Conservation Easements: Landowners Beware
Creation of an easement—conservation or scenic—has become the tool of choice for federal agencies to gain control over private property. The stated reason: protection of the "environment". The agency offers the landowner a cash payment in exchange for limiting the use of a piece of the owner’s property so the agency can protect the resources (including species) in that area. Such a deal, if executed, creates a "conservation easement", restricting the type and amount of development a landowner is permitted on his property. The offer to the landowner may also carry with it the prospect of an income tax deduction, a lowered ad valorem (local property) tax, and a lower estate tax burden on the owner’s heirs.
The government’s offer often sounds good to the landowner because he will receive cash for limiting the use of part of his land instead of facing governmental condemnation actions or governmental regulatory restrictions. We often hear the comment, "It’s a pretty good deal. After all, it’s only an easement so I still own the property." Many landowners believe that when an easement is created, they have joint rights with the person buying the easement. They view the easement in the traditional sense in which an adjoining owner is simply granted an easement for access across a parcel of land. They believe the creation of an easement does not involve the actual transfer of property rights.
Nothing could be further from the truth. The creation of a conservation or scenic easement actually conveys (transfers) property rights. Legally, an easement is defined as "a right of use over the property of another." Thus, the only property rights remaining to the landowner are those that are specifically spelled out in the terms of the document creating the easement. Landowners literally become a subservient owner, and the land trust becomes the dominant, managing partner of the property. Also, the conservation easement allows the land trust to convey these rights to any other government entity.
No one should transfer an easement with the thought in mind that "it’s only an easement." When a landowner transfers an easement to another person, the owner is actually transferring, not just sharing, property rights. The transfer of an easement is in fact a real property transfer—when you sign a document creating an easement with another party, you sign away property rights with regard to the area covered by the easement. The control of use of the property covered by the easement is transferred to the person who purchases the easement.
An easement is binding for the prescribed period of time stated in the contractual documents, and runs with the land. If you have transferred an easement to be held in "perpetuity", that means that you have transferred the right to control the property covered by that easement forever—such term is binding on you, as well as your heirs or anyone to whom you try to sell your property. Further, after you have signed a document creating an easement, there may be only one "right" which you still maintain with regard to the property on which the easement exists; the "right" to continue paying the ad valorem (local property) tax on the entirety of your property, including the portion upon which the easement exists.
It seems elementary to suggest that no landowner should ever sell an easement without full inquiry (legal, appraisal, and accounting) as to the impacts the easement will have on him and his heirs. But, the suggestion is made because so many folks still do not understand the severe adverse impact which creation of an easement can have on their property rights and on the value of their land.
(Reprinted in part with permission of Fred Kelly Grant. Visit www.propertyrights.org for complete story)