A conservation easement is an important tool to conserve, preserve and protect environmental assets and natural and man-made resources, the preservation of open spaces, agricultural and forest lands, lands which are significant because of their scenic, natural beauty, wetland, shoreline, geological or ecological character, or their historical, archaeological, architectural or cultural amenities. The ability for land owners to protect their land for posterity without giving up ownership has significant appeal and potential tax benefits. The value of the easement (calculated as the difference between two appraised values: the value of the land at current market price; and the value of the land with an easement that prohibits development) is a charitable donation. At the discretion of your town assessor, town taxes may also be lowered as the assessed value of your property is lowered.
In addition to the private benefits, New York State has declared the use of conservation easements to be fundamental to the maintenance, enhancement and improvement of recreational opportunities, tourism, community attractiveness, balanced economic growth and the quality of life in all areas of the State and has embodied this in the Environmental Conservation Law Article 49, our State’s conservation easement statute.
The statute provides, in part, that “a “conservation easement” is an easement, covenant, restriction or other interest in real property, ***, which limits or restricts development, management or use of such real property for the purpose of preserving or maintaining the scenic, open, historic, archaeological, architectural, or natural condition, character, significance or amenities of the real property ***.” (ECL Section 49-0303(1)).
A landowner can enter into a conservation easement with a government entity or a publicly supported, tax exempt not-for-profit organization, qualified under Section 501 (c) (3) and 170 (h) of the Internal Revenue Code whose primary purpose is the preservation, protection or enhancement of land in its natural, scenic, historical, agricultural, forested and/or open space condition. However since the purpose of the restriction of future activities on the land is to protect its identified conservation values only land with identifiable conservation values can be the subject of a conservation easement. Not every piece of property is entitled to this protection. The statute also limits the purpose of a conservation easement to specified conservation purposes which benefit the public such as: preserving natural, scenic or open-space values of real property; protecting natural resources; maintaining or enhancing the quality of the air or water quality; preserving architectural, archaeological or cultural aspects of real property; and assuring the property’s availability for agricultural, forest, recreational or open space use. Note that public benefit does not mean there is a right of access by the general public to any portion of the premises.
The idea that a landowner can convey certain rights on his or her land while retaining other rights has been with us for hundreds of years of common law. Essentially, both under common law and ECL Article 49, a conservation easement creates an interest in land and is a contract that must be negotiated by the parties and individually tailored to the specific property, identify the conservation values being protected, allow only uses and permitted rights that are not inconsistent with the conservation purposes and which will not significantly impair the protected conservation values, and avoid restrictions and permitted rights that are difficult to monitor and enforce.
The specific conservation values of the property are typically documented in a baseline inventory of relevant features, which consists of reports, maps, photos and other documentation that the parties agree provide, collectively, an accurate representation of the Property at the time and which is intended to serve as an objective information baseline for future monitoring of compliance with the terms of the easement.
To accomplish the purpose of the easement, the following rights are typically conveyed to the Grantee in perpetuity:
- to preserve and protect the conservation values of the premises;
- to enter upon the premises at reasonable times in order to monitor compliance with and otherwise enforce the terms of the easement;
- to prevent any activity on or use of the premises that is inconsistent with the purpose of the easement and to require the restoration of such areas or features of the premises that may be damaged by any inconsistent activity or use.
Any activity or use on, over or under of the premises inconsistent with the purpose of the easement is prohibited. Typical restrictions require that all development and building rights associated with the protected property, other than those which may be expressly reserved, are extinguished.
Annual monitoring of the easement is normally required and is essential to a successful enforcement effort should that be required.
Typically, Grantors reserve all rights accruing from the ownership of the premises subject to the terms of the easement. On larger tracts, we frequently see the reservation of specific rights to manage and improve the land, fauna, and vegetation by forestry, conservation and landscaping practices, including timber harvests, pursuant to a forestry plan prepared by a Department of Environmental Conservation Certified Forester, and planting, cultivation, trimming and removal of grass, trees, shrubs and flowers for the purposes of forest stewardship, control of invasive species, enhancement of native species, and of enhancing the conservation values of the protected property.
Grantors retain all responsibilities and bear all costs and liabilities of any kind related to the ownership, operation, upkeep and maintenance of the premises, including the maintenance of adequate comprehensive general liability insurance coverage.
Given the fact that the conservation easement is intended to last in perpetuity, careful negotiation and drafting are obviously essential. Many cases have shown that a poorly worded easement is both costly and difficult to enforce.