit, but I don't want to be, and I hope I'm not jinxing myself either.

[Laughter] Well, anyway, uh, folks, it's 12:02. Uh, Miss Flashmint, thank you so much again. It's an honor; it's a pleasure to always have you on board, uh, to enlighten us and tell us, you know, what we need to be doing. And sometimes, sometimes it's the answer we don't want to hear, but the answer that we need to hear. And so we think—we thank you again so much, uh, for your time.

For sure. Thank you guys. If you've got questions later or need to contact me, feel free to do that. Great. And folks, uh, don't, don't forget here at AgriLife, uh, you know where we are about surveys. Uh, if you know me, I try not to make those surveys very long at all. I try to keep them sweet and simple, but yet to the point, so that we can find out better about what the needs you have, so that we can, we can answer those needs, uh, in programs just such as this. So, uh, look, in, in the next day or two—I don't have it ready, uh, exactly yet, because I don't have your email digital yet; my administrative assistant is out today—but I will be sending you a, a, a survey, and also on a survey for the program we're gonna do at one o'clock today. So be back, uh, for that at one o'clock. Um, it's Joe Walter with the Showalter uh, law firm here in Fort Mckenna will be with us on eminent domain. That'll be another great one as well. Again, thanks to everyone. Have a great day. God bless you. Take care.

Tiffany, thanks again, and you be safe up there in Amarillo. Thanks, Phillip. I appreciate it. You betcha. See you soon, folks. See you at one o'clock. Bye-bye for now.

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