Land rent auctions have been growing in popularity across the Midwest, but Mike Still says they lack one important thing for both buyers and sellers—confidentiality.
Mike attended several land rent auctions over the years. However, it was a land rent auction in Iowa that started him thinking there had to be a better way of securing a piece of land than standing at the county courthouse and bidding with your neighbors in plain sight.
"Often times you will see either neighbors or family members that will not bid against each other," Mike says. "It makes you wonder if the landowner is truly getting the potential income off of that tract of land."
So Mike, along with his son, Michael, started Cropland Lease, LLC, a company that specializes in silent land rental auctions. It will specialize in land in Missouri, Iowa and Kansas.
How it works
Landowners contact the Still family to help set up a silent auction for a tract of land. It can be land used for crop production, pasture or hunting. Then the family creates a land profile. "It will include the location of the land, soil type and if it is cropland, production records," Michael explains. Potential bidders will be able to view that information, as well as, aerial photos online. If individuals do not have access to a computer, he says the same information can be sent in the mail.~~~PAGE_BREAK_HERE~~~
The auction will be open for a set period. Interested parties can place confidential bids either online or via telephone. Only one bid will be accepted per bidder. "We are not staffing an online bidding site, where individuals can see what the current bid is," Mike explains. "We want lessees to provide their best and highest bid, what they believe the land is worth, the first time."
Once the auction is closed, the winning bidder will be notified within five business days of their successful bid. "We will not disclose the winning bidder or amount," Mike adds.
The entire transaction will be in writing. "We are constantly amazed at how many rental agreements are still done in the country without a written agreement," he says. "Both lessor and lessee need to have the protection that a written document provides."
Keep it quiet
Each successful bidder will be required to sign a confidentiality agreement. "This requires that they do not disclose the final bid," Mike says. Certain exemptions may be made for financial institutions and Farm Service Agency requirements. "What we want to prevent is the entire neighborhood knowing how much the landowner is receiving in rent," he adds. "That is a private matter between landlord and tenant."
Ultimately, the landowners is in complete control of the rental auction, including conditions of the sale and terms of the rental agreement.
Michael says the silent land rent auction is a great method for landowners searching to lease out a piece of ground. "We are here to make sure that the landowners are getting the best possible price for their property and that the conditions of the agreement are met and remain confidential."
For more on benefits to landowners and tenants click here.