Conservation Easements

Preserving Farm, Ranch and Timber Lands

A conservation easement is a legal instrument that allows landowners to voluntarily restrict the ways in which a designated parcel of land can be used. These documents establish the future of the said land parcel, which often includes habitat and wildlife management. Conservation easements are an increasingly popular way for private landowners to control the future use of their property and for the public to ensure that privately owned lands are used in publicly desirable ways. Easements can also be held by non-governmental organizations (NGOs) that have a strong interest is preserving wildlife, native plant communities and open spaces.

How Does a Conservation Easement Work

Conservation easements are created through either a voluntary sale or donation from a landowner to a governmental agency or other qualified NGO. The agency or organization that receives the easement obtains the right and obligation to enforce the restrictions on both current and future owners of the property. Typically, the restrictions limit the type and amount of “development” that may occur on the parcel.

The exact nature of these restrictions vary from one conservation easement to another and they are determined within the legal agreement between the landowner and the agency or organization receiving the easement. Since the restrictions within a easement are often in the public’s or NGO’s interest and typically reduce the market value of the property, landowners can receive property, income and estate tax benefits from granting of a conservation easement.

The extent of the tax benefits depends on both the details of the conservation easement and the landowner’s specific circumstances. What happens on the land affects native plant and animal communities.

Requirements of a Conservation Easement

There are no “set” requirements for a conservation easement. However, the conservation (as the name implies) of native plants, animals, soils and/or watershed will be paramount and will vary by property. Often times, lands that contain unique plants or serve as habitat for endangered plants and animals are ideal candidates for conservation. This is especially appealing to the holders of easements, since often public or NGOs have a vested interested in preserving these resources.

As such, a common requirement of a conservation-minded agreement will limit development. For example, houses, buildings, roads and other “improvements” can take place on properties that are covered under easements, but all future activities are agreed to by both parties before documents are finalized. Conservation easements are used to manage land use and protect and improve water resources and habitat. For example, conservation easements may be used to maintain streamside habitat (native plant buffers), to encourage groundwater recharge or to maintain endangered or unique wildlife and habitat, so requirements that accomplish these goals will be in an easement if it makes sense to do so.

Conservation Easements and Tax Deductions

A conservation will decrease the market value of the property because of the limitations placed upon the land. This amount will vary depending on the restrictions. Typically, the amount of the decreased value of the property can be used as a tax deduction by the landowner. It is recommended that landowners get more information about the tax consequences pertaining to any type of easement on their property.

To obtain this type of guidance, landowners should consult with a competent professional, employed by the landowner, and possessing an intimate knowledge of the landowner’s needs, desires and circumstances. This is especially true for landowners who wish to continue to reside or work on or otherwise use the land upon which they are contemplating granting a conservation easement.