Payment Terms on Tree Sales: Deposits and Stages

How do buyers usually pay for standing trees?

There are four common patterns. Only some of them protect the seller.

The last pattern is the one that hurts owners most. It is the pattern this page warns against: the buyer who cuts first and pays later. After the 2023 directive on unprocessed timber exports, InfoNile reported a glut, buyers using it to take mature trees at low prices, and local buyers not purchasing much. A buyer under that pressure may offer to pay "after sales". Say no, or accept only if the buyer has paid enough up front to cover the first blocks and you can stop the work at any time.

The seller-side route is explained in how to sell standing trees, and price negotiation in price negotiation for standing trees.

How big should the deposit be?

We found no official or published standard for a deposit on a tree sale in Uganda, so any percentage we gave would be invented. The honest answer is that it is negotiated. What you can do is test the buyer's seriousness with these steps:

• Work from your cost. The deposit should at least cover the loss to you if the buyer walks away, for example the cost of a new count and relisting, and your time and the delay.
• Tie it to the first block. A good deposit is enough to pay for the first block or two, so that the buyer never cuts ahead of money.
• Make it real money. A token amount is a signal, not a deposit. A buyer who will not pay a meaningful sum before the work starts has a cash problem.
• Say what happens to it. Is it refundable if the buyer withdraws before signing? Is it kept if the buyer withdraws after? Write this down. Section 62 of the Contracts Act, 2010 lets a contract name a sum payable on breach and limits the claim to reasonable compensation up to that sum, so keep the amount fair.

Use the tree value calculator guide to know your price before the buyer names a deposit, and see who buys eucalyptus poles for buyers who may have a cash flow of their own.

How does payment by block harvested work?

Divide the trees into blocks on a map, each a few acres or a natural section with its own count and price. The buyer pays for a block, you confirm the money has arrived, and only then may that block be cut. The next block follows the same way.

1. Define blocks. Number them on the map attached to the contract, with the count and price for each.
2. Pay before cutting. The buyer sends the payment for block 1. You confirm receipt in writing.
3. Cut block 1. Crews work only in block 1. You can inspect that nothing outside it was touched.
4. Repeat. Block 2 is paid before it is cut, and so on.
5. Final balance. Anything left, such as the retention for clean-up, is paid by a fixed date after the last load leaves and the site is signed off.

This pattern keeps the buyer's exposure small and yours smaller. It also makes the deadline simpler: a block not paid for by a stated date returns to you. The harvest deadline page shows how to write that.

Why must no tree be cut before it is paid for?

Because after a tree is felled, you cannot take it back. A cut log can be loaded onto a truck in a day, and chasing it later means evidence, a lawyer and a court. Write the rule into the contract as a plain sentence: "No tree in a block may be felled until the Seller has confirmed in writing that the price for that block has been received in full."

Back it with these controls:

• Ownership. State that trees remain yours until the price for their block is paid, and felled produce passes to the buyer only after payment.
• Stop-work right. You may order cutting to stop, and the buyer must obey, if a payment is late.
• Proof of payment. Accept only cleared funds, not a screenshot of a transfer. Check your account or wallet.
• Inspection. You or your representative may visit at any time to check that cutting stays within paid blocks. A paid, escorted site visit can do this if you live elsewhere.
• Illegal produce. The NFA says owners of vehicles caught transporting illegal forest produce may be fined. It protects no one to be paid out of timber that was cut outside the permits.

Should I use escrow, and what receipts should I keep?

Escrow. Escrow means a neutral person holds the money until agreed conditions are met. We found no Uganda-specific guidance on escrow for tree sales. If you want it, ask an advocate whether they can hold the deposit in a client account until the contract is signed and the count is agreed, and release it as blocks are paid for. Both sides should sign instructions that say exactly when money is released. Get the advocate's terms and fee in writing first. Our guide to paying for land safely covers payment safety for land sales, which is a separate transaction.

Receipts. Keep a file for the sale and put into it:

1. A signed receipt for each payment: date, amount, block, payer's name, payee's name and how it was paid.
2. Bank statements or transfer records for each payment.
3. The contract, the map, the count record and any signed amendment.
4. Copies of permits and fee receipts the buyer obtained.
5. Dated photographs of each block before and after cutting.

Section 10(3) of the Contracts Act, 2010 treats a data message as writing if it can be accessed for later reference, so messages and emails can be useful evidence, but a signed paper or PDF is stronger. If cash is used, count it in front of a witness and sign a receipt on the spot.

Who pays NFA and district fees on a tree sale?

This is the part of tree sales where numbers change most, so we give dates and tell you to check. The National Forestry Authority says that harvesting for trade on private land attracts a permit fee, and that none applies for personal use. It says trees outside central forest reserves are regulated by the District Forest Officer. We could not find a current published fee schedule, so the figures below come from a 2012 WWF study and may have changed.

The study also found that fees and taxes were not uniform between districts. The law does not tell you who bears these costs in a private sale, so the contract must. The sensible rule for a seller is that the buyer, who harvests and moves the timber, obtains every permit, pays every fee and gives you copies of the receipts before felling starts. If a fee is due on your side, such as a fee for NFA technical services, agree it separately. Do not assume that the sale price is free of tax. Read tax on selling trees and permits to cut and move timber, and ask a tax adviser.

What should I do next?

Choose a payment pattern, write the block map and payment dates into the contract, and set the stop-work right. Then compare buyers on payment terms, not only on price. The 12 clauses of a standing timber sale contract shows where payment fits, and the checks buyers make before they pay shows the other side. If you are ready to sell, list your forest and see the forest listings. The forest trees hub links more guides. This is general information, as of November 2026, not legal advice.

Frequently asked questions

Related guides

• Forest Trees for Sale in Uganda: Standing Pine and Eucalyptus
• Negotiating the Price of Standing Trees
• Standing Timber Sale Contract: 12 Clauses Sellers Need
• Buying Standing Trees: 10 Checks Before You Pay
• Tax on Selling Trees in Uganda
• Who Buys Eucalyptus Poles in Uganda?