What is a Conservation Easement?

Conservation easements are land preservation agreements that restrict specific activities on a piece of land in order to protect its natural and/or cultural resources. The primary beneficiary of the easement is usually a nonprofit conservation organization, government agency or land trust, though landowners are also beneficiaries in that these agreements may allow them to receive financial or tax benefits while also protecting their land from development.

These agreements generally involve placing a legal restriction or “deed of easement” on the title of a property. This deed must be recorded with the local government, and once it is recorded, the restrictions are permanent and legally enforceable. It is important to note, however, that the easement does not necessarily give the conservation organization or government agency any rights to the land—the landowner retains all legal ownership rights to the property, including the right to control access to it.

How Can a Conservation Easement Help You?

For landowners, conservation easements offer a great deal of potential benefits. Depending on the terms of the easement, the primary benefit of a conservation easement for a landowner is its potential value as a tax-deductible donation to the conservation organization or government agency that placed the easement. The landowner can also benefit from the fact that they are still able to use their land but will likely not benefit from any potential future increase in the property’s value or any development potential that would be maximized without a easement in place.

Conservation easements can also benefit real-estate investors. For example, if you are investing in a certain property that has a conservation easement in place, you may be able to purchase the property at a lower cost than a similar property that is not restricted by a conservation easement. Additionally, if you are looking for income from a long-term rental or lease agreement, conservation easements can help ensure that your property remains desirable and will be able to maintain a steady stream of rental income for many years.

The Pros and Cons of Conservation Easements

Overall, conservation easements offer a number of potential benefits for both landowners and investors. However, there are also some potential drawbacks that should be taken into consideration.

First, while conservation easements can provide valuable tax breaks or income for the landowner, they do restrict the use of the land. As such, landowners may be unable to take advantage potential future development opportunities without these easements being modified or terminated.

Additionally, in order for an easement to be legally-enforceable, it must be recorded with the local government. This can be a lengthy and complex process, and it can be difficult to find an organization to administer the easement. Furthermore, conservation easements can be expensive to establish and maintain, and there are often additional on-going costs associated with legal and administrative fees.

Conclusion

Overall, conservation easements offer a number of potential benefits for both landowners and investors, including potential tax breaks, income or lower property costs in the case of investors. While these agreements can restrict the use of the land, they can also help ensure that your land remains desirable and can maintain a steady stream of rental income for many years. However, it is important to be aware of the potential drawbacks of conservation easements, including the cost of setting up and maintaining the agreement and the potential restrictions placed upon development. If you are considering purchasing a property with a conservation easement or looking to place one on your own land, it is important to carefully consider the pros and cons of entering into this agreement before taking next steps.