TYPES OF TIMBER RELATED CONTRACTS 12/7/2018 W.L. Hoover

Subject of the Contract Standing timber (stumpage) Products cut from the timber Logs Lumber Firewood Other 12/7/2018 W.L. Hoover

Type of Disposal Outright sale Leasehold interest Existing timber Land Timber to be grown 12/7/2018 W.L. Hoover

LOGGING SERVICES CONTRACT Landowner hires logger to cut timber for them Timber has not been sold Logger has no title to timber or logs No “contract right to cut” Landowner retains ownership of logs and is in control of their sales 12/7/2018 W.L. Hoover

CONTRACT RIGHT TO CUT Landowner grants logger the right to cut and sell timber Logger has a “contract right to cut and sell logs on their own account” Landowner is paid based on log sales revenue Payments constitute royalties 12/7/2018 W.L. Hoover

SALE CONTRACTS Sale - Contract whereby property is transferred from one person to another for a consideration of value, implying the passing of the general and absolute title, as distinguished from a special interest falling short of complete ownership. 12/7/2018 W.L. Hoover

TIMBER SALE CONTRACTS Executory sale Contract under which something specified in contract is to be done by either party before delivery and passing of title. 12/7/2018 W.L. Hoover

TIMBER SALE CONTRACTS Not a real estate transaction Called timber deed, or lump sum contract It’s a Uniform Commercial Code (UCC) transaction Usual timber sale contract is an executory contract for the sale of goods. 12/7/2018 W.L. Hoover

Shares Contract, or to sell “on the shares” Form of contract unknown unless specified, Frequently not in writing -- a parol contract, Revenue from sale of cut products split between landowner and logger based on specified percentage, Critical question is who owns cut products when they are sold? Granting a contract right to cut to logger is key How amount of payment is determined, and time of payment not determining 12/7/2018 W.L. Hoover

LAND CONTRACT Legal name – title retention contract Other names Contracts for deed Installment land contract Seller retains title until payments are completed Buyer has no independent right to sell timber 12/7/2018 W.L. Hoover

Life Estate “Life tenant” is owner under terms of a will until their death, then title goes to remainderman named in will, Life tenant has complete right to sell timber, but “remainderman” may be able to sue for a “wasting” 12/7/2018 W.L. Hoover