Timber Harvesting Contracts and Water Quality Protection

 

If you want to get the most legally sound deal out of a timber sale, put it in writing.

Sample Contract for Sale of Standing Timber

Suggested elements of a timber contract

Protect water quality with a timber sale contract
A timber sale contract is a relatively simple document and / or map that binds you and the logger into a legal agreement. It contains the terms of the sale, restrictions on all involved parties, a process for resolving problems and an exact tally of timber to be removed.

Some forest owners have received unfair treatment from logging companies, even when a timber sale was under the control of a contract. The difference is that these forest owners were able to withhold payments and future timber rights while the dispute was being resolved.

A contract is where language regarding forest BMPs should be placed. Some examples of terminology that protects water quality is for one of the parties to:

. . . comply with the New York State’s silvicultural best management practices which are incorporated in the State Water Quality management plan.

. . . repair damage caused by logging to ditches, fences, bridges, roads, trails, or other improvements damaged beyond ordinary wear and tear.

. . . liability for damage, destruction, or restoration of private or public improvements occasioned by or in the exercise of this contract shall be the sole responsibility of . . .

. . . provide water bars on haul roads and skid trails where grades require their installation to control erosion.

. . . stream crossings should be by bridge or culvert wherever feasible. If a stream must be forded it shall be at right angles.

. . . no placement of cut or fill material on the outslope in a manner likely to cause instability or landslide.

. . . maintenance of a streamside management zone along perennial streams, intermittent streams, and sinkholes as suggested by the NY Best Management Practices.

. . . removal and proper disposal of all hydraulic fluid and other lubricants or chemicals.

. . . the timely regrading and re-establishment of approved ground cover on all exposed or disturbed areas.

. . . agrees to perform all post-harvest operations required by the Best Management Practices.

This information is not a substitute for legal advice and landowners should consult with lawyers or foresters familiar with local and state laws.

Other suggested elements of a timber contract:

Names and addresses of seller and purchaser - To identify the parties to the contract for legal reasons and so that each party will know with whom he is dealing.

Declaration of sellers ownership and right to convey - To insure the buyer that he is not wasting time or money on timber he has no chance of obtaining.

Exact location and legal description of the area - The legal description should describe the sale area by the rectangular system of U.S. Public Land Survey. Acreage and method of marking the sale area boundary should be included.

Timber bought and sold - The wording must designate timber sold on the basis of volume by species. Unit of measure (cords, cubic feet, board feet, or weight), log rule, and method and place of scaling should be included. Provisions should be made as to who shall do the scaling, at what place, at whose expense.

Price basis and methods and terms of payment - Timber may be sold for a lump sum or on value per unit basis (such as dollars per thousand board feet). The price basis, method and timing of payment, and the timing of title transfer must be understood by both parties.

Financial responsibility of the buyer - The seller should compel the buyer to carry personal liability insurance, property damage insurance, and Workmen's Compensation Insurance during the life of the contract. To insure performance, the buyer may be required to put a cash bond in escrow.

Duration of agreement - Provisions for or against extending time limits may also be included.

Conditions governing removal - Generalities are worthless; clauses restricting the manner and methods of harvesting must be specific. Include: 1) equipment limitations, 2) provisions for buyer's ingress and egress, 3) responsibility for damage to other property by fire or negligence.

Conditions governing utilization - Include stump heights, minimum lengths and diameter of merchantable material, and penalties for noncompliance.

Ownership of by-products - Slabs, shavings, chips, stumps, and sawdust are salable in some areas. Ownership disputes may occur when local markets suddenly develop during the life of the contract.

Provision for or against assignment of the contract - If the seller definitely wants the party with whom he negotiates to be responsible for performance, he will forbid assignment of the contract in whole or in part. On the other hand, an assignable contract will sometimes command a higher price for the timber and it might be to the advantage of the seller to grant this right. When assignment is permitted, the buyer will sometimes agree to be fully responsible for performance even though he sells his interest in the timber to another.

Clause for arbitration - Generally, in the case of disagreement, each party to the contract names one person and they agree on a third to settle disputes of a technical nature. If the contract is of long duration it may not be feasible to select the arbitrators at the time of writing the agreement and name them therein, but it is a good plan to do so when practicable.

Signatures of all parties.

Notarization.

Registration - Despite the importance of legal documents and the care of handling which they deserve, they sometimes become lost or destroyed. Timber sale contracts convey real property and they should be recorded in the public registry at the courthouse.

This information is not a substitute for legal advice and landowners should consult with lawyers or foresters familiar with local and state laws. Contracts can be written, and changed, by the mutual consent of the timber buyer and timber seller.

 

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© Please cite source: Cornell Cooperative Extension, 2004 Written by James Ochterski, CCE - Schuyler County