Agree a Timber Sales Contract
It is strongly recommended to have a written contract with anyone involved in timber harvesting and sales in your forest (e.g. your forester, timber buyer and/or harvesting contractor). Verbal agreements are not satisfactory as they can be open to misinterpretation.
Engaging a forester to organise your timber sale
If employing a forester to oversee your timber sale, it is advisable to have an agreement drawn up setting out what services they will provide and the costs involved. Services may include:
- harvesting-related applications:
- felling licence and harvesting plan
- road grant
- Nature Impact Statement (NIS – a study carried out to determine if a forest operation may pose a rise to a Natura site)
- preparing a risk assessment and site health and safety plan
- carrying out a forest inventory to get an estimate of the total timber volume and average volume per tree
- estimating timber product assortments, percentages of pulp, stake, pallet and sawlog
- securing quotes from a number of potential buyers
- managing and supervising the harvesting operations and timber security
- inspecting the work to see if operations are in line with the contract
- liaising with the buyer on behalf of the forest owner/seller
As the owner, you have responsibilities too. It is your responsibility to make sure that the conditions of the felling licence and the Health & Safety at Work Act are adhered to.
A safety statement is a written document aimed at minimising exposure to risk or injury or ill-health for all people working in the forest. If the landowner is undertaking the work or is directing the work then he / she needs to prepare a safety statement. In turn all workers must abide by these measures.
For further details, see: Health and Safety
Timber sales contract
A legally binding contract clearly sets down the conditions of the timber sale and the responsibilities of each party. Such a contract is necessary to protect both parties and clarifies what is expected on both sides. A forester / buyer / harvesting contractor prepared contract should be read through and understood to ensure it protects your interests.
A timber sales contract should incorporate:
- your identity as the seller and proof of ownership of the timber
- the identity and contact details of the buyer
- the location of the site, relevant site features and the area to be harvested
- the price to be paid, including an agreed deposit, instalment payment schedule and when the transfer of the timber ownership occurs
- the method of measurement (m³ or tonnes) and the categories of products (pulp, stake, pallet and sawlog)
- agreement on road use, including maximum weights
- the start and finishing dates
- statement that harvesting will be carried out in accordance with best silvicultural practice and in compliance with the conditions of the felling licence
- the correct application of urea and dye on freshly cut stumps
- written proof that the buyer, their employees / contractor are fully compliant with, and are aware of their responsibilities under the Health & Safety at Work Act
- written proof of operator’s / contractor’s insurance cover and qualifications
- assign liability for property damage, including roads
- provision for the protection of the residual stand with penalties for unnecessary felling and damage
- the maximum length of time timber is left at roadside and the associated penalties imposed due to moisture loss when sold by weight
- use of a "docket system" or other appropriate systems and designate times when timber lorries can enter the site
- provide for the termination of the sales agreement if any of the provisions of the contract are not adhered to
- arbitration in the event of disputes between parties
This is not a comprehensive list of what should be in your timber sales contract.
Reference should be made to the Timber Sales Agreement (PDF). This document was produced by the Irish Timber Growers Association (ITGA) with support from the Forestry Division (DAFM).
It is important to have your solicitor give their professional advice on any contract drawn up. Your forester should also feed into the process.
Some foresters / forestry companies may also offer you a package where they undertake to harvest, transport and sell your timber. Management costs are charged as a percentage of the net timber value. Transparency in all stages of this process is very important. Ensure the terms of such a package are covered under an appropriate contract.
You should consider the following:
- who is buying the timber
- what prices are being offered by the end user - get a number of quotes
- be clear of the costs involved
- what is the method and timing of payment
- what are the responsibilities of the forester / forestry company
- what are the tax implications