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Long-Term Timber Lease of Family Land
As described above, by 1957 petitioner and his father each
owned a 50-percent interest in the family land. On January 3,
1957, petitioner and his father entered into a long-term timber
lease with Hiwassee, granting Hiwassee the right to cut and
remove timber on 9,091 acres (the leased land).2 The term of the
lease is for 66 years, expiring on January 1, 2023.
Hiwassee agreed to pay annual rent of $1.75 per acre,
payable for each calendar year by February 1 of that year. The
annual rent is to be adjusted each year by the same percentage as
the annual average of the Wholesale Price Index for all
commodities (now the Producer Price Index) (PPI) increases or
decreases relative to the Wholesale Price Index for 1955. The
annual rents are adjusted “only for increments of increase or
decrease equaling or exceeding five percent (5%) from the 1955
2 Bowater, Inc., is the successor in interest to the rights
of Hiwassee Land Co. (Hiwassee) under the lease on the subject
property. References to Hiwassee hereinafter also include
references to Bowater, Inc., as successor in interest.
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Last modified: May 25, 2011