What is a Conservation Easement?

A conservation easement is a legal agreement between a land owner and a land trust (or government body), which permanently restricts uses of land in order to protect its conservation, scenic or historic values. The owner continues to own the restricted land and may sell the land or pass it on to heirs, subject to the restrictions.

The easement may apply to just a portion of the landowner's property and need not require public access.

The land trust is responsible for ensuring that the easement's terms are followed.

If the donated easement benefits the public by permanently protecting important conservation resources and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation (land trusts are deemed charitable organizations  by the IRS). The amount of the donation is the appraised difference between the land's value with the easement and its value without the easement.

In some circumstances a conservation easement can be used for passing land on to the next generation. By removing the land's development potential, the easement lowers the market value, which in turn lowers any estate tax.

Acceptance of Easements by CCT

The Board of Directors of the Cornwall Conservation Trust (CCT) has adopted criteria governing the acceptance of conservation easements (see next section, below). The reason for doing so is to assure that conservation activities are directed toward properties that are truly worthy of protection.

Easements must be accepted by a majority vote of the CCT Board. Each property is evaluated through close investigation of its resources and qualities. Acceptance remains discretionary, and an easement that satisfies any or all of the criteria does not automatically create an obligation of the part of CCT to accept the easement. CCT Directors must find that at least four of the criteria are met. If fewer than four are met, but the property has special significance in relation to any of the criteria, the Board may accept an easement with an explanation in its meeting minutes of its reasons for doing so.

Any development permitted under the easement shall minimize impacts on and demonstrate significant measures to protect the scenic, agricultural, ecological, watershed, recreational, historical or other resource values of the property.

CCT's policy is to accept easements which are "cost neutral" to itself. That is, costs associated with attorney's fees, surveys, appraisals, baselines, title searches and the like will normally be borne by the landowner.

CCT will also request an endowment to support its permanent responsibility for monitoring and enforcement.

General Criteria For Accepting Conservation Easements (minimum of four required)

1. The property is visible to the public from roadways, waterways, recreational areas or other public places, and/or contains an important ridgeline.

2. The development of the property would diminish scenic views to the public and/or interfere with public views across already protected open space.

3. The property is in active agricultural or forestry use.

4. The property contains high quality farm soils and/or includes or buffers other important agricultural land.

5. The property contains or buffers wetlands, important wildlife habitats, known wildlife migration routes or other ecologically sensitive areas.

6. The property includes and/or borders a river, stream, pond, or other body of water, and/or development of the property will affect the integrity of a significant watershed area, aquifer or floodplain.

7. The property is in a relatively natural, undisturbed condition and/or is part of an unfragmented forest and/or natural area that extends beyond the property borders.

8. The property is large and compact, 50 acres or more in size.

9. The property shares a common boundary with, or is in close proximity to, (a) publicly preserved land, (b) other conservation easement-protected property, (c) other significant open space areas, and/or (d) private land which is likely to be permanently protected in the near future.

10. The property is of sufficient size and configuration that its significant features (as stated in the above criteria) are likely to remain intact in spite of adjacent development.

11. The protection of the property is pursuant to a clearly delineated Federal, state, or local governmental conservation policy and will yield a significant public benefit.

12. The protection of the property will preserve a historically or culturally important area.

13. (Optional) Public access for outdoor education or recreation will be permitted.

The Easement Process

Timing a conservation easement transaction can be critical in meeting a landowner's life or tax needs, or in structuring a real estate sale. It is best to contact the CCT as early as possible when considering easements. Normally, CCT requires a minimum of six months from receipt of a proposal to completion of a transaction (sometimes longer if it's a complex one).

If an easement is to be accepted by CCT, the Trust must participate in developing its terms.

The steps involved in placing an easement on a property are:

Initial Visit

Any CCT Director may be approached with a proposal (See "Proposal for offering property or development rights"). He/she will provide a short checklist of information required to evaluate the proposal. Directors will then visit the property, discuss the landowner's preservation and future development options, and assist the landowner in defining conservation goals.  (Please note: Directors cannot provide legal or tax advice.)

At this stage a committee of Directors will assess whether the property meets the CCT's criteria for acceptance of conservation easements. If so, it will recommend the full Board give its initial approval to proceed with the project. If not, additional information may be requested, or the proposal may be declined.

Survey Map and/or Land Planning Analysis

A recent survey map is required, preferably an A-2 version. It must be prepared by the landowner's licensed surveyor. The survey should clearly indicate portions of the property to be retained by owner and not conserved and the portions to be conserved by the proposed easement. The survey should also show the names of neighboring owners.

One or more well-sited homes or agricultural buildings will not necessarily compromise the important open space attributes of a property. In some cases an owner may wish to give a one-acre lot to the Cornwall Housing Corporation for affordable housing; a land planner could help designate an appropriate location. 

Planning for some limited development may be the best means of addressing financial and family goals while assuring preservation of the overall character of the property. If the landowner wishes to explore limited development options, CCT may suggest a land planning analysis. The analysis is often summarized in a map which becomes part of the easement document.

Appraisal (required by IRS)

If a landowner intends to seek a tax deduction from the IRS for making a charitable contribution of development rights, an appraisal of the property must be obtained by the landowner from a qualified appraiser. Note that the appraisal must be dated no sooner than 60 days before the easement is donated, and it must be received before the the landowner's tax return is due.

Sometimes a preliminary appraisal or "opinion of value" can be obtained to determine the effect easement restrictions may have on the overall value of the property.

Baseline Documentation (required by IRS)

A baseline report documents the "conservation values" of the eased property at the time of acquisition by CCT. Maps, photographs and other information on flora and fauna and special natural, scenic or cultural features comprise the baseline for the property. Usually, part of the baseline documentation is a statement concerning environmental hazards, or lack thereof, on or near the property.

The baseline report is a requirement set by the IRS to justify its not inconsiderable tax benefits, and is one of the expenses absorbed by the landowner. (CCT can recommend professionals who can provide a report both compatible in form with others held by CCT and which is competitive in pricing.)

Subsequently, the baseline allows CCT to monitor whether significant alterations to the land or disregard of easement terms occur.

Draft Easement

The landowner's attorney prepares a draft legal document, which reflects the agreements reached between the landowner and CCT. The document spells out the development rights to be restricted and the use rights to be retained by the landowner. Much of the language in the easement is required by the Internal Revenue Code, but owners and CCT may agree on a number of specific conditions desired by the donor -- for example rights to farm, graze, log, hunt, cut trails, deny vehicular or public access, and build structures.

A recent title search will be requested from the landowner.

Final Easement

Once an easement document is agreed upon by both the landowner and CCT, it is reviewed by each party's attorneys. CCT's Board of Directors votes to accept the easement.

Executing and Recording the Final Agreement

The final conservation easement is signed and notarized by both parties and, together with the mylar copy of the survey map, is recorded by the Town Clerk in the land records.

IRS Requirements

IRS Form 8283 (Noncash Charitable Contributions) is signed by the owner, appraiser and CCT and then filed with the donor's income tax return. (If the appraised value of the easement is in excess of $500,000 the original appraisal must be attached to Form 8283.) In any case, the donor should retain a copy of the easement, appraisal and baseline report in case the IRS should challenge the tax deduction.

Endowment Request

CCT routinely asks for a voluntary contribution to cover costs of documenting the easement, of annual monitoring, and of possible enforcement of the terms of the agreement in the future (see next section, below). The amount requested is usually a small percentage of the value of the easement. Such "endowments" can be considered a landowner's insurance policy to guarantee the long-term enforcement of the conservation easement.

Monitoring and Enforcement

After the easement has come into effect, representatives of CCT will notify the landowner when they wish to conduct a monitoring visit to the property to ensure that the terms of the easement are being upheld. If structures are permitted under the easement, CCT reviews plans and monitors construction for compliance with the plans and easement. If a violation occurs, CCT requires voluntary correction, and if necessary, may need to take legal action to enforce the easement.

Rev. 2/08