Benefits and drawbacks of conservation easements
By Patrick Casey
Lombardo and Gilles
A landowner may consider granting a conservation easement for various reasons. Before signing on the dotted line, a landowner must consider a number of factors in negotiating such an easement. Most f these factors are negotiable (depending upon the proposed easement holder) and can have a significant impact upon whether a landowner grants a conservation easement and to whom.
Benefits and drawbacks of conservation easements
By Patrick Casey
Lombardo and Gilles
A landowner may consider granting a conservation easement for various reasons. Before signing on the dotted line, a landowner must consider a number of factors in negotiating such an easement. Most f these factors are negotiable (depending upon the proposed easement holder) and can have a significant impact upon whether a landowner grants a conservation easement and to whom.
The selection of the conservation easement holder is of primary concern and may be the most important factor of all. There are more than 2,000 land trusts in the United States, each with a different focus. Some land trusts are more flexible than others with respect to the terms and conditions of the conservation easement. It is important for landowners to interview land trusts to decipher their goals and willingness to discuss terms and conditions. A landowner should also talk to other landowners that already have conservation easements with different land trusts and find out what they think. Furthermore, a landowner may want to consider having a “no assignment” clause such that the easement holder cannot transfer the conservation easement to another land trust without obtaining the landowner’s prior consent.
A second factor is whether there are threatened or endangered species or habitat on the land. A conservation easement does not expand or limit the federal and state protection given to such species or habitat. Furthermore, a landowner’s obligations to comply with the federal and state laws regarding threatened or endangered species or habitats are the same regardless of whether or not there is a conservation easement. The landowner should strongly consider having a qualified biologist inspect all of the land and prepare a report to the landowner about whether there are any threatened or endangered species or habitat on the land.
Third, fencing may be an issue. The landowner will want to retain the ability to replace the existing fencing with new fencing, or move fencing to a new spot. One issue that may arise is if the conservation easement holder wants to fence a portion of the property to establish a wildlife corridor or to protect a riparian habitat. The conservation easement should address whether the easement holder does (or does not) have this right and if it does, then what actions can it take to enforce this right.
Another issue is in regards to the use of the land. A conservation easement should address whether the landowner can convert the land from its current use to being used for row crops or grazing.
In addition, the conservation easement should address whether the landowner can construct additional houses for family members, barns, chutes, pole barns, wells, irrigation systems and related facilities. A landowner will not be able to develop land that is subject to a conservation easement for large scale commercial or residential housing purposes. At a minimum, the landowner should preserve the right to build any structures required for agricultural or cattle ranching purposes.
Another issue to be addressed is mineral extraction, which may include oil extraction. Most conservation easements typically prohibit mineral extraction. However, a landowner can negotiate for certain mineral extraction rights with respect to portions of the land so long as it does not significantly affect the overall conservation purposes of granting a conservation easement. This is true even if the landowner is not currently conducting any oil or mineral extraction from the land.
Granting a conservation easement does not prevent the government from taking the land by eminent domain and using it for public purposes. However, a landowner may, in certain circumstances, negotiate to prohibit public access rights to the land. Prohibiting public use will not be an option if the purpose of the conservation easement is for conserving lands for outdoor recreation by, or education of, the general public. However, if the conservation easement’s purpose is to preserve open space, then the landowner should be able to prohibit public access to the land.
There are clearly both benefits and drawbacks to conservation easements. In the right circumstances, a conservation easement is a good way to preserve the agricultural nature of land and to provide certain estate tax benefits. However, it is imperative that the landowner clearly understands the effects and long term consequences of a conservation easement. A conservation easement will be a burden on the land for all future generations and cannot be removed.
This column is the work product of Lombardo & Gilles, LLP, which has offices in Hollister and Salinas. Patrick Casey is an attorney with Lombardo & Gilles, LLP. You may contact the author at (888) 757-2444 or email to [email protected]. Mail your questions to Patrick Casey, It’s the Law, c/o The Pinnacle, 380 San Benito St., Hollister, CA 95023.
