When is a conservation easement too much?
Dec 01, 2009 
9 Comments
I saw a Virginia real-estate ad for several hundred acres of mixed timber and open land recently, priced at $875/acre. It caught my attention for several reasons. First, it was priced below asking prices for similar properties, way below. Second, the ad included language about “mature timber.” Third, it was in a reasonably desirable area.
I emailed a request for more information.
The broker faxed me materials related to the property’s features, boundaries, topography, deed and a…conservation easement.
I read through the 12-page easement.
The seller’s easement had stripped out almost all of the land’s intrinsic (economic) value. The woods could not be “commercially harvested” under any circumstances. This included salvage sales in the event of a hurricane or gypsy-moth mortality; firewood sales from broken trees or single blow downs; sale of timber that could arise from a power-line easement being forced on the landowner; or sale of timber from improving wildlife forage opportunities. Trees could not be cut to control fire on the property. It appeared to me that the easement prohibited the owner from paying a caretaker/watchman in downed firewood, since that arrangement could be converted into dollars and, hence, amount to a commercial sale.
The easement did not prohibit having a chainsaw on the property, but it essentially eliminated its use for anything other than gathering personal firewood. It was questionable whether an owner could use a chainsaw to remove downed trees over the property’s interior roads, even though removal would facilitate low-impact recreation like hiking and bird-watching, not to mention making the property safer in terms of fire suppression and emergency rescue.
The easement allowed one division of the property. It also allowed one small house to be erected on one — but not both — of the parcels. It did not say whether a utility easement could be cut through the woods for an overhead line. It did not say whether trees taken down to develop a new road or power-line easement could be sold. It did not say whether a new road or power line could be installed at all. The easement neither authorized a sale of road/utility easement timber nor prohibited it. In that event, the conservation organization that held this easement in perpetuity would make the call in the spirit and text of the easement as a whole. I’d interpret that as a future NO.
All commercial uses of the property were prohibited, including agriculture of any kind. The owner could not sell a mushroom or ginseng root. He could not plant an organic herb garden on 100 square feet and sell the herbs He could not lease the stream for fishing or the trails for horseback riding. Hunting, of course, was also prohibited.
The seller undoubtedly believed that he had conserved the property forever as he saw it in 2005. Easements can’t stop the inevitable changes in land that work sometimes for the better, but sometimes for the worse. An easement doesn’t lock land in a time capsule.
The seller had burdened the land with over-the-top use prohibitions and taken the maximum amount of easement tax benefit against his then-current income. Maybe it made sense to him when he did it, but I expect he might have second and third thoughts about it today.
I heard that he had tried marketing the property at about $1,750/a, then dropped the price in painful steps down to $875. I might have been a buyer at $100/a, but I would have stretched my judgment to get even there.
This seller had, in my opinion, taken a preservation-type conservation easement beyond where it needed to be to preserve the environmental health and integrity of his property. The seller bought into the idea that if some restrictions are good, a ton of them are better. Proof of this proposition is debatable.
A less restrictive easement would have retained considerably more sale value in the dirt.
If you’re planning to sell land, I advise that you be very careful in designing a conservation easement. Balancing your short-term tax benefits, environmental values and sale expectations is the goal. Imbalance brings its own penalties.
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Conservation easements are necessary to provide for the long-term health of the environment. It may be in the best interest of the owner to sell the property outright to a conservation group, a local or county government, the state government, or someone else who sees the intrinsic value of the land.
I don’t disagree with the idea that conservation easements protect environmental values.
On the other hand, I don’t believe that every square inch of open space should be
placed in a conservation easement.
The point of this column is simple: Easements that bascially prohibit all commercial uses and most other uses of land may have their own environmental costs and may also not strike the right balance from the landowner’s perspective between protection, use, income, inheritance, estate liquidity and so on.
Why buy the land when you can walk thru many state parks and private forrests for free?
“Why buy the land”
Right of exclusion – you can walk thru your land and you can prohibit others from doing so… on the other hand, I wouldn’t pay much for that right alone.
Dont be blind and think you can moniter who walks on several hundred acres undetected. It is next to imposible to say for sure where a gunshot came from on land area’s over one hundred acres. People do not respect no trespassing signs and there are not enough game wardens to go around.
This case is proof how the idea of conservation is a wolf in a sheepskin or more bluntly defined as communism (this words means common=for all) in an environmental skin.
With my 46 years landowner experience,I can understand that owner’s despair not being able to sell his land because of the multiple environmental restrictions and obligations. Opposition to landownership comes from the press,public opinion,town councils,neighbors,you name it or try to find one who is in favor of private landownership.Karl Marx advocated to take property outright.The environmentalists use the salami technique to make landownership a burden with all kinds of brain washed opinion polls to have the public vote for so much restrictive regulations and obligations to leave the only one way out to this landowner:An environmental easement for an apple and an egg.
My personal experience is an easement put on my property without legal due process.My protest remains unanswered.and I still have the right to go to Court and everybody knows how much that will cost and how manny years that takes.An other way is ignoring the legal process…
Is there anybody who cares ?.
Godert H.van Diermen.
Great article. I have clients who have looked into these easements for the tax advantages. I can use this as an example of how they should not get carried away with the restrictions.
Land donated to Wildlife Land Trust (www.wlt.org) through a will or donation without proper easement filing can be sold at their discretion. They set this up by having the owner fill out a wish list. Unless the owner actually gets a lawyer and files the easment/restrictions, then “allow us to sell or trade it in order to acquire other land with more suitable sanctuary characteristics”.
Translation: I can trade your land valued at $25000 per Acre for my buddies land valued at $500 an acre (probably due to his stupidity for encumbering the land in perpetuity)
Their finacial statement does not list where all of the profit goes (the great big green wedge that is larger than all of the expenses.)
They have banks of lawyers you and your heirs will be left holding the property tax bag.
Appraisers can value the property and ignore the easement. It is a good way to lose control of what you hold dear.
This is not conservation, this is elimination of property rights. Conservation is management of the land, keeping it and the wildlife healthy. Should your wildlife get infected with Chronic Wasting Disease (very contagious), you can’t even put them out of their misery.
Learning from history.
When Lenin told the Russians that factories,farms,buildings,etc. belonged to the people who did not own it,in short destroying property rights, he got a massive support and created 70 years of missery for his creation of the Soviet Union.
When the environmentalists brainwash the people that they can own open space,which they do not own, with voting for restrictive laws and regulating commissions,they are destroying property rights.
Lenin had the advantage of the turmoil of Russia’s defeat in WW1 which the environmentalists do not have.They use the salami technique,Little bit at the time and every time some more laws and restrictions but nobody realizes that the philosophy of voting for destroying property rights, once accepted, will not stop at open space.
It is a simple question of learning from history, even from foreign countries.