The Conservation Easement Process
Timing a conservation easement transaction can be critical in meeting a landowner’s tax needs, preparing for estate purposes or divestment plans, meeting neighborhood or family goals, or structuring a real estate sale. It is best to contact Dutchess Land Conservancy as early as possible when considering a conservation easement for your property. DLC will work with you to develop the terms of the easement based on your plans for the property and will try to make the process as enjoyable and streamlined as possible. Below are the steps involved in donating a conservation easement to DLC.
Donating a Conservation Easement – How It’s Done
The conservation easement process usually begins with a phone call to our office. The office manager can connect you with staff who can explain the conservation easement process, DLC’s conservation easement acceptance criteria, potential tax benefits, and answer any questions you may have about conservation easments or DLC.
The next step is for staff to arrange a convenient time to visit your property. If you are available, we prefer walking the property with you as no one knows a property better than the landowner. Otherwise, with your permission, we are happy to visit the property on our own taking our resource maps in order to get a good sense of the land. While on the property we assess the important resources to be protected as well as potential locations for future reserved house sites. While there, DLC also assesses whether a potential easement on the property will meet its Conservation Easement Acceptance Criteria.
Land Planning Analysis
While some landowners know exactly what they want for the future of their land, others need assistance to help them determine what makes sense for them. DLC can work with landowners to plan development that will not compromise the important open space and natural resources on the property. Planning for some limited development can help address family and financial goals and still accomplish the preservation of the overall open character of the land. DLC starts by preparing some base maps of the property and conducting a resource analysis to determine specific areas that are important to protect. If a landowner wishes, DLC can conduct a land planning analysis to determine the best places for limited development on the property. If you and DLC decide to proceed with a conservation easement, this analysis can be used as the basis for a conservation easement map. The conservation easement map designates areas for buildings (building evelopes) and the areas of the property to be protected (preservation areas) and is attached to and recorded with the conservation easement.
Draft Conservation Easement
With your assistance and input, DLC will draft a conservation easement for your review. This document will set forth the restrictions to be placed on the property that will ensure its protection. For example, depending upon the size of the property and the resources to be protected, we will work with you to determine whether the easement will allow the property to be subdivided, whether additional principal residences will be built, where building is allowed to occur and areas that should be left untouched and natural. Easement negotiations and achieving the final easement draft is a collaborative process. We are happy to work with you personally or your representatives on the easement terms. This collaboration ensures that your plans for the property together with DLC’s conservation goals are integrated into the final document.
Seeking Advice from Your Financial and Legal Advisors
Throughout the conservation easement process, we strongly recommend that you work with your financial and legal advisors. Placing a conservation easement on land is a commitment that is forever and thus can have significant legal and financial effects. We want to ensure you have considered all of the pros and cons ahead of time. We are happy to consult with your advisors at any time during the process.
When a landowner donates a conservation easement, the donation is considered a charitable gift by the IRS and can potentially be tax deductible. If you are interested in taking a tax deduction for donating a conservation easement, an appraisal by a “qualified” appraiser is required to satisfy IRS requirements. Most landowners will request a preliminary appraisal or preliminary “opinion of value” to determine whether the conservation easement can qualify for a tax deduction. The appraiser will determine the value of the property before the conservation easement and the value of the property with the easement in place. The difference in these two values equals the value of the charitable gift. DLC has a list of qualified appraisers that it can provide to landowners as a resource.
DLC Board Approval
After working with you on the terms of the conservation easement, staff presents the easement to DLC’s Board of Directors. The Board reviews the easement and votes to accept it or may request modifications by the landowner. All conservation easements must be voted upon by DLC’s Board before they can be recorded.
Baseline Documentation Report
As part of the conservation easement process, DLC creates a Baseline Documentation Report. This report consists of detailed maps and photographs of the property and includes a summary of its important resources. The purpose of the report is to document the condition of the property at the time that the easement is finalized. This report helps DLC monitor the changes to the property over time, is required by the IRS for tax deductible easements, and also provides you with a wonderful account of the property and all of its important characteristics. The Baseline Documentation Report is signed at the time the conservation easement is executed and both the landowner and DLC certify that it is an accurate and current account of the property.
The final conservation easement is the legal document that will be recorded with the County Clerk. Recording the conservation easement is required by New York State law for the easement to be effective and it ensures that each subsequent landowner knows about the conservation easement in order to comply with its restrictions.
Once the conservation easement and baseline documentation are in final form, we are ready for the closing. Usually, we will close the conservation easement at DLC’s office, but depending upon your availability, we can close at another location or by mail. All documents are signed by the landowner and DLC and are notarized. Landowners receive a fully executed copy of the conservation easement and a baseline documentation report for your files. DLC staff will record the conservation easement at the County Clerk’s office and send you a copy of the recorded easement once it is returned to our office.
Once DLC accepts a conservation easement, we have an obligation to monitor and enforce the easement in perpetuity. In order to help cover the expenses associated with monitoring and enforcing our conservation easements, we request that each conservation easement donor contribute to our Easement Stewardship Endowment Fund. The amount of the request is based on DLC’s formula for determining our annual costs to monitor and oversee each easement. This fund helps ensure that we will meet our stewardship obligations to you and to the public.
Monitoring and Enforcement
After the closing, DLC’s stewardship obligations begin. Once a year we will provide you with notice that we are planning annual aerial monitoring of our conservation easement properties. DLC staff and a local pilot fly over all our conservation easement properties in the winter when the leaves are off the trees and the properties are the most visible to ensure that the conservation easement obligations are being met. Additionally, once every three to four years, we will give you notice that we would like to ground monitor your conservation easement at a time that is convenient for you. You are welcome to accompany us on our ground monitoring visit or we are happy to monitor the property on our own.
DLC strives to maintain cooperative relationships with every conservation easement owner. Upon signing an easement you become one of our “Stewards of the Land”. We encourage landowners to contact us if there is any question regarding the conservation easement terms or permitted uses of the property. All easement owners are invited to our educational events, which provide information to help further the stewardship and care of their property. We treasure our conservation easement owners as we know that they are vital to the success of DLC and our efforts to conserve the rural, scenic and natural character of our area.
If you are interested in learning more about conservation easements and DLC, please contact us at (845) 677-3002.