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More to easements than meets the eye

You’ve probably heard of conservation easements. Maybe you are considering putting one on your land. There are certain misconceptions that some people have about conservation easements, so this month I will try to clear up some of them.

First, let’s go through some basics. A conservation easement is a type of deed. A conservation easement is an agreement between the landowner and an organization, such as a land trust, or government, such as a town’s conservation commission, to restrict the development of the land for the purpose of forever protecting natural features or uses of that parcel of land. The landowner continues to own the land, but no longer owns the right to develop that land, except as set out in the conservation easement deed.

The land trust or government that owns the conservation easement is typically called the holder. Easement holders include the Town of Peterborough, The Nature Conservancy, The Forest Society, Monadnock Conservancy, the N.H. Department of Fish and Game and many more. The easement holder’s job is to periodically monitor the parcel to ensure that the easement is not being violated, such as by the construction of a garage in an area where structures are not allowed.

A landowner either sells or donates a conservation easement to the easement holder. When a conservation easement is put on a property, the market value of that property almost always goes down. This is because the landowner no longer has development rights, and without those rights the property is worth less to most buyers. If you donate an easement you may be able to deduct the value of your donation from your federal income taxes. Your property taxes might also go down due to the decrease in market value.

One misconception that I have heard is that you cannot put a conservation easement on a farm. This is not true. Agriculture is commonly allowed by conservation easements. An easement put on a working farm could be primarily for the purpose of ensuring that the farm continues to be a working farm and is not turned into a subdivision. There are many organizations working in New Hampshire to preserve farming and family farms, and conservation easements are one tool they are using.

Some landowners are concerned that a conservation easement will make it difficult to sell their property. Of course, some potential buyers would no longer be interested in the property. But some buyers specifically look for properties that have been conserved. I know of at least one real estate company — N.H. Conservation Real Estate — that specializes in marketing and selling properties with conservation easements. You can search for properties at www.nhconservationrealestate.com. Because the conservation easement decreases the value of the land, buying conserved property might allow you to own more land than you otherwise could afford. One hundred acres without a conservation easement is much more expensive than 100 acres that is protected by a conservation easement. If you aren’t interested in developing the land beyond what is allowed in the conservation easement deed, then you might not want to pay for that right.

The greatest concern that people have is that a conservation easement would prevent them from doing what they want to do on their property. Conservation easements are not for everybody. However, conservation easements are routinely written with substantial flexibility, subject to numerous state and federal laws that govern what is allowed under a conservation easement. Areas are set aside for structures such as homes, barns, and outbuildings. You might be able to reserve the right to install a pool or dig a trout pond. Of course, if you are the person putting the easement on the property, you will have the opportunity to incorporate such flexibility. But even if you are thinking of buying an already-conserved parcel, go read the conservation easement and find out what it really allows or restricts. Don’t simply assume that you will be prohibited from doing what you’d like to do.

There are organizations currently working in New Hampshire that can match potential buyers with landowners who want to put an easement on their land. By getting into the conversation at the time of writing the deed, the buyers can ensure that their future needs are met. I recently met a young farming couple who bought a farm near the Seacoast. When they were searching for a farm to buy, a matchmaker organization connected them with farm owners who were ready to sell and who wanted to put a conservation easement on the property. If not for the reduction in value caused by the easement, the young farming couple would not have been financially able to buy the farm. The buyers also had the opportunity to help craft the language of the easement in a way that aligned with their intended use of the farm.

So, to ease or not to ease is up to the current owner or the prospective buyer. The conservation easement can be drafted creatively and flexibly to meet the needs of most, and to preserve the natural resources of the land.

Jason Reimers is an attorney for BCM Environmental & Land Law. This article is not legal advice.

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