Frequently Asked Questions
What is a conservation easement?
What are the benefits of a conservation easement?
What kind of land can be protected by a conservation easement?
Who can grant a conservation easement?
Who can hold a conservation easement?
What are a conservation easement holder's responsibilities?
How restrictive is a conservation easement?
Does a conservation easement require public access?
How long does a conservation easement last?
What is a conservation easement?
In general, a conservation easement is a nonpossessory interest of a holder in real property imposing limitations or affirmative obligations, for the purposes of protecting or preserving the natural, scenic, historical or open-space values of the property. The easement permanently limits the uses of the land in order to assure its availability for forest, agricultural, recreational, educational, open-space or wildlife uses, maintain or enhance air and water quality or preserve the natural aspects of the property.1
 In other words, a conservation easement is a voluntary legal agreement between a private landowner and an easement holder, usually a public agency empowered to hold an interest in real property or a charitable organization such as a land trust.
Owning a piece of property comes with a number of rights. For example, a property owner generally has the right to construct buildings on his or her land, to subdivide the land, to allow or restrict access, or to harvest natural resources such as timber. A property owner can sell or give away any or all of these rights. If the property owner gives away some of these rights and retains others, he or she grants an easement of those rights given away to a third party. The third party (e.g., government agency or charitable organization) then has the right to enforce those property rights granted to them in the easement.
Each easement is specifically tailored to meet the landowner's interests and personal objectives for the property. Each conservation easement document contains the specific rights the property owner gives away in order to protect his or her land. For example, a property owner may give away the right to subdivide the land, to allow or limit access, or to harvest all or a portion of the timber resources. Most conservation easements are granted in perpetuity, assuring property owners that the values of their land that they seek to preserve will be protected indefinitely.
In short, a conservation easement is a flexible tool that protects land while
leaving it in private ownership.
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What are the benefits of a conservation easement?
Donating a Conservation Easement Can Reduce a Property Owner's Income Tax
The donation of a conservation easement qualifies as a tax-deductible charitable gift, provided that the easement is donated to a qualified public agency or conservation organization "exclusively for conservation purposes . . . [and] protected in perpetuity."2 For tax purposes, "conservation purpose" is generally defined as:
- the preservation of land areas for outdoor recreation or public education;
- the protection of a relatively natural habitat of fish, wildlife or plants, or similar ecosystem; and
- the preservation of open space (including forest land) where the preservation is for the scenic enjoyment of the general public or pursuant to a clearly delineated Federal, state or local governmental policy.3
To determine the value of the conservation easement donation, the property owner has the property appraised at both its fair market value without the easement restrictions and its fair market value with the easement restrictions. The difference between these two values is the value of the conservation easement.
Granting a Conservation Easement Can Reduce a Property Owner's Estate Tax
Many heirs to large tracts of land face monumental estate taxes. Although heirs may want to keep the property in its existing condition, federal estate taxes are levied on the property's fair market value, not on the value of its existing use. The fair market value is usually the amount a developer or speculator would pay. The estate tax can be so high that the heirs must sell the property to pay the taxes.
 Conservation easements can reduce estate taxes by decreasing the fair market value of the property. If an owner has restricted the development of the property through a conservation easement before his or her death, the property is then valued at its restricted value. Thus, the property will be subject to a lower estate tax.
If owners do not want to restrict the property during their lifetime, they can specify in a properly structured will that a charitable gift of a conservation easement be made upon their death. The value of the easement will be subtracted from the value of the property, again resulting in lower estate taxes.
Granting a Conservation Easement Can Reduce a Property Owner's Property Tax
In general, property tax assessment is based on the property's market value, which reflects the property's development potential. If a conservation easement reduces the development potential of the property, it may reduce the amount of the property owner's property tax. However, state laws and the attitude of local property tax assessors may determine whether property tax relief will be granted to a conservation easement donor.
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What kind of land can be protected by a conservation easement?
Any property with significant natural resource values can be protected by a conservation easement, including forests, wetlands, endangered species habitat, beaches, scenic areas, etc.
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Who can grant a conservation easement?
Any property owner whose land has natural resource values may grant a conservation easement. If the property is jointly owned, all owners of the property must consent to granting the easement. If the property is mortgaged, the property owner must obtain consent from the lender to subordinate its interests to those of the easement holder. Otherwise the conservation easement could be extinguished in the event of foreclosure.
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Who can hold a conservation easement?
If a property owner wants to claim tax benefits for a conservation easement, he or she must donate it or sell it for less than fair market value to a government agency empowered to hold an interest in real property or any conservation organization that qualifies as a public charity under Section 501(c)(3) of the Internal Revenue Code.4
Most land trusts are 501(c)(3) organizations, but a property owner should ensure that the recipient organization has the resources to carry out the responsibility of holding a conservation easement.
To learn more about land trusts, visit
the site of the Land Trust Alliance. The
National Land Trust Census shows just how many acres have been protected by
conservation easements and other methods, as of the year 2000. The growth
in conservation easements and local and regional land trusts is shown
state-by-state in the
data of that census.
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What are a conservation easement holder's responsibilities?
The holder of a conservation easement is responsible for enforcing the restrictions contained in the easement document. To enforce the restrictions, the easement holder regularly monitors the property. To accomplish this, representatives from the easement holder organization visit the property accompanied by the property owner, usually no more than one to two times a year. They determine whether the property remains in the condition described in the easement document. If a monitoring visit reveals that the easement has been violated, the easement holder has the legal right to require the owner to correct the violation and restore the property to the condition described in the easement document.
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How restrictive is an conservation easement?
 A conservation easement restricts development on the property to the degree necessary to protect the natural resource values of that property. If the easement is designed to protect a pristine natural area, the easement may prohibit all construction. If the easement is designed to protect agricultural or forest land, an easement may restrict subdivision and development while allowing for compatible structures and activities that are necessary to continue traditional uses of the land. Remember, each easement is specifically designed to meet the landowner's interests and personal objectives for the property
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Does a conservation easement require public access?
Property owners who grant conservation easements may decide to allow the public to access their property. In general, conservation easements granted for the purposes of protecting environmental systems or habitats generally do not require public access.5 Nonetheless, property owners may convey certain public access rights, such as allowing hiking, fishing or hunting in specific locations.
However, certain types of conservation easements do require public access if an income tax deduction is to be claimed. If an easement is made for the purpose of recreation or education, then some degree of public access to the land must be allowed.6 Easements made for scenic enjoyment require visual access of the land (i.e., much of the property must be visible to the public), but physical access to the property is not necessary.7
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How long does a conservation easement last?
 A perpetual conservation easement lasts forever. Easements also run with the land, which means that all subsequent owners of the property are bound by the terms of the conservation easement. While state laws differ, easements are generally recorded with the county or town records office so future owners and lenders will be aware of the restrictions when they obtain title reports.
While only gifts of perpetual easements can qualify a property owner for income and estate tax benefits, some state laws allow conservation easements to be written for a specific term of years.
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foot notes
1. See, e.g., Miss. Code § 89-19-3; Ala. Code § 35-18-1.
2. I.R.C. § 170(h)(5)(A).
3. I.R.C. § 170(h)(4)(A).
4. I.R.C. § 170(h)(3).
5. Treas. Reg. 170A-14(d)(3)(iii).
6. Treas. Reg. 170A-14(d)(2)(ii).
7. Treas. Reg. 170A-14(d)(4)(ii)(B).
resources
Janet Diehl & Thomas S. Barret et al., The Conservation Easement Handbook 5-9 (1988).
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