In the summer 2021 newsletter, we had information covering landowner liability for persons on the land. The following overview focuses on land activities that can create liability for landowners. This information is provided by The National Agricultural Law Center. Visit their website at nationalaglawcenter.org for more information regarding liability and other legal matters important to agricultural landowners.
Nuisance: Liability for nuisance is based on the idea that activities on a landowner’s property may not unreasonably interfere with the use and enjoyment of other people’s property. A nuisance may be either private or public. In a private nuisance, only a small number of property owners are damaged in a discrete manner. In a public nuisance, the community’s rights as a whole are damaged in a more general manner. Courts often use a cost-benefit analysis based on many factors in order to determine if the alleged interference with property rights was unreasonable. Landowners with production agricultural operations may become subject to nuisance actions if the effects of the operation excessively interfere with neighboring property owners’ rights, especially if the region is becoming more urbanized. Right-to-farm statutes may afford some protections to farmers, but the outcome of these types of cases is often uncertain, even if the agricultural operation is conducted legally and according to acceptable management practices. If plaintiffs prevail, farmers may be forced to pay damages or even cease operations.
Trespass: Landowners may potentially be liable for trespass for activities on their land. A trespass occurs when there is an unpermitted physical invasion of another’s land that interferes with their property rights. Trespasses may arise from agricultural lands in the form of ground water contamination, odors, dust, or wayward livestock.
Environmental Regulation: Landowners are potentially liable for actions that violate environmental regulations. These laws and regulations may be federal, state, or local and include such things as the Clean Water Act, the Clean Air Act, the Endangered Species Act, the Federal Insecticide, Fungicide, and Rodenticide Act, and the Comprehensive Environmental Response, Compensation, and Liability Act.
In addition to statutory environmental liabilities, potential landowner liability from environmental damage may arise in a situations where crops grown with different production methods are in close proximity to each other, and the production methods of one landowner cause damage to the neighbor. This may arise from pesticides drifting from nonorganic crop fields to organic crop fields causing damage from the loss of organic certification and a corresponding loss of value in the crop. It may also arise where genetically modified pollen drifts from a genetically modified crop into a nongenetically modified crop causing gene contamination and a loss in value of the crop. More information pertaining to environmental laws and their relationship to agriculture, can be found on The National Agricultural Law Center website under Biotechnology, Clean Water Act, Environmental Law, and Pesticides Reading Rooms.
Other Potential Liabilities: Landowners are potentially liable under a wide variety of circumstances. This overview describes the major areas for landowner liability, but other potential areas of liability exist including potential tax liabilities and liability associated with tenants.
Landownership requires the payment of taxes. In each state a certain amount of special treatment is given to agricultural landowners. Some of these statutes creating the preferential treatment for agricultural lands are intended to preserve the rural character of the land and, as a result, also contain rollback provisions. These provisions are designed to recapture some of the lost tax revenue if the agricultural lands are developed for nonagricultural uses.
Generally, landowners are not liable for the actions of their tenants. Some exceptions exist such as when landowners conceal dangerous conditions or if a landlord agrees to repair the land and fails to do so properly. Also, some statutes, such as CERCLA or provisions of the Farm Bill that create payment programs or environmental requirements, may impose liability on participating landowners under certain circumstances if they were aware and sanctioned the tenant’s violations of the statutes. Bottom line, protect your assets with liability insurance and vigilance. If you or a trusted advisor is not looking after your property, risk of liability increases.