MORRISON: Conservation easements - too good to be true
Tuesday, November 04, 2003
By Joyce Morrison
OPINION -- Conservation easements have become a popular way to prevent development rights. The concept is to preserve farm land while at the same time preventing urban sprawl.
Easements have also become a way that farmers and ranchers who are operating on a thin profit margin have found as a quick fix to their cash flow problems.
By signing land up in a Conservation Reserve Program (CRP), they receive an annual payment for a given amount of years depending on the program they have selected. They lose control of the land as it now comes with regulations and restrictions.
Before landowners make a decision to sign their property up for "perpetuity," which means forever, they should give very serious thought and ask someone for advice who will present both the pros and cons.
Land trusts and conservancy groups are courting potential landholders to turn their land over to them. They give all the reasons why they will forever protect your precious property; but is there another side to this story?
If a decision is made to forever protect your land by granting an easement, it will never belong to an individual again - not you nor your heirs. The easement will be attached to your deed.
If someday your kids inherit your property and choose to fulfill a new vision, it can never be done. In fact, they are stuck with a piece of property that may have no value to them, and basically the only people interested in purchasing the property as a whole would be a land trust such as Nature Conservancy or Farmland Trust.
The University of Illinois describes a conservation easement as a legal document that spells out what can and what cannot be done on a property.
In most cases, a conservation easement will prohibit or limit development of the property. Each easement is unique and is written to reflect the wishes of the property owner and the character of the property.
Easements "run with the land," which means that future owners, no matter how they acquire the land, must abide by the terms of the easement. Easements are "donated" to a conservation organization or government entity, which accepts the responsibility to monitor the easement and to enforce its terms. The holder of the easement has no ownership in the land - just the responsibility to ensure that the easement is being followed.
"A property owner must understand that by granting a conservation easement, he is not only restricting the future use of his property, he is actually conveying an interest in the property to a government agency," according to property rights advocate Rachel Thomas.
"Just ask the bank what youíre good for before and after the easement deal," Carol LaGrasse of Property Rights Foundation of America said. "The bundle of rights to use the land is so severely diminished that the farmer, rancher or forester is essentially a tenant on his own land."
LaGrasse said the use of conservation easements is just a step from 100 percent private ownership to 100 percent government ownership of property. A financial crisis can arise necessitating the use of the land for equity, but the equity essentially no longer exists.
The University of Illinois says easements can provide tax benefits to the property owner. These benefits can be a charitable deduction, a property tax reduction in Illinois, and a reduction in inheritance taxes.
An important consideration for many owners is that the land remains in their ownership and can be sold or otherwise transferred in the normal ways.
The Paragon Foundation published a fact sheet called, "Myths about conservation easements."
One of the questions answered is, "Selling property with a conservation easement will be easy?"
Paragon says, "No. Not many people are willing to share title with an organization or agency as well as banks willing to lend money to purchase property with a split title."
Local communities and school districts are finding the tax burden is being placed on fewer and fewer property owners. Land trusts, environmental organizations, and the government are controlling more and more of the land, and they pay no taxes.
Another question answered by Paragon is, "If I sell a conservation easement, I can still use my property, just as I always have."
Paragon once again says, "No. You give up control of all property covered in the easement." FOREVER, there will be an organization or agency with the power to look over your shoulder and approve or disapprove management practices.
Most easements require you to give access at all times, even during the growing season when access can damage crops. You may have to obtain approval for weed control, grazing, or other management practices. Many easements allow "approved" practices but may not list specific practices. Thatís a loophole that allows the easement holder to change the list of approved practices without your consent.
Private conservation groups, environmental groups, and land trusts as well as governmental agencies can help landowners develop plans to conserve land. A landowner can be absentee and his property managed by a farm management service and he may not realize his land has been signed away as a conservation easement.
Researchers who are following this trend are connecting the conservation easements to the corridors designed in the Wildlands Project. A recent article by property rights specialist Ric Frost quotes Dave Foreman, founder of the Earth First movement, as saying he considers conservation easements as the keys to the corridors.
"If we identify a ranch that is between two wilderness reserves, and we feel it will be necessary as a corridor, we can say to the rancher, "We donít want you to give up your ranch now, but let us put a conservation easement on it. Letís work out the tax details so you can donate it in your will to this reserve system," Frost quotes from Listening to the Land by Derrick Jensen (Sierra Club Books).
Whether you are considering granting a conservation easement or not, you should ask yourself a few questions.
If it seems too good to be true, it probably is.
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