What is a conservation easement?

A conservation easement is a popular and effective way for landowners to preserve the natural beauty of their property. It is a legal agreement to restrict some of the uses or development that may take place on a property. A conservation easement is perpetual (the restrictions remain in effect even though ownership changes). Generally, easements limit or prohibit subdivision of a property, commercial and industrial activity, and any activities that might disturb wildlife habitat.

Working together, the landowner and the land trust identify appropriate uses for the land and detail activities that should be prohibited. Prior to preparing a conservation easement, the land trust conducts an evaluation of the property to determine the conservation values, the desires of the owners, and the feasibility of preserving the natural attributes of the property.

The terms of the easement are recorded in a deed, and the land trust assumes responsibility for monitoring the property to preserve its natural values.

What rights does a property owner retain?

The current owners retain all rights of ownership not transferred to the land trust. The conservation easement does not restrict the owners' right to sell the property or leave it to their heirs in a will or trust. However, the new owners are bound to recognize and honor the original restrictions placed on the use of the land.

The landowner decides whether to allow public access. If a landowner permits public access, it is usually only for a specific area of the property.

What does a land trust do?

As the easement holder, the land trust prepares a plan for the stewardship of the property, implements any restoration and enhancement aspects of the plan, supervises any public uses of the property, and monitors the property to ensure that it is adequately protected.

A stewardship fund is created in conjunction with the acceptance of each conservation easement. It is used exclusively for that property to cover future expenses of restoration, monitoring, enforcing compliance with easement restrictions, and underwriting legal defense of the easement protections.

When necessary, the land trust takes appropriate action to enforce the terms and conditions of the easement by mediation, arbitration or legal action.

Are there tax benefits from granting a conservation easement?

Conservation easements qualify as charitable deductions from income taxes, if certain IRS rules and criteria are satisfied.

To be deductible, an easement must serve conservation purposes by preserving natural habitat, historic sites, unique scenic landscapes, wildlife corridors or connections to other protected parcels, areas of concern for public education or recreation, or open spaces in the vicinity of intense land development. To qualify as a charitable gift, donation of use or development rights through a conservation easement must be granted in perpetuity to a qualified conservation organization.

The gift value, determined by a qualified appraiser hired by the landowner, is the difference between the fair market value of the property before and after the easement is donated.

If tax reduction is an important consideration, the land trust strongly recommends that the landowner consult with a tax advisor before proceeding with an easement.