NCPA - National Center for Policy Analysis

Problems With Conservation Easements

December 29, 2000

The Tax Reform Act of 1976 has fueled the growth of private land trusts and began the tax-favored treatment of conservation easements. Easements are legal documents restricting future development on private properties in perpetuity at the bequest of current owners.

  • According to a 1998 National Land Trust census conducted by the Land Trust Alliance, the number of land trust organizations increased by 63 percent over a 10-year period.
  • The amount of acreage protected by easements quadrupled.

Landowners concerned about the long-term problems easements present may want to consider alternative methods of land preservation:

  • Donating land or selling it at a reduced price to a nonprofit conservation organization are alternatives that offer permanent protection of natural areas.
  • The tax advantages of an outright gift can exceed those of a conservation easement.

Property owners may be drawn to easements because this preservation method allows them to retain ownership. The low cost of purchasing or accepting responsibility for easements may also be attractive to nonprofits.

  • One liability is the cost associated with monitoring and defending easements in perpetuity if the donor's intent is to be enforced.
  • "Easements are difficult to properly execute and should require a hefty balance in stewardship or legal defense funds", explains Geoff Maclay, president and founder of the Cedar Lakes Conservation Fund.
  • For instance, Pennsylvania's French and Pickering Creeks Conservation Trust incurred more than $100,000 in legal fees over a nine-year period successfully litigating a violated easement.

Private land trusts have made remarkable contributions toward improving, protecting and preserving natural resources. But without careful planning, conservation easements can also be expected to fatten file cabinets and inflate transaction costs.

Source: Mary Jo Joyce (Cedar Lakes Conservation Foundation), "The Problem with Easements," Philanthropy, September/October 2000.

 

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