The Commissioners of the Land Office (Land Office) has approximately 750,000 acres of land in 42 counties managed by the Real Estate Management Division. Income earned through leasing these lands is directly distributed to the beneficiaries of the trust.
An agricultural lease is usually for a five-year lease term, the lease can be used for crop production, grazing, hunting, recreation or a combination of these uses.
Approximately one-fifth of the total agriculture leases are appraised and offered for lease each year. Appraisals are done approximately six months before the end of a lease term. The appraised rent for a lease will be the minimum acceptable annual rent for the lease at the annual fall lease auctions. Any unleased tracts will be offered at various times throughout the year, normally through a sealed bid process, but may be live auction at the discretion of the Land Office.
Some agriculture leases may be offered with special conservation provisions which require the lessee to perform specific tasks such as removal and stacking of cedar trees, spraying brush or weeds, planting or sprigging grass, grazing restrictions, etc. All work is to be completed on a specific date prior to the end of the lease term. Real Estate Management Specialists are assigned to each area to oversee proper lease management of the leases.
The Commissioners of the Land Office also offer short-term commercial and long-term commercial leases.
Approximately one-fifth of the Commissioners of the Land Office agriculture leases are offered annually through public auction. These lease auctions usually occur from mid-October to early November at different locations in central and western Oklahoma.
Leases to be auctioned are appraised approximately six months before the end of a lease term to determine market rent values. The appraised rent for a lease will be the minimum annual bid accepted for the lease at the annual fall lease auctions. On the date of the auction, the successful bidder must pay 50% of the first year’s rent as deposit. Any bids of $500 or less must be paid in full. The balance of the bid rental will be due by January 1 of the following year. Each year’s rent thereafter will be due in full by January 1 of that year. If payment is not received by January 15, interest is retroactive from January 1. These sealed bid offerings will occur at various times throughout the year.
By submitting a bid, the bidder acknowledges and accepts the terms and conditions of the lease.
After the auctions, unleased tracts can be leased at the appraised market rent values based upon availability. During the year some agriculture leases may become available. Any of these unleased tracts will be appraised for market value and are typically offered through a sealed bid process. These sealed bid offerings will occur at various times throughout the year. If a sealed bid process is used, lease payments are to be included with the sealed bid.
A lease contract shall be awarded upon the approval of the Land Office to the person(s) or entity(ies) bidding the highest annual cash rental. The Land Office reserves the right to reject any or all bids and may refuse to accept any bids on an agricultural lease where the party placing the bid is in default of any other lease with the Land Office.
Agricultural Lease Assignments
Agriculture leases can be assigned, transferred or have lessee names added or removed. The current lessee is responsible for the improvements, rent and all of the other lease requirements until the assignment is approved, in writing, by the Commissioners of the Land Office.
The assignment process requires a completed Land Office lease assignment form with all required documentation to be provided to the Land Office. Once all information is received and the assignment is approved, it is recorded and written notice will be sent to all parties to the contract.
The Land Office is not involved in how the parties handle the rent, fences or other improvements to the land. The lease contract must be paid current to transfer a lease.
An assignment form must be completed with all information requested.
Many agricultural leases have irrigation wells or are adjacent to land with an irrigation well. The lessee may apply for an irrigation permit at a fee determined by the market value rental amount for irrigated acres for comparable deeded land. An irrigation permit term is for April 1 through March 31 of each year.
Lessee is responsible for keeping records of times and rates water was applied to the irrigated acres. The area Real Estate Management Specialist will contact the lessee after the first of the year for the irrigation water use information that is to be reported to the Oklahoma Water Resources Board.
Improvements such as fences, windmills, gates and cattle guards that are necessary for the use of the lease may be placed on the property with prior written approval from the Land Office. These improvements remain the property of the lessee. If current lessee chooses not to continue leasing Land Office property where improvements have been made, lessee may sell the improvements to the incoming lessee or may remove the improvements within 60 days of expiration of the lease. Incoming lessee is not required to purchase these type improvements, nor is outgoing lessee required to sell the improvements to the incoming lessee. If improvements are removed, all materials and debris must be removed. If clean-up by the Land Office becomes necessary, the Land Office may pursue legal recovery of the clean-up costs.
If any improvements are owned by the Land Office, it will be noted in the lease auction notice and the lease contract. Please contact your local Real Estate Management Specialist for answers to specific questions about improvements.
The following is legal language from the Notice of Invitation to Bid that becomes part of the agricultural lease contract by reference:
“Improvements located on the leasehold property that are considered movable without any manifest injury to the land are subject to being removed or otherwise disposed of by the lawful owner(s). Any fences required by agreement or by operation of law shall be constructed and paid for by lessee. Such improvements must be removed or disposed of within sixty (60) days after the expiration of the Lease. If there is a growing wheat crop on leased property, irrigation pumps and motors may be left in place until April 1 of the year following the expiration of the Lease. Possession and/or use of a well present upon the leased land will be surrendered to the new lessee no later than April 5 following the expiration of the Lease term.
Improvements located on offered leasehold property considered not movable without manifest injury to the land (i.e. ponds, dams, terraces, water wells, waterways, and other conservation structures, etc.) are a permanent part of the land and are the exclusive property of CLO.”