Tenant Ownership Rights to Crops and Improvements on Leased

Tenant Ownership Rights to Crops and Improvements on Leased

Tenant Ownership Rights to Crops and
Improvements on Leased Property
by: Richard D. Boyle
Fairly often our agricultural clients ask us (1) what are my ownership rights as a tenant with
respect to certain types of crops planted on leased property; and (2) what are my ownership rights as a
tenant with respect to certain improvements that I have made to the leased property?
The ownership rights of crops in a field are determined based on the lease term (i.e. definite or
indefinite) and the type of crop (i.e. annual or perennial). Annual crops are generally considered personal
property while perennial crops are considered real property. The following is a breakdown of these
ownership rights:
Annual Crops with Indefinite Lease Term
The common law doctrine of emblements protects a tenant's right to harvest his annual crops (i.e.
corn, beans, cabbage, etc.) provided the lease term is for an indefinite period of time. The doctrine of
emblements was recognized by the New York Court of Appeals in 1877 in Reeder v. Sayre 70 N.Y. 180
(N.Y. 1877). Therefore, if the tenant plants an annual crop and then the lease of indefinite duration is
terminated not by reason of the tenant's doing, then the tenant has the ability to harvest the crop he planted
even after the lease is terminated.1
Annual Crops with Definite Lease Term
The tenant's right to his crops does not apply to annual crops planted on leased property with a
definite lease term.2 It therefore may be assumed that if a tenant plants an annual crop on lands of which
he knows he cannot harvest before the end of the lease term, which is specified in the lease, then the crop
becomes the landlord's at the end of the lease term.3
Perennial Crops with Definite Lease Term
Perennial crops are considered to be real property and are therefore owned by the landlord upon
termination of the lease. In 1990, the Appellate Division, 3rd Department considered whether a tenant had
the right to harvest a crop of alfalfa which had been planted prior to termination of the lease and reasoned
that because alfalfa had a life span of at least five (5) years which caused it to have perennial roots that it
was more correctly classified as fructus naturales rather than as an annual crop.4 Additionally, the Court
reasoned that the alfalfa must be regarded as realty while it was unsevered from the soil and its ownership
followed the ownership of the land.5 Further, the Court noted that the lease was for a specified term so
the doctrine of emblements was not applicable.
1
see Jacob H. Rottkamp & Son, Inc. v. Wulforst Farms, LLC, 844 N.Y.S.2d 600 (Suffolk County 2007).
Id.
3
Id. at 604
4
Triggs v. Kahn, 563 N.Y.S.2d 262, 264 (3rd Dept. 1990).
5
Id.
2
Scolaro, Fetter, Grizanti, McGough & King, P.C.
Even though perennial crops become the landlords at the end of the specified lease term, you may
be able to argue on estoppel grounds that the tenant may enter the premises to obtain his crop where the
lease was terminated prior to that years' harvest.6
There are no New York State cases involving other types of perennials, however, it may be
assumed that other crops such as sod, hops, grape vines, apple trees, Christmas trees, etc. are classified as
perennials just like alfalfa.
Perennial Crops with Indefinite Lease Term
Again, the doctrine of emblements does not apply to perennial crops.7 Perennial crops are
considered to be real property and are therefore owned by the landlord upon termination of the lease.8
Again, where the lease is terminated prior to that years' harvest, you may be able to argue on estoppel
grounds that the tenant may enter the premises to harvest his crop.9
Leasehold Improvements
Unless the lease provides otherwise, personal property that a tenant permanently affixes to the
land as a fixture is owned by the landlord upon the termination of the lease.10 To determine if a leasehold
improvement has become a "fixture" the leasehold improvement must be "(1) be actually annexed to real
property or something appurtenant thereto; (2) be applied to the use or purpose to which that part of the
realty with which it is connected is appropriated; and, (3) be intended by the parties as a permanent
accession to the freehold."11
While there are no cases directly involving drain tile installed by a tenant, in In re County of
Nassau the court determined that sewer pipes were fixtures.12 The court used the three-prong test to
determine that: (i) the sewer pipes were installed underground with the only means of access through
manhole covers, (ii) the sewer pipes were affixed to a large network underground and to buildings and
(iii) it was ridiculous to think sewer pipes would be dug back up.13
Drain tile is analogous to sewer pipes and therefore it may be argued that drain tile is a fixture
which is the landlord's property upon termination of the lease. Drain tile is installed a few feet under the
soil for purposes of draining water and is intended to remain under the surface for an indefinite period of
time. On the other hand, drip lines are installed above the soil and are easily removable (unlike drain tile)
and therefore it may be argued that drip lines are not fixtures.
6
Benson v. Morse, 109 N.Y.S.2d 57 (Ontario County 1951).
Id.
8
Id.
9
Benson v. Morse, 109 N.Y.S.2d 57 (Ontario County 1951).
10
Ombony & Dain v. Jones, 19 N.Y. 234, 240 (N.Y. 1859).
11
Metromedia, Inc. v. Tax Com., 60 N.Y.2d 85, 90 (N.Y. 1983).
12
In re County of Nassau, 40 Misc. 2d 384, 386 (Nassau County 1963).
13
Id.
7
Scolaro, Fetter, Grizanti, McGough & King, P.C.