– By Doug Emmerthal, Supervisor of Forest Practices Act Program
(Note from the Editor: This article is the second part of an article submitted by Jasmine Wolf. The first part was published in the Sept. 03 issue of this newsletter. The following article was given to Jasmine by DEP Forester Doug Emmerthal as a suggested guide for landowners)
Steps landowners can take to protect their timber investment
Contact the Department of Environmental Protection’s Service Forester in your area prior to beginning the timber selling process. The Service Forester is an experienced, knowledgeable professional who can be called upon to visit your forest, gather and provide information and start you on the path toward a successful timber harvest. Service Foresters can spend up to one half of a day in the field with a given landowner at no charge.
Strongly consider hiring a consulting forester to represent you in selling the timber and monitoring the harvest operation. Absentee landowners, the elderly, those without extensive experience in selling timber, and those too busy to monitor the timber harvest should strongly consider this. Many owners have found that consulting services have more than paid for themselves in higher prices and better quality work.
Determine if the potential buyer is properly certified as a forest practitioner in Connecticut before selling timber. State law requires this certification to conduct commercial forest practices. Contact the Division of Forestry’s main office for a list of who is certified or search the DEP web site at www.dep.state.ct.us. Follow the menu for Recreation and Natural Resources to Forestry.
Know exactly the volume and quality of timber that is being sold and its approximate value. Have the timber cruised to determine its volume, quality and value by a professional certified forester working for the landowner prior to placing timber on the open market. Timber prices fluctuate from year to year. The information and advantage received will more than pay for the cost of the appraisal. The best way to thwart fraud or expose a potential bad deal is for the landowner to be completely aware of the volume and value of the timber to be sold. The best way to determine this is from an appraisal conducted by a neutral party.
Identify what trees are to be sold by having them marked with a special paint. Typically the marks are made at 4 1/2 feet from the ground and at ground level so that it is easy to tell if the correct trees have been cut. Be sure that each potential buyer submits a bid only for those trees designated for sale. By only considering bids made for the same trees the bids may be fairly compared to each other.
Once the timber is placed on the open market, seek offers (bids) from at least three different parties.
Ask for references and check them! In addition, visit the office of the towns in which the potential purchaser has worked to see what their experience with the person has been. Seek out forest landowner groups for their comments as well.
Use a comprehensive contract written or examined by an attorney familiar with the timber industry or a professional consulting forester who is working for you. Timber contracts must identify and address key requirements designed to protect the landowner that are not often found in contracts commonly used in other service industry businesses. Failure to have a sound contract that addresses the issues specific to the industry may result in enormous loss and expenditures later.
Do not accept excuses for breach of contract such as late payments, no matter how compelling they may be. Heart wrenching stories have caught the compassion of many owners. Other times the mill is blamed for late payments to the logger or the check is said to be in the mail. Often, however, it is simply a ploy to allow the logs to be removed from the property and marketed before payment is made to the owner. Once the logs are gone, owners are often frustrated when the logger fails to return telephone calls. The litigation that follows is often successful but is expensive and may fail to recover money for the landowner as the logger has carefully hidden assets. If you find yourself in this situation act immediately by contacting an attorney. The longer the delay the larger the potential loss.
Do not fall prey to scare tactics. Intense pressure is often exerted on owners to sell timber quickly such as false stories about falling timber prices, trees dying due to insect problems, or that the individual is cutting timber nearby and can offer the best deal. Taking the extra time necessary to approach the sale of timber carefully as suggested in these guidelines will not ordinarily cause a delay long enough to result in significant loss from insects or falling prices.
Conduct frequent and random onsite inspections of the harvesting operations. Keep track of the amount, type and quality of timber being removed from the property. Absentee landowners and those unable for whatever reason to closely monitor the progress of the actual timber harvest are the most vulnerable. Landowners that elect to retain an economic interest in the timber after it has left the property are especially at risk. Retained economic interest payments strategies such as “sharing the profits” or payments made based on mill scale slips received by the logger after the timber is delivered to the mill should be followed very closely. Extensive fraud schemes have been discovered in Connecticut and nation wide where the logger supplies the owner with falsified mill slips, mills slips from another property indicating a lesser value, or by simply not turning over all of the mill slips. With a single truckload of high value logs bringing $5,000 or more, just a few unnoticed truckloads could result in significant loss to the owner.
Be cautious when timber is being harvested from two adjacent properties at the same time. Accounting for what wood has been removed from what property is difficult. This situation is somewhat like a shell game. Without actually following each tree from stump to mill one never knows who was paid if payment was made at all.
For those not currently selling timber from your property, watch out for timber operations in the neighborhood. If you cannot do this yourself, find someone to do this for you. A common method of timber theft is to extend a timber operation onto an unsuspecting neighbor’s property. Once the cutting is completed and the logger is gone it is very difficult to recover damages. Be sure property lines are clearly and extensively marked. Walk the boundary lines often, especially if there is timber harvesting in the neighborhood. Be very cautious of excuses provided in the event that timber is harvested without the owner’s permission. When caught, most will profusely apologize and offer to pay for the damages. Regardless of what offer is made a professional forester should be brought to the site to evaluate the extent of the damage.
Doug Emmerthal, Supervisor of Forest Practices Act Program
Department of Environmental Protection, Division of Forestry