Grazing Lease Agreements in Texas

A grazing lease agreement is a written contract between the owner of land and a renter who wants to use that land for cattle grazing.

Like other contracts in the state of Texas, the terms must be clearly spelled out in the document for it to be enforceable, including the parties, the property, the conditions of use, and the amount and terms of the rent. Texas law specifies what information is required for the contract to be valid in the state.

Anyone who has farm animals or who has worked on a ranch knows the importance of good quality pasture for cattle, sheep and other grazing animals. They not only need grass, but they need prime quality grass in order to stay healthy.

Many ranchers, including most of those just starting out, need more grazing land than they currently own. Even those with ample land will need additional land if they want to increase their livestock numbers.

To accomplish this, they need to buy more land or to rent it. Renting pasture is the preferred option when money is tight since the lessee can run livestock on the leased land without incurring the long-term debt associated with purchasing property.

In the "good old days," grazing lease agreements in Texas were a matter of a handshake, many ranchers recall. This is no longer the case. Today, all of the important terms of a grazing lease agreement, also called a pasture lease agreement, should be in writing.

This ensures that the parties are on the same page as to the terms of the agreement; it also means that either party can take the contract to court to enforce it, if necessary.

Like every other valid contract, a grazing lease agreement must contain certain basic terms to make the document valid and binding. Three critical elements are:

• Names of the parties.
• Description of the land.
• Duration of the lease.

To be more specific, the pasture lease agreement should include the names and addresses of both parties. Generally, this includes two parties, the landowner and the lessee. But if there are two owners, or multiple lessees, all names should be included.

The description of the land is also essential. It should be described with sufficient detail that both parties, as well as a judge who may need to resolve a dispute, can understand exactly what land is involved in the lease.

While this can be done by legal metes-and-bounds descriptions, that is not mandatory in Texas. Any type of description, photograph or diagram that shows the specific location is sufficient. The description should also include any areas of the pasture that are excluded from the lease which are not to be used for grazing.

The duration of the lease means how long the lease term lasts. A grazing lease agreement must show the day it comes into effect and when it expires. That may be a few weeks, months or years.

In Texas, any contract for the use of land for more than a year must be in writing to be valid. Some grazing leases are on a month-to-month basis, automatically renewing the contract with the next month's payment of rent. Some are for set terms.

Another element of a grazing contract is termed the "stocking limitations." This is nothing more than a description of the number of head, breed and species of animal that the lessee intends to graze on the land.

The number of animals allowed per acre in accordance with the Texas Agricultural Extension Service must be specified. This is a matter of importance since the more cattle or sheep, the more the pasture will be grazed down. The stocking rate may be smaller, for example, for enormous Angus cattle than for smaller breeds.

Stocking limitations also should specify whether other animals are permitted on the land, like horses or sheep. This limit will be a legal restriction on what and how many animals are permitted.

Another obvious element of a lease contract for grazing land is the price that the lessee must pay. Prices in Texas for grazing leases can be based upon a number of factors, including the size of the parcel, the stocking limits and available forage.

There is no state-mandated formula in Texas, and the parties are free to use any formula they agree on. That said, most grazing leases are priced either per acre, per head or per animal unit.

How are the lease payments to be made? This depends entirely on the parties, and any agreement they make will be binding. The property owner will likely want to include in the agreement details about how and when rent is paid, including penalties and interest for late payments.

Likewise, the owner of the land may wish to retain the right to terminate the lease for failure to pay rent or when the arrears reach a certain amount. They can also specify that the breaching party will be responsible for attorney’s fees.

Other financial matters can be included in the lease, such as which party is responsible to pay insurance, utilities and taxes, as well as any indemnification and warranties made.

Generally, a Texas grazing lease agreement makes clear that the occupation of the land is at the lessee's risk, and the owner will not assume responsibility for what happens on the land while it is under lease.

To that end, the terms of the lease agreement can indemnify and release the owner from any risk associated with the activities of the lessee, including property damage from the livestock operations. Generally the owner, not the lessee, is responsible for paying taxes on the land.

A grazing lease, once signed by both parties, is binding on both. Neither can make unilateral changes to the terms of the agreement, but it is possible to amend the lease. This must be done in writing and, like the original agreement, signed by both the owner and the lessee. The lease can be amended only in writing and signed by both the lessor and lessee.