What’s an easement? Part II

Four types of easements are not agreed to: easement by necessity, easement by implication, easement by prescription and easement by condemnation.

1. An easement by necessity prevents certain properties from being landlocked, that is, cut off from a public road. If I were to sell 50 acres at the back of my 100-acre tract and provided no access easement to the buyer, he could get a court to grant him an access easement for a road over me by necessity so that he could reach his 50 acres. The buyer in this example should be aware that the court may not award him the location for a right of way that he wants. Easement by necessity may also be used to gain access to a water source in certain circumstances.

To gain an easement by necessity, the landlocked party must prove that his parcel was once part of the parcel that he wants to cross. In Virginia, at least, property can be landlocked if this cannot be proved in court. Read more

What’s an easement? Part I

Easements are commonly found in real estate. In general terms, an easement is an arrangement whereby a non-owner of a property has the legal right either to use that property or limit its use in some specified, special way.

The non-owner who holds the easement can be another parcel of land, public agency, utility, individual, business entity or a non-profit organization like a land trust.

A positive or affirmative easement would allow me to use a stream on my neighbor’s property for watering my livestock at a certain spot. A negative or restrictive easement held by my neighbor would prevent me from erecting a line of wind turbines that would ruin his view.

Easements are legally binding agreements, but they may or may not be recorded. Read more

Conservation easement and property taxes

Conservation easements (CEs) provide a break for their donors on local, state, federal and estate taxes.

What has been the experience of LandThink visitors with reductions (or lack thereof) in local property tax once a CE has been put in place?

CEs donate one or more rights in a property to a land trust or similar organization. This is done to conserve some environmental value–keeping land open or in agriculture, limiting or prohibiting development, protect habitat, etc. The donated right has a monetary value.

Are land owners with CEs getting their properties reduced in subsequent tax assessments to reflect the donation? Are there standard formulas? Are donors being treated fairly?

If your land is enrolled in agricultural land use or in a managed timberland program (both of which reduce property taxes), are CE lands getting an additional local property tax break?

What are your thoughts?

Conservation Easements: the Essence of Landowner’s Property Rights

The pathway to conservation easements is not always a straight line but, more often than not, is worth the trip. [Dean Saunders, ALC]

Conservation easements are powerful, effective tools available to landowners for the permanent conservation of private lands in the United States. The use of conservation easement options has successfully protected millions of acres of wildlife habitat and open space, keeping land in private hands and generating significant public benefits.

The primary purpose of a conservation easement is to give a landowner the right to protect his land from certain types of development or land use. This opportunity appeals to property owners who hold undeveloped land that is agricultural and/or has timberland, wildlife habitats, natural open space, and those with natural resources. Simply, a conservation easement is a restriction on the use of property similar to a deed restriction. It is recorded in public records and generally is in perpetuity. The government receives assurance that this valuable land will be protected from future development. Read more

The implications of a conservation easement

I talked with an old friend last week about selling a large New England farm that’s been in his family since the 1930s. The farm is in a pretty setting, at the foot of publicly owned mountains. Land prices have risen dramatically during the last 15 years, driven by second-home buyers and retirees from southern New England and, primarily, the Boston area.

Of the 300 or so acres, about one-third has been used for cattle grazing and haying. This area is bounded on two sides by state-maintained highway. It is flat. It’s not particularly productive dirt, but it has dramatic views, easy access and many potential lots. The rest of the ground is a mix of woods and wetlands, which is not suitable for much of anything except recreation.

My friend placed the agricultural field in a conservation easement that prohibits any use other than agricultural. Not a single house is permitted to be built in perpetuity. He did this with the best of intentions some years ago. His health has changed for the worse as he’s gotten older. His income is limited. The farm is his major asset, and most of its value was in the 100 acres of field.

Without this easement, a developer might pay $10,000/acre for the right to divide it into five to ten second-home lots. With the easement in place that keeps this marginal farmland as marginal farmland, the price might be $1,000/acre on a really good day for the seller. My friend’s life would be a lot more comfortable going forward with $900,000 more in gross sale revenue. Of course, sale to a developer means five to ten newly built second homes where hay once grew.

At the time he placed this easement on his land, he wanted to preserve the 100 acres as open space and keep it in agricultural uses. He got tax benefits for the easement. Now he needs the money. Now he’s stuck with the personal consequences of what I would consider a questionable choice.

Many good reasons exist to place conservation easements on property. Owners, however, must consider the long-term consequences for themselves and their heirs of prohibiting all development forever.

Had my friend allowed one residence to be built on the 100 acres, the value of the easement would have been marginally reduced. But he would have been able to sell the property in his time of need for maybe $7,500/acre or more. The land would have still been kept primarily agricultural and open.

I have seen other cases where economic fortunes have turned against a landowner whose last asset was land–burdened with a conservation easement. The surviving spouse and the heirs received substantially less inheritance than the calculation at the time when the easement was donated.

I’m interested to hear from advocates on both sides of this question.

Conservation easements on land need to be thought through

About 10.6 million privately owned acres — an area about twice the size of Connecticut — now carry conservation easements.  This land base is growing by more than one million acres annually.

Almost 30 million more acres have been conserved through sale, acquisition by government agencies and other means, according to Russell Shay, Director of Public Policy at the Land Trust Alliance in Washington, D.C.

Conservation easements enable landowners — individuals and corporations –  to donate one or more rights in environmentally important land to a government agency or tax-exempt, charitable organization like a land trust. In return, landowners preserve the look or current uses of their properties and enjoy substantial local, state and federal tax benefits. Read more