About conservation easements
A conservation easement is a voluntary legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values.
One way to visualize a conservation easement is to think of land ownership as owning a bundle of sticks. Each stick represents a landowner’s rights or interests in his or her property. The right to sell, lease, mortgage, farm, harvest timber, or develop a property are all rights that landowners may possess. Landowners give up certain rights, or sticks from the bundle, associated with their property through a conservation easement (such as development rights) while retaining the underlying ownership of the property (right to sell).
The land use restrictions in a conservation easement usually limit future development and the number of home sites. Easement restrictions can, and often do, limit other uses as well depending on the landowner’s wishes. Future commercial timber cutting, mining, and significant commercial uses may be prohibited. Conservation easements may be donated in full, donated in part with a portion of the value purchased, or purchased at the fair market value.
Conservation easements are perpetual
All easements accepted by LPLC “run with the land,” committing the original owner and all subsequent owners to the easement’s provisions. In doing so, the terms of the easement apply to all present and future owners of the land. The easement is recorded in the respective county clerk’s office, becoming part of the public record and the chain of title to the property.
Rights and responsibilities retained by the landowner
Easements are tailored to protect the specific conservation values of a property. In all easements, the landowner retains all other rights over the property not specifically restricted or conditioned by the easement, including the right to sell, lease, transfer or mortgage the property. In retaining ownership and control, the landowner remains responsible for all maintenance and liability issues.
Qualified conservation easements
The Internal Revenue Code allows for tax deductions for donations of easements in five resource categories:
- Public recreation and /or public education
- Significant natural habitat
- Open space for scenic enjoyment (includes farmland and forest lands)
- Open Space pursuant to local governmental policy (includes farmland and forest lands)
- Historic preservation
Internal Revenue Code (IRC) 170(h) is the federal law that sets forth the requirements a conservation must meet to qualify for federal income and estate tax deductions. LPLC works primarily with landowners who may qualify for open space and/or habitat easements.