OSU Extension Agricultural Law Newsletter
February 2000
Property/Fence Law
What if a fence between adjacent properties is not on the property line?We usually presume that a fence between adjacent properties separates the two properties and is on the boundary line. However, old surveys and prior landowners were not always accurate when placing fences. A new survey can reveal that a partition fence is not on the boundary line and actually encroaches on one property or another. Sometimes the encroachment is minimal and landowners are not concerned, but there have been instances where a partition fence is as much as ten feet beyond the boundary line between two parcels. In such cases, what happens to the original boundary line?
Ohio law recognizes a "doctrine of acquiescence" when adjoining landowners have treated a fence line as if it were the boundary line between the properties. If the landowners or prior landowners have mutually respected and treated the fence line as the property boundary for a period of 21 years or more, the fence line will become the actual boundary line.
However, this does not mean that adjoining landowners cannot honor the original boundary line. The landowners could agree to move the fence to the original property line or they could enter into an agreement establishing the boundary line, which would clarify the boundary line as the original line rather than the fence line. By recording such an agreement, future purchasers would have notice of the actual property line.
Be aware that Ohio law does not allow one landowner to remove and relocate the partition fence without the adjoining property owner's permission. For example, where a landowner learns that the fence line is not the true boundary line and then wants to move the fence accordingly, the other landowner must grant permission to move the fence. A landowner who moves the fence without permission of the adjoining landowner could be responsible for all costs of moving or replacing the fence.
See Ohio Revised Code Chapter 971 and Bobo v. Richmond, 25 Ohio St. 115, 118 (1874).
Trespass
Am I liable for injuries to a trespasser on my property?Liability for trespassers depends upon whether there is knowledge that the trespass is occurring. A property owner has a greater duty of care to a known trespasser than to an undiscovered trespasser. For example, if you are aware that neighbors often walk across your property, they are considered "known trespassers". The duty that a landowner owes to a known trespasser is to either make the property safe from any known dangerous conditions or to warn the trespasser of known dangerous conditions. The landowner is not liable, however, if the dangerous conditions are open and obvious to the trespasser or if the landowner is not aware of the dangerous conditions.
Liability differs in the case of an undiscovered trespasser. The only duty owed to an undiscovered trespasser is to refrain from harming the trespasser by "willful or wanton misconduct". For example, if you create a "trap" to harm anyone who might trespass on your property, you will be liable for resulting injuries since your intent was to harm the trespasser.
An exception to these rules arises when children are involved. A landowner may be responsible for injuries to a trespassing child if the landowner's carelessness created a dangerous condition that caused the child's injuries. Where a landowner has not taken proper care to store harmful chemicals and a trespassing child is injured by the chemicals, the landowner may be held liable. It does not matter whether the child's trespass was unknown to the landowner.
Although the above refers to "landowners," any party who is in control of the property may be liable for injuries. A tenant who possesses the property is deemed to be in control of the property, and may be held liable to the same extent as a landowner.
Business Organizations
What is a Family Limited Partnership?A Family Limited Partnership, or FLP, is a limited partnership in which ownership is restricted to a confined group - family members. This differs from other types of partnerships and corporations where transfers of interest are unrestricted or are publicly traded. The FLP is a valuable tool that offers tax and estate planning benefits where a family desires to keep a business in the family. In an FLP, income and losses are passed through to the partners, and the FLP itself does not pay income tax.
Like a limited partnership, the FLP consists of limited partners and general partners. Limited partners receive limited liability - i.e., are liable for obligations of the partnership only to the extent of their capital contributions. General partners will be personally liable for partnership debts and obligations.
Farm Leases
Does a farm lease need to be in writing, witnessed and recorded?A lease must be in writing and signed by the parties if its term is for more than one year. To be binding upon later landowners, a lease of one-to-three years should also be notarized and recorded in the county in which the land exists.
A lease for more than three years has the additional legal requirement of being witnessed. The lease should be in writing, signed before two witnesses, notarized and recorded. The lease then will be enforceable against the parties to the lease and against future owners of the land.
Bankruptcy
What is the current expiration date for Chapter 12 bankruptcy filings?The law providing for Chapter 12 bankruptcies has been in a constant state of uncertainty. Congress has yet to remove the sunset date for the law, choosing instead to keep extending the sunset date. The new expiration date is July 1, 2000, meaning that Chapter 12 filings must be made by June 30, 2000. Currently, Congress is considering a bill which would basically make Chapter 12 provisions permanently available, but the language is part of a larger controversial bankruptcy bill package which has not found sufficient support.
Livestock Contracts
What should I consider when entering into a livestock production contract?A livestock production contract sets up a different legal relationship for the livestock producer than traditional arrangements such as livestock marketing agreements, cash forward contracts and futures contracts. In these traditional arrangements, the livestock producer owns the livestock. In a livestock production contract arrangement, the producer is paid to raise livestock which is owned by someone else. This change of ownership creates new legal concerns for the producer. A producer should be aware of these concerns when reviewing a livestock production contract.
The Iowa Attorney General's Office has developed a good resource for producers who are considering a livestock production arrangement. The "Livestock Contract Checklist" is available on the Internet (www.state.ia.us/government/ag/farm.html). As the checklist states, a producer should work with an attorney prior to entering into a contract.
Farm Program Payment Limitations
Can an individual receive more than one program payment?In the previous issue of this newsletter, I explained that an individual or entity must qualify as a separate "person" who is "actively engaged in farming" in order to receive federal farm program payments. These rules define who is eligible for a payment. It is possible for an individual to be eligible for a payment under several different definitions of a "person." For example, a sole proprietor who is also a shareholder of a corporation could benefit from two payments - one full payment as a sole proprietor and a respective share of a payment as a shareholder of the corporation. How many times can an individual receive a payment, or part of a payment? Where an individual is eligible for more than one payment, the "three entities rule" comes into play. The rule states that an individual may receive payments from no more than three entities, with an individual being considered an "entity." In the example above, if the individual also owns stock in another corporation and is a partner in a farming operation, the individual could be eligible to receive payments under four different entities - as a sole proprietor, as a shareholder in two corporations and as a partner. However, the three entities rule only allows the individual to receive payments under three of those entities. The individual will be required to select three of the four eligible entities, and will want to maximize total benefits by choosing the three entities under which he or she will receive the highest amount of each entity's payment.
Legal Resources on the Internet
State of Ohio (www.state.oh.us) -- the State of Ohio website provides all of the information and links necessary to locate Ohio laws, rules, the Constitution and Ohio Supreme Court cases. The following sites can be accessed through the State of Ohio site, or directly as stated below:
Ohio Revised Code (www.orc.avv.com) -- This is a very easy to use site for finding Ohio statutes. The site is set up in a double-framed book format. One frame provides a table of contents for the code, allowing you to move easily into specific titles. Title 9 contains most of the agricultural laws. The second frame allows you to search either a specific title or the entire code, which is a time saving feature if you already know what part of the code you want to be in.
Ohio Legislature (www.legislature.state.oh.us) -- The General Assembly's website allows you to quickly track the status of a bill and also provides bill content. Bill analyses by the Legislative Service Commission are also available.
Ohio Supreme Court (www.sconet.ohio.gov) -- Written decisions of the Ohio Supreme Court are accessible on this site. Click on the "Opinions" option under "Reporter of Decisions" on the home page.
Until next time...
Peggy Kirk Hall, Legal Educator
Ohio State University Extension