Courtesy of New England Forestry Foundation
I. GENERAL INFORMATION
What is a Conservation Easement/Restriction?
A conservation easement (or restriction, as it is called in Massachusetts) is a legal agreement between a landowner (the grantor) and a private conservation organization or public agency (the grantee or holder). The agreement separates the rights to exercise more intensive uses – such as constructing buildings, subdivision, and mining – from other rights of ownership such as recreation, farming, and forestry uses. The “development rights” are then transferred to the grantee through the conservation easement deed. The grantee agrees to hold, but not use, the development rights and to ensure that they are not used by anyone else; effectively, the development rights are extinguished. Conservation easements are granted in perpetuity and apply to the land regardless of who may own it in the future.
On what land or portions of my land will a conservation easement be placed?
Often it is preferable to protect the entire woodlot or farm, as the case may be. If the property includes a residence, farm buildings, and other structures, it is best to exclude those areas from the easement, so that the landowner is free to exercise the rights to repair, improve, or replace existing structures on the property outside the confines of the easement. In some circumstances, it may make sense for the landowner to exclude some portion of the property for future house lots to convey to family members or as a financial contingency. The location of an excluded area is determined jointly by the landowner and the easement holder, and should not detract from the overall conservation objectives for protecting the property. Sometimes a boundary survey is required to create a property description for the excluded area(s).
How long does the easement last?
Conservation easements are granted in perpetuity and apply to the land regardless of who may own it in the future.
What are my responsibilities as a landowner when my land is under easement?
Once a conservation easement is granted, it is the landowner’s responsibility to comply with the terms as spelled out in the easement document. Because each easement can be tailored to reflect a property’s natural resources and to meet the grantor’s conservation goals, the terms may vary somewhat between easements. Generally, the landowner can continue to farm, actively manage a woodland, and recreate on the property unless those uses are prohibited.
Can easements be tailored to meet my needs, or are they all the same?
Conservation easements are not identical and can be tailored to the goals and interests of each landowner. Decisions about the terms of the easement are made jointly by the grantor and the grantee. Some landowners might want to place a “forever wild” conservation easement that prohibits future farming or forest management, while others prefer to be active stewards.
How should I decide who holds the easement? What are the holder’s responsibilities?
Once a landowner decides to protect a property with a conservation easement, he or she needs to determine what organization should be the holder. In some areas of the country, there could be multiple potential holders, so the landowner might want to talk to representatives of more than one organization and select the one that aligns best with his or her goals for conserving the property.
The holder is responsible for working with the landowner to settle on the terms of the easement, to monitor the easement for compliance, and to take steps to enforce the easement in the event of a violation.
II. PROPERTY RIGHTS
How does the conservation easement affect my property rights?
Landowners still hold title to their property and enjoy all the rights of ownership, such as the right to sell orlease the land, to leave it to their heirs, to control public access, to have privacy, and so forth. The easement is perpetual and is binding on future owners. Under the terms of a conservation easement, the property cannot be used in a manner that impairs the actual or potential use of the property as forestland, farmland or open space.. NEFF encourages good land stewardship and the terms of our easements provide for a “Best Management Practices” standard and guidelines for sustainable forest management. NEFF does not dictate specific forest management prescriptions to the landowner, but when working with another organization, landowners should be sure to ask how the organization handles forest management activities.
What if I don’t want the public to have access to my land – can I still put it under easement?
As a general rule, public access is not a requirement. Landowners are able to choose whether or not they wish to allow public access to their land when they place it under easement. However, if public funding is used to conserve a property, use of those funds might requirethat public access to the property be allowed.
Will conserving my land make me unable to sell it or to will it to my heirs?
No. A conservation easement does not affect your ability to sell or will your land in any way, though the easement will prevent development of the land and thus could lower its marketable value. However, the terms of the easement will apply to the land regardless of who may own it in the future.
How does a conservation easement affect the local property tax paid on the property?
Different states have different rules on the assessment of property encumbered by a conservation easement, but as a general rule, the assessed value of easement-encumbered land will be based on its open space, forest, and/or agricultural value. If the property is enrolled in a “current use” taxation program, the easement does not affect program enrollment and the property taxes are likely to stay the same. If the property is not enrolled in such a program, then the property tax could be lowered significantly once the easement is placed on the property since the property no longer is developable.
To learn more about current use taxation programs, visit our Woodland Landowner Resources page
IV. LEGAL CONCERNS, APPRAISALS, AND MORTGAGES
Do I need a lawyer if I want to place a conservation easement on my property?
Yes. We advise that landowners secure qualified legal counsel to assist them in the decision-making process and to review legal documents. Placing a conservation easement on your property can have significant land use, income tax, and estate planning consequences and such a decision should be made with the advice of competent legal counsel.
Do I need a title report for my property?
Yes. An updated title report is a prerequisite to placing an easement on the property, and it is important to get a title report early in the process in order to avoid complications and delays later. This is an expense borne by the landowner.
Does a conservation easement on my property affect my borrowing power?
Not necessarily. The property still may have significant value when encumbered by a conservation easement. The easement itself does not restrict the ability to use the property as collateral for borrowing.
Who obtains the appraisal to determine the value of the conservation easement for tax purposes? How is the value determined?
An appraisal prepared by a qualified appraiser is required to claim a tax deduction for a donated easement. IRS regulations state that the landowner is responsible for securing and paying the cost of the appraisal, but some organizations – including NEFF — can assist the landowner in identifying and selecting an experienced appraiser. The value of the conservation easement is the difference between the fair market value of the property before placement of the easement and the market value of the property after the easement is in place. This is called the “before and after” approach to valuation. The “after” value typically reflects the forest, agricultural, and/or recreational value of the property.
Is a mortgage on my property affected by a conservation easement?
Yes. Any mortgage, deed of trust, or other monetary lien on the property must be discharged or, if that is not possible, subordinated to the easement. In the case of subordination, it is advisable to talk to your lender well in advance of placing an easement on the property to determine what, if any, requirements the lender may have. The organization with which you work – including NEFF – often can help landowners in these discussions with their lender.
V. LOCAL ZONING AND BY-LAWS
Does a conservation easement affect state or local by-laws or zoning regulations?
No. State and local land-use regulations still will apply to the property. Any zoning regulations, building codes, subdivision rules, setback requirements, and health and safety regulations still apply to property under a conservation easement.
VI. MONITORING AND REPORTS
What is a Property Baseline Report?
At the time the easement is placed on the property, a baseline documentation report is prepared with maps, photos, and other materials that document the condition of the property. Both the grantor and the grantee keep a copy of the document. The report then serves as a baseline to determine changes that occur over time.
What is the monitoring process and how do I ensure my privacy is maintained?
Like most grantees, NEFF strives to visit each of its easement-protected properties once every year to make sure that there has been no activity that is prohibited by the terms of the easement. These monitoring visits are intended to be friendly and informative, and they provide an opportunity to exchange information or to answer questions the landowner may have about the easement or the property. Advance notice for each visit is given and the landowner is encouraged to participate. The visits usually involve walking through portions of the property, taking photographs, and filling out a questionnaire. NEFF maintains communication with the landowner by mail, phone, e-mail, and through its newsletter.
VII. WORKING WITH NEFF
What land qualifies for consideration by NEFF for a Conservation Easement?
NEFF is interested in protecting properties with productive, actively managed forestland and other environmental resources. We give priority to areas where state and local initiatives are focused on protecting forested land. Such an area could be part of a county- or town-wide conservation project involving multiple landowners, a productive river valley, a public water supply watershed, or a unique forest region. NEFF often works in partnership with state or local conservation organizations. In cases where NEFF cannot assist individual landowners, NEFF helps landowners make connections with other conservation groups.
What is a Conservation Easement Stewardship Endowment and how is the amount determined?
Most easement holders encourage a donation to a stewardship endowment fund for each conservation easement it acquires. A conservation easement is a perpetual obligation and responsibility for the holder, and it is important that funds be available to ensure that the holder has the financial means to fulfill the landowner’s goal of protecting the property. The endowment is a fund held in a restricted-purpose account. At NEFF, income from the endowment is used to defray the annual cost of monitoring the conservation easement. The stewardship endowment also serves as a reserve in case extraordinary legal or other expenses are required to defend and enforce the easement. Stewardship endowments at NEFF typically range from $4,000 to $8,000for each conservation easement. Complex easements may require additional funds. NEFF is flexible about how stewardship endowments are contributed. They can be paid in installments, through a bequest, through a modest assessment if the land is sold in the future, or by donating the timber rights, or a portion of them, to NEFF. If the landowner donates timber rights, NEFF provides forest management services to the landowner.
VIII. NEXT STEPS
I have decided I want to proceed further with a conservation easement for my property. What are the next steps?
If you would like to explore your conservation options with NEFF, please give us a call at (978) 952-6856 and ask to speak with the Director of Land Protection. We will set up an appointment to meet you at your property and to discuss the process for moving forward.
If you are interested in conserving your land with another organization, contact its land protection department to determine the process. If you are not familiar with your local land trust, visit the Land Trust Alliance and click on the left hand side under “Land Trusts” and then “Find a Land Trust.” The tool will help you identify national, state, or local organizations in your area.