A conservation easement is a voluntary agreement that allows a landowner to limit the type or amount of development on their property while retaining private ownership of the land.
The easement is signed by the landowner and the state agency receiving the easement. The state agency accepts the easement with understanding that it must enforce the terms of the easement in perpetuity. After the easement is signed, it is recorded with the County Register of Deeds and applies to all future owners of the land.
People grant conservation easements because they want to protect their property from unwanted development, but they also wish to retain ownership of their land. By granting a conservation easement, a landowner can assure that the property will be protected forever regardless of who owns the land in the future.
An additional benefit of granting a conservation easement is that the donation of an easement may provide significant financial advantage to the donor.
Many landowners receive a federal income tax deduction for the gift of a conservation easement. The Internal Revenue Service allows a deduction if the easement is perpetual and donated “exclusively for conservation purposes.” The amount of the tax deduction is determined by the value of the conservation easement. In addition, the donor may have estate and property tax relief.
The activities allowed by a conservation easement depend on the landowner’s wishes and the characteristics of the property. In some instances, no further development is allowed on the land. In other circumstances, some additional development is allowed, but the amount and type of development is less than would otherwise be allowed.
Conservation easements may be designed to cover all or only a portion of a property. Every easement is unique and tailored to a particular landowner’s goals for their land.
The landowner continues to own the property after executing an easement. Therefore, the owner can sell, give away or lease the property as before. However, all future owners assume ownership of the property subject to the conditions of the easement.
The public does not have access to property protected by an easement unless the original landowner who grants the easement specifically allows it.
To be eligible for a federal income tax deduction the easement must be “perpetual,” that is, it must last forever. When the Division of Parks and Recreation accepts an easement, for example, State Parks staff monitor the property, generally once a year, to assure that the easement is not being violated. If the easement has been breached, State Parks will take whatever steps are necessary to uphold the terms of the easement, including taking legal action.
Because of this obligation State Parks asks all easement donors to make a financial contribution to the State Parks Endowment Fund. This fund ensures long-term monitoring and enforcement of every easement the State Parks receives; however, is not a mandatory part of a donated Conservation Easement.
The landowner retains full rights to control and manage their property within the limits of the easement. The landowner continues to bear all costs and liabilities related to ownership and maintenance of the property. State Parks monitors the property to ensure compliance with the easement’s terms, but it has no other management responsibilities and exercises no direct control over other activities on the land.
No, some easements only cover a portion of the landowner’s property. Again, it depends on the landowner’s wishes. For example, if someone owns 80 acres, of which 35 acres are set aside for future development, the landowner may decide to restrict development only on the remaining 45 acres. However, the appraised value of the conservation easement decreases when rights are reserved and is considerably higher when the easement is more restrictive.
IRS regulations require that the property have “significant” conservation values. This includes forests, wetlands, endangered species habitat, beaches, scenic areas and more. Each agency has its own criteria.