CONSERVATION EASEMENT SERVICES
A landowner considering a conservation easement first needs practical advise on whether one is feasible or not, where to get help and how to get started. A phone call to AgLand will save time and frustration. If the potential is slim, we’ll describe why, but if there is potential, we will come to your ranch, farm or forest for a day or two on your schedule to better understand your needs, identify working strategies and document a procedure to take you through it.
AgLand only advocates for agricultural working-lands landowners. Our role as a conservation easement facilitator is to protect all of a landowner’s interests, but our particular practical expertise is in the guarding of both the economic integrity and uninfringed management of working farm, ranch or forest properties through the conservation easement process, while optimizing financial returns to landowners.
In most cases, we engage working-lands landowners interested in selling a conservation easement by a performance agreement, and are paid only if the terms of the agreement are achieved. AgLand gets paid at the time the landowner is paid for the completed transaction.
Please contact us for more information or to make an appointment for a free phone consultation.
WHAT A LANDOWNER NEEDS TO KNOW
What is a CE?
A conservation easement (CE) is a tax incentive vehicle created in the US Treasury regulations. Its purpose is to remove qualified rights from real estate. The conveyance of that right is a grant deed like any other real estate grant deed with one significant difference; the right conveyed cannot be used by the grantee. By becoming a grantee, the entity accepts the responsibility to watch and enforce what restrictions the seller has imposed on the land; forever.The grant conveyance is a liability rather than an asset.
To qualify, a right removed (like sub-division or parcilization rights) must achieve some resource conservation public policy on the books at either the local, state or federal levels. Almost anything imaginable can qualify, but in order to sell it, there needs to be an interested and capable buyer.
What do Land Trusts Do?
A land trust is an agent of the State. A land trust is a non-profit, non-government organization (NGO), chartered by a State and recognized by the IRS as a eligible to be a CE grantee, or receiver of a deeded conveyance. They are chartered solely to represent the interests of the public. Landowners interested in selling a CE do not need a land trust to construct or negotiate a deed. In fact, its not appropriate for a land trust, with its fiduciary responsibility to the public, to advise a landowner on conservation easement terms nor negotiate with a public or foundation funder on a landowners’ behalf.
One fundamental public service a land trust can provide, is to come to the property each year and watch and inspect to ensure compliance of (police) the deed restrictions, which is called monitoring. If a public funding program, provides capital for a CE purchase but does not have the capacity to carry out the monitoring, a land trust will be a necessary partner at some point in the process. If the CE deed is constructed properly and the land trust paid adequately, any land trust doing their job will take on the responsibility. At any given location there will usually be more than one land trust to choose from, although perhaps not more than one local one.
Land trusts typically do not supply the capital to purchase a CE, but they are often the deed grantee, which means they become responsible to ensure that the rights removed from the property are never exercised or used again. Government entities can also be the grantee, but regardless of whether the funder is public or private, land trusts usually become the funders’ agent to provide services to carry out the necessary tasks in a CE transaction like compiling a baseline report, administering funds to help a seller resolve title issues and commissioning an appraisal.
The money to purchase a CE comes from public programs and private foundations. Land trusts can be great advocates so long as their public charter is aligned with the needs of the landowner’s needs. For example if a land trust’s charter is about protecting agriculture and open space, there may be an opportunity for advocacy.
Land trusts can be great advocates in fundraising and garnering public support, but any land trust has a gross conflict of interest advising a landowner, both in terms of CE restriction and price. In addition it’s very rare for a land trust to have any practical understanding of agriculture, so in addition to the conflicts of interest, there’s usually a significant void of competency as well. Agricultural competency means a deep understanding of its complexity, particularly when it comes to red tape and regulations. If a land trust is charged with providing CE advise or drafting and negotiating a CE deed, keep in mind that in order to obtain funding, the funders’ goals must be incorporated in some way in the CE deed. How well that is done and how functional the ability for a farm or ranch to continue to exist after the CE conveyance, has everything to do with the negotiator’s passion for and skill in protecting agriculture, and that can only come from an understanding of its hardships and complexities.
Land trusts can also be great post-CE advocates of an agricultural land business. There are always opportunities for land trusts to participate in restoration projects and activities, and bridge relationships and connections between farms and communities. This is the greatest opportunity for a land trust to be intimate with land and communities, and their highest calling. But, in order for this kind of husbandry and community stewardship to develop, a land trust must be local.
Although a rare land trust may have significant private sector experience within their staff and board members, If they are perceived to be representing a landowner’s interests, they can loose their charter or their funding source. Land trusts tend to be perceived as landowner advisers, and often take on that role. But a buyer or buyer’s agent advising a seller is simply a lack of fiduciary integrity.