Buyer Beware!

 Posted by at 9:06 am
Aug 182012
 

Disclaimer: Clearly I am not an attorney and it is not my intent to engage in legal analysis or advice, but this incident (reported by the Maine Forest Service) is just too interesting NOT to write about.

A seller who happened to be a logger sold a parcel of land to a buyer but maintained the “stumpage rights” (the right to harvest the timber) on the property. This is certainly not an unusual practice and we are reminded that seller’s can, of course, maintain a number of different rights. Typically this is negotiated to both parties agreement and documented in the purchase and sale agreement. We need to do more than hope that these rights (and responsibilities) are accurately recorded when the deed transferring title is written.

For purposes of keeping the players straight, once title transferred, our buyer in this story becomes the owner.

In this interesting case, the logger subsequently exercised his right and harvested the timber (on property he no longer owned, remember). In completing the harvest, the logger (perhaps unintentionally) committed a 50 acre clearcutting violation of the Forest Practices Act (FPA). In the settlement agreement both the logger and owner were assessed penalties and the owner was required to to develop an after-the-fact forest management plan for the clearcut area.

We might, of course, debate the fairness of this. (The Maine Forest Service’s position is that “penalties for forest-practices rule violations are intended to remove the financial benefit obtained through such violations.” The implication in this case is that both the logger and owner received some financial benefit from the harvest.)

But the point for our purpose is “buyer beware” of ANY arrangement that gives another party rights to your property. Conveying (or in this case allowing the seller to keep) those rights does not leave you without responsibility.

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