In May 2007, as part of its sustainable family forestry programme, MTK presented the Recreational Value Trading opportunity for privately owned land with particular recreational value. According to the proposal, a municipality, recreational area organization or even the State would able to purchase the recreational value of a specified piece of land for a fixed period.
For example, this land could be forest located near a population centre which is particularly well suited to recreational activity. The landowner would undertake, for a determined period, to maintain the forest in such a way that would be suited to recreational activity. Close to population centres there might also be, for example, areas intended for recreational use by senior citizens, beaching places on the banks of waterways, horse-riding parks, etc.
MTK has prepared an operating model for Recreational Value Trading. The operating model and its associated documents could be used by all parties interested in the buying and selling of recreational value.
1.1. Land ownership in Finland
Almost 80% of the country’s landmass is covered by forest and 10% by inland waterways. The majority of these are privately owned. 60% of forest is owned by private individuals.
1.2. Forests and the countryside provide many services
Finland’s countryside and forests offer many products and services to the society around them. Open fields and groves, waterways and well-maintained housing stock are all part of the rural landscape. The diverse rural landscape is also an attractive environment for tourism and leisure activities. Preserving forestry and fields in a cultivated state not only produces pure Finnish food products, but is also a prerequisite for preserving a living rural landscape.
Family owners of forests produce raw materials for industrial use and maintain forest diversity. At the same time family-owned forests offer employment and opportunities for recreation and enjoying the natural forest environment. Healthy and maintained forests, as well as the multi-faceted forest scenery, are part of a living and populated countryside.
1.3. The law protects landowners’ rights
In Finland, protection of each person’s property is safeguarded in the Constitution. The Constitution also protects the right to private ownership of land. Protection of property also means that no-one may prevent a person from using property he owns or controls in a normal way. If seeking to limit the right to private ownership or land usage, legal channels must be employed. Also, there are varying degrees of limitations and permit requirements for the care and usage of forests as well as generally a requirement to give notice of planned felling operations.
1.4. The freedom to roam offers an opportunity to enjoy nature
The freedom to roam means the possibility for every citizen to enjoy nature by, for example, collecting berries and mushrooms irrespective of who owns the land. Landowners offer this opportunity to all without recompense. The freedom to roam has two preconditions: it shall be temporary or occasional and not cause a nuisance.
The freedom to roam is a so-called yielding right. Therefore, the landowner cannot, on the basis of this right, be asked to limit his lawful activities such as felling operations and forest clearance work in the case of forests. If the landowner sets a certain area aside for special use, then the right to invoke the freedom to roam is yielded. In forests special use may mean, for example, felling areas and sapling stands to be planted in them. Under the freedom to roam, no commercial activity may be carried out on another’s property without the landowner’s permission.
1.5. More and more people seek to experience nature
Finns are active in outdoor recreation and traversing the natural landscape. According to a study on the recreational use of nature, more than half of Finns of working age go berry picking, and 40% pick mushrooms. Nearly all jog, ski or hike, in the majority of cases in a forest environment. Around half of the outdoor activities centre on forest areas used by the freedom to roam. The overwhelming majority (90% of summer cabin and berry-picking trips) are directed towards privately owned areas.
Nature tourism has particularly increased in Lapland, Kuusamo and Kainuu. Programme-based tourist services and products, such as motorized travel, dog-sled trips and horse trekking are generally forbidden in protected areas. More and more financial income in tourism is being made in commercial forests.
1.6. Recreational use being taken into consideration in forest management
The needs of recreational use are among the possibilities being considered in land use and forest management.
The Forestry Act does not contain specific stipulations on the consideration of recreational use in privately-owned forests. Nevertheless the Act provides the opportunity to manage forests in such a way that they are well suited to recreational use. Paragraph 6 of the Forestry Act states that “If the site where felling is to be carried out is of special importance in terms of the preservation of the diversity of the forest or in respect to the landscape or multiple use of forests, felling may be carried out in a manner required by the special nature of the site.”
Instructions for the consideration of the landscape and commercial use in forest management are also given in the guidelines and recommendations for the forestry of privately-owned forests. The destruction of marked pathways, etc, is clearly to be avoided in forestry work. Overgrown traditional environments will be restored where possible by clearance, after which they maintained by mowing or grazing.
95 percent of the country's forest is regulated in accordance with the FFCS system. Amongst other things the system stipulates the requirements pertaining to recreational use and safeguards the rights of responsible individuals to roam.
Recreational Value Trading is an operating model with which the needs and interests of the landowner and others enjoying the recreational value of the area can be reconciled. In recreational value trading the landowner surrenders certain rights relating to the use of his property, undertakes to maintain the land he owns so its recreational values (e.g. landscape values) are kept to an agreed standard and accords agreed rights for the recreational use of the land to the purchaser of the recreational value for a predetermined period in return for an agreed recompense.
The recompense will be determined according to the market and its amount will be agreed by the landowner (vendor) and the purchaser of the recreational value.
Either party (vendor or purchaser) may initiate the recreational value trade and contact the other party. Actively contacting landowners is particularly required from persons or parties interested in purchasing recreational value. On a local level, forestry associations are a natural source of information for matters pertaining to recreational value trading and through these the potential buyer will have an opportunity to contact the landowner. Forestry associations will also assist the landowner in matters relating to securing the trade, such as assessing the factors relating to the recreational value.
2.1. Parties to the Contract
The vendor of the recreational value is always the landowner/holder of the right to use.
The purchaser may be a private individual (e.g. neighbour), village association, recreational area association, outdoor activity or sport association, municipality, foundation, business/entrepreneur or tourism centre interested in the recreational and landscape value of the area.
2.2. Defining the object of the trade
The object of the trade (the recreational value) will be defined as concretely as possible during the drawing up of the contract. The matter in question is activity outside the freedom to roam.
The contract will always be centred on an area of land delineated on a map or marked on the terrain. Defining the size and shape of the area is a matter between the parties to the contract, and may be differ greatly depending on the object of the trade.
For example, the trade may concern
- transferring an area of forest to final felling for an agreed number of years
- maintaining a certain species or mixed forest in a particular area of a forest
- keeping a certain area open or, for example, as a meadow
- maintaining the view from a hill to a waterway
- maintaining the forest around an outdoor activity (or horse-riding) route
- establishing beaching and fire-lighting places and maintaining their immediate environment
The measures and scope of the tasks will be defined as unambiguously as possible in the contract.
The recreational value trading contract does not confer any ownership or tenant’s rights on the area which is the subject of the contract or on its soil or flora including trees. The land use type of the area which is the subject of the contract will not change. Generally the contract will not limit any other possibility to hike or enjoy nature in the area as established by the freedom to roam. Nevertheless the freedom to roam will be yielded when an area is put to special use; e.g. when the landowner and a nature tourism entrepreneur agree a recreational value trade on a smallish island, in which case the entrepreneur who has paid the recompense shall have the right to use the area.
2.3. Determining the duration of the contract
The contract is always for a fixed term. The vendor and purchaser will determine the period of the contract’s validity according to each case.
2.4. Determining the price
Recreational Value Trading is a market activity; therefore the price will be formulated within the market. There is no general pricing system for Recreational Value Trading; rather the price will be formulated in the discussions between the parties. In addition to possible loss of income to the vendor, the additional value of the object of the trade will be assessed in the recreational value trade.
Factors influencing the determination of the price include, the length of the contract’s validity, the nature of the area’s use, measures to be undertaken, the landscape, optional costs to the forest owner, the location of the area and its proximity to other similar areas and the risk of destruction to the area’s trees (e.g. root-rot fungus).
The following estimates/calculations can be used for determining the price:
- loss of income to the landowner
- losses due to the reduction in the value of the area or to its trees
- possible labour and materials costs
- recreational value benefits to the purchaser
- additional value derived from the area’s specific recreational value
2.5. Validity of the contract in relation to transfer of ownership
If ownership of the object of the recreational value trade changes in exchange for payment, then the contract is not binding for the new owner.
The recreational value trade contract may contain a condition, according to which, in connection with a condition in the deed of ownership transfer, the new owner will undertake to fulfil the duties of the recreational value trade contract for the remainder of its validity.
If ownership is transferred by other means than in exchange for payment (inheritance, legacy, gift, division) then the recipient party will be bound by the contract unless otherwise determined by law. In these cases the landowner shall include it as a term of the title deed that the new owner is bound by the contract.
2.6. Dissolution of the contract
The contract may be dissolved if the recreational values of he object of the contract have changed in such a way (e.g. as a result of storm- or other natural occurring damage) that there are no longer grounds for the validity of the contract. If the contract is dissolved on these grounds, the landowner will return the amount relating to the remaining share of the price paid to the purchaser.
The landowner may resign immediately from the contract, if the purchaser neglects to pay the agreed sum or breaks other conditions of the contract. Recompenses already paid will not be returned to the purchaser.
The purchaser of the recreational value may resign immediately from the contract if the owner of the object of the contract has, through his operations, knowingly reduced or destroyed the recreational value of the area or has broken other conditions of the contract. The landowner will repay the price determined by the contract in full.
2.7. Disputes
In accordance with the contract, possible cases of dispute will be heard in the lower court holding jurisdiction over the location of the land in question.
On a local level, forestry associations and forest producer’s associations are a natural source of information and assistance for those interested in Recreational Value Trading. Associations will pass information from the prospective purchaser to the landowner, so he may contact the purchaser. They will not, however, give out the landowner’s private details or other information covered by the Data Protection Act to the purchaser.
Forestry associations will also assist the landowner in matters relating to securing the trade and assessing the factors relating to determining the price. The help service provided by associations is subject to a fee.
In meetings between the landowner and the association’s advisor, the situation as well as the landowner’s possible objectives for the object of the recreational value trade will be set out. The forestry association’s advisor will investigate the objectives of the recreational value trade, the usage type of the area and possible tasks to be carried out in the forest. At the landowner’s request he will familiarise himself with the object of the trade’s terrain. After determining the delineation of the object of the trade the advisor will estimate the potential loss of income and costs to the landowner as well as other factors affecting the recreational value trade. The landowner will assess his interests in the recreational value trade and make a decision on the tender price using the estimate of costs from the forestry association.