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“Bee” Careful: Unique Considerations When Negotiating a Bee Storage Lease Agreement

Former Associate
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By: Colton Addy

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As demand for commercial bees used to pollinate crops (such as almond trees) has grown, so has the demand for facilities to store bees.  Entering a lease agreement for the storage of live bees presents some unique issues the parties need to consider when negotiating the lease agreement.

Don’t Bee Short-Sighted:  Bees are often transported to different areas depending on the time of year, which means bees are not stored in the same facility all year.  The lease agreement will often only provide for the storage of bees during the season when the bees are used for pollination in that particular area, but that does not mean the parties must limit the term of the lease agreement to a single season.  The parties may consider entering into a lease agreement for multiple years that only applies during the pollination season each year.

Bee Mindful of the Rent:  Whereas the parties usually base rent in a typical commercial lease agreement off of the square footage of space the tenant uses in the premises, it often makes more sense for both parties negotiating a lease for the storage of bees to base the rent on the number of beehives or bee colony boxes stored at the facility.  Basing the rent on the number of beehives or bee colony boxes provides the landlord with flexibility in storing the bees of multiple tenants in the same facility, and it can give the tenant flexibility with the number of bees it may need stored at the facility in any given season.  With such a rental arrangement, a landlord should consider asking for a commitment from the tenant to deliver at least a certain number of beehives or colonies for storage, and the tenant should consider asking for a commitment from the landlord to reserve space in the facility for at least that same number of beehives or colonies as the tenant is giving a commitment for.  Additionally, the parties will need to determine when rent will be paid.  In a general commercial lease agreement, rent is usually paid monthly.  With a bee storage lease agreement, however, a landlord may want to require the tenant to pay all of the rent for the season upon delivery of the bees, and the landlord may also want the tenant to pay a percentage of the rent to reserve space in the facility prior to delivery of the bees.  This allows the landlord to get an early indication of what space in the facility it will have available in the facility for other tenants given the somewhat flexible rental arrangement of the parties.

Don’t Bee Responsible:  Given that bees are living animals, the bees may be lost or suffer health issues, including death or colony collapse (“Bee Liabilities”), through no fault of either party.  The parties should both try to push the responsibility for Bee Liabilities onto the other party.  That being said, a tenant is unlikely to get a landlord to agree to take on such responsibility.  At the very least, a tenant should ensure that landlord remains responsible for Bee Liabilities caused by landlord’s negligent acts or omissions, and the tenant should ensure that the landlord must notify the tenant if the landlord’s facility has an equipment malfunction or some other significant event occurs at the facility that could affect the health of the bees and that tenant has the ability to remove the bees from the landlord’s facility in such a situation.  Ideally, if such an event occurs, the tenant should receive a rent abatement as well.  The tenant should also ensure that it obtains property insurance with an endorsement covering all of tenant’s livestock, goods and farm products stored at the landlord’s facility.  This will provide the tenant with some protection even if the landlord and the lease agreement do not.

While many key concepts in a lease agreement for the storage of live bees remain the same as in a typical lease agreement, a lease agreement for the storage of bees does present certain unique issues that the parties need to consider.