Corporate Tree Work Liability Concerns and Overall Budget

6 Replies

I work for a large tree company that works on a National Scale in the Corporate realm.  

The question I have is this:  

I am finding that many investment companies are willing to accept a large amount of liability with tree issues due to "annual planned budget per location" over clearing out the issues and tapping into the larger money pool of the investment company.  In my opinion it is such a risk to leave even the small issues in regards to trees because the tree isn't "dead" or "dying".  I understand budget is different per location an investment company owns, but wouldn't it make more sense to rid the overall investment company of almost all liability than dance with disaster? 

I guess in plain words: Why are companies willing to risk a liability like this?

It largely comes down to perspective I think. You're looking at this from the outside in and seeing a site and its exposure to the liability from tree issues and saying 'If you just spend XXX, it eliminates 95% of the exposure to YYY  claim'. They are looking from the inside out at exposure to trees, ADA, trip and fall, wind storm, hail, lighting, bed bugs, dog bites, eviction....so the cost to eliminate the exposure for the product you are selling is maybe small to you, but to them there are a dozen similar concerns. Ultimately the budgeting for those issues comes down to some form of an actuarial, what is the total exposure and how likely is it that we experience that loss this year specifically. 

There is also a declining return as they spend more. If I pay $5K for tree work that likely prevented a limb falling and causing $5K in damage, that was a 1:1 return on my 'investment'. However once I've made those 'repairs' and now you're spending $10K on the limbs that are likely going to only cause $5K in damage sometime in the next 5 years...that is at best a 2:1 return...maybe within 5 years so discounted even further. I realize no one is likely crunching the numbers that way (myself included) but that is exactly my thought process when I'm looking at a biggish expense...is it worth it today more than it is in the next XX years/months/days... 

I understand where you're going with this but the ratio in your example is minimal.  It is not always a 1:1 ratio on cost.  For example take Cedar Rapids Iowa where a majority of the communities took a minimal approach to tree work, now the entire city a year after the bad storm is dealing with a huge amount of loss of capital to clean up debris and damaged homes/roofs which aren't always a small ticket item.  In that case if those properties just took care of all those issues from the get go, they would have less expenditure for all the damages and clean up from the storm.  Again your example was correct as there are some times small limbs that might fall and damage a roof, but there is also the chance of a storm knocking a whole tree on a home which is a whole different story. Just like in the case of the entire city of Cedar Rapids!!!! That is kind of what I'm talking about.  Most properties there decided to take the risk of leaving the trees and then came the storm.  

Originally posted by @Mike Knab :

I work for a large tree company that works on a National Scale in the Corporate realm.  

The question I have is this:  

I am finding that many investment companies are willing to accept a large amount of liability with tree issues due to "annual planned budget per location" over clearing out the issues and tapping into the larger money pool of the investment company.  In my opinion it is such a risk to leave even the small issues in regards to trees because the tree isn't "dead" or "dying".  I understand budget is different per location an investment company owns, but wouldn't it make more sense to rid the overall investment company of almost all liability than dance with disaster? 

I guess in plain words: Why are companies willing to risk a liability like this?

Hi Mike,

A while back I spoke with a young lady renter, and I asked her what made her choose this apartment complex to live in.

She thought for a moment and said "the big mature trees" "I like the big trees, the shade and privacy they provide".

I asked her was there anything else, she said "No, many other places were similar but this one had the big trees".

I'm not saying every place has to have big trees. Personally I like no trees (or palm trees in the palm areas), but if they are there, it's a sales point for some people (meaning it's where they will choose to make their home).

Give the customer what they want and they will give you the money!

Just my 2 cents.

 

I agree as I like trees a lot hence my profession!  If they are not a liability and healthy I say keep them.  Unfortunately that is not why I post this.  I am strictly talking about those that could damage a home or fall and harm someone.  If the tree is a liability, the business cannot afford to keep it because a client "loves the tree".

Oh, I understand, you come onto large property for instance, and look for trees that are troublesome, then go to the manager and say you can cut those trees down (or trim them) for $X...But many say they don't have it in their budget to pay for this.

The budget answer is real. Large complexes run on a tight budget (or try to--depending on the management).

if the danger is super obvious the management company might advise the owner to have the problem solved, but you might want to come in earlier in the game with your tree observations.

If you point these tree issues out to potential buyers during the buyers inspection process (when buyers typically develop budgets) you might have more luck.

But from an owners perspective--there is always insurance (IF) tree damage occurs above a certain dollar figure worth turning it in for insurance. Else a check will be written by the owner for the damage.

But if the insurance company specs a tree must come down for a policy then that goes into the budget for sure, and they do send inspectors out to properties from time to time to look at them for all sorts of things.

Just my 2 cents.

yes there is insurance, but more to be proactive rather than reactive.  Best not to wait for a tree to fall and ruin someone's home and hope insurance will cover it.  Plus the chance that premiums a can go up after such an incident that could have been prevented had they took that tree down?!  Not to mention if the home owner had mentioned said tree in writing via emails or a letter.  Again too much liability to just ignore the signs in my opinion.