Conservation Easements

In an end-of-millennium convolution of historic American "land-rushes," federal agencies and environmentalist organizations are enticing and coercing landowners throughout the nation to convey their private property to the agencies or organizations through "conservation easements." The objective is to reduce private property holdings, and minimize the political and market influence of private property owners. Their tool of trade is a "model" conservation easement agreement which totally deprives the property owner of control over use of the land covered by the "easement."

The very term "conservation easement" is new to American real estate transactions. It refers to a portion of land which a landowner conveys to another party for the purpose of restricting the use of the land in order to serve a "conservation purpose" (usually protection of habitat of a species or protection of a particular "ecosystem" such as a wetland). The landowner may continue to make limited use of the land if such use is specified in the easement agreement, but the third party (or grantee) has authority to limit that use in order to protect the "conservation value" of the land. The interest which is created is not an "easement" in the traditional sense. But, the conveyance is termed a "conservation easement" because that fits with the terminology of IRS regulations which permit a tax deduction when a landowner conveys land for "conservation purpose" with the amount of deduction dependent upon the amount of land control which is lost by the landowner.

What fuels the movement to conservation easements? One primary force is the threat of restrictive government controls. For example, if a landowner has property which contains wetlands or habitat for a species that is being considered for protection, he may be told that he can avoid loss of land use if he conveys to an environmentalist organization an "easement" to that sensitive portion of the property. The landowner is told that, with such easement in place, he can continue to use the sensitive property while the purchaser of the easement will serve only to protect the "conservation" nature of the wetlands or species.

The proposed purchaser of the "easement" describes the advantages to the landowner as follows: the easement will reduce market value of the property so the ad valorem (property) tax will decrease, inheritance taxes will be reduced, the seller will receive a cash payment instead of facing great expense to comply with government restrictions, the seller will benefit from a federal tax deduction, and the seller can continue to use the land covered by the "easement." Faced with imminent government controls of the sensitive property, the landowner accepts the sales pitch and conveys the easement at a price which may be well below the market value of the land. He believes that he has struck a good deal — escaping government control along with attaining the specified benefits.

Only later may the landowner realize that he has, in fact, conveyed all control of a sensitive portion of his property, and that the conveyance has adversely impacted the market value of his entire holding as well as his neighbor’s property. He then may learn that even the promised tax deduction is directly related to loss of control of use of his property.

Decimation of the landowner’s rights is accomplished through use of restrictive terms in the document by which the easement is conveyed. The purchaser will always propose that the landowner use the purchaser’s document in order to avoid legal costs involved with preparation of the conveyance document.

The "model" agreement which has been utilized by an organization very active in these land grabs establishes the agency or organization as the controlling party of the land covered by the "easement," deprives the land owner of control over the land covered by the easement "in perpetuity," i.e., forever, and describes the easement purposes in such generic terms as to permit the easement purchaser to continually expand the restrictions of land use within the easement. For example, the "model" endows the purchaser with the authority to manage activities on the easement and and to protect the "conservation value" of the easement against any encroaching use. So, even though the landowner has reserved the right to farm, graze, cut timber, subdivide or recreate on the easement property, the purchaser, as manager, can define and expand the "conservation value" to a point at which the reserved use is severely restricted or eliminated. Even such activities as crop spraying or livestock crossing may be eliminated. Anyone familiar with the realty market will recognize that such severe restrictions on use will adversely affect even the market value of the landowner’s adjoining property.

Moreover, such severe restrictions can damage a neighbor’s use of his property and decrease the value of his property. For example, if one of the purposes of the easement is to restore wetlands, the management activities may flood the neighbor’s property. If the purchaser of the easement requires an end to crop spraying, the result may be the spread of noxious weeds to the neighbor’s property. Someone will be liable to the neighbor for the damage to his property. The "model" agreement currently in use places the liability not on the controlling purchaser of the easement but on the landowner who is helpless to prevent the damage.

The "conservation easement" conveyed under the "model" agreement curses the rights traditionally linked to ownership of property, and may lead to more vocal curses from the landowner as the reality of the restrictiveness emerges.

But the "curse" can be avoided. The landowner can attain the benefits of possible lowered ad valorem taxes, of lowered inheritance taxes, of some level of tax deduction, of some protection against government regulations, and receipt of a cash payment without losing control over the use of the sensitive area of property. There are land trust organizations which are offering plans by which they will become trustees of sensitive areas of land dedicated by the owner to "conservation purposes" as defined by IRS regulations, leaving vital land use control in the landowner. These organizations have no agenda for gaining control of private property. On the contrary, normally they are interested in protecting and preserving the rights linked to private property ownership.

Such organizations offer agreement formats within which the landowner conveys the land to the organization in order to create a "conservation interest" in his land without conveying all rights in the affected property. The agreement allows the owner to specifically protect many of the traditional rights of ownership by doing the following: (1) define the conservation purpose for which the land will be conveyed, (2) define the specific boundaries of the land to be dedicated to a conservation purpose, (3) define the specific uses of the land which the owner will continue, e.g. farming, ranching, grazing, timber production, subdivision or recreational use, limited only by the requirement that the use be consistent with the conservation value to which the land is dedicated, (4) maintain active management of the land and the continued uses, thus allowing the owner to actively manage the balance between continued uses and the preservation of conservation values in the property, and (5) define the system by which the balance between continued use and preservation of conservation values will be monitored and evaluated, thus assuring that the monitor will not be biased in favor of non-use and against continued use of the property.

The prudent landowner will not execute a conservation easement conveyance proposed by a governmental agency or environmentalist organization without seeking competent legal advice, or without comparing the terms of the proposed agreement with the terms offered by organizations interested in preserving private property holdings in America. Once an agreement is signed, it will be too late to seek advice or compare terms. The landowner who believes that it is in his best interest to dedicate land to a "conservation purpose" should seek assistance from the organizations interested in protecting private property rights—and those organizations do not include the federal agencies and environmentalist organizations working hand-in-hand with the federal agencies.