Am I bound by current owner's land usage contract?

[daddison]

What is the name of your state? OH

My wife and I are in negotiations to buy a 30-acre homestead in rural central Ohio. The current owners have a contract with a farmer to farm 15 of the acres in 2005 and are none too interested in removing this agreement as they have already been paid. The contract is between Mr. and Mrs. X and Farmer Y, with no stipulation as to property location or address. If we buy this home, are we obligated to honor the current owner's land usage contract with the farmer?

[BelizeBreeze]

Yes you are, however, you are also entitled to that $15,000 pro-rated as if the farmer were a tenant.

I sure hope you have a real estate agent helping you on this.

Originally Posted by daddison

What is the name of your state? OH

My wife and I are in negotiations to buy a 30-acre homestead in rural central Ohio. The current owners have a contract with a farmer to farm 15 of the acres in 2005 and are none too interested in removing this agreement as they have already been paid. The contract is between Mr. and Mrs. X and Farmer Y, with no stipulation as to property location or address. If we buy this home, are we obligated to honor the current owner's land usage contract with the farmer?

BB is right, but let me add this: You need to get a real estate attorney to look at this. You may be buying a piece of land on it with a lien that will last for years. It may be okay, but you just need to check it out carefully.

Also, make sure you get title insurance.

[daddison]

Thank you very much for your replies.

As a bit more background in case you are interested, the land (15 acres) is currently enrolled in CAUV, which is Ohio's program for preserving farm land. In order to qualify, the land must produce agricultural products. In exchange, land owners receive a tax break. The contract the current owners have with the farmer is their way of complying with CAUV guidelines. Since we want to use this land for our family's enjoyment, we plan to pull it out of CAUV and pay the penalties, which in this case amount to about $2500.

We do have a real estate agent, but he unfortunately is not much of an advocate for our concerns. He wants to make his money and move on.

We plan to buy title insurance, and we may end up consulting an attorney before all is said and done.

Thanks again for your input!

[HomeGuru]

Originally Posted by daddison

Thank you very much for your replies.

As a bit more background in case you are interested, the land (15 acres) is currently enrolled in CAUV, which is Ohio's program for preserving farm land. In order to qualify, the land must produce agricultural products. In exchange, land owners receive a tax break. The contract the current owners have with the farmer is their way of complying with CAUV guidelines. Since we want to use this land for our family's enjoyment, we plan to pull it out of CAUV and pay the penalties, which in this case amount to about $2500.

We do have a real estate agent, but he unfortunately is not much of an advocate for our concerns. He wants to make his money and move on.

We plan to buy title insurance, and we may end up consulting an attorney before all is said and done.

Thanks again for your input!

**A: you may also have to pay penalties to the tenant farmer if he is not on a fixed lease.

[daddison]

Originally Posted by HomeGuru

**A: you may also have to pay penalties to the tenant farmer if he is not on a fixed lease.

One-year lease, and seller is looking into buying out the farmer. We will only pull out of CAUV once obligations to farmer are met, one way or another.

Thanks.

[BelizeBreeze]

Originally Posted by daddison

One-year lease, and seller is looking into buying out the farmer. We will only pull out of CAUV once obligations to farmer are met, one way or another.

Thanks.

Well now, That's a plan.
But make sure this happens in the period of time allowed to de-register from the program. Most state programs such as this give the landowner a very specific time during the year when you can disenroll from the program

[HomeGuru]

Originally Posted by daddison

One-year lease, and seller is looking into buying out the farmer. We will only pull out of CAUV once obligations to farmer are met, one way or another.

Thanks.

**A: good work, you are doing things right.