Conservation Easements – Considerations for a Landowner
Conservation easements are a tool often used in Maine to protect open or undeveloped land. Conservation easements are employed to protect such attributes as wildlife habitat, scenic vistas, historic features, outdoor recreation, and traditional uses such as timber harvesting and agriculture. In the forests and farmlands of Maine conservation easements can be a very attractive option for landowners.
Maine law authorizes the use of conservation easements (Title 33 M.R.S. section 476 et. seq.) and sets forth the requirements to make them legally binding. There are also federal requirements, notably in the federal tax code, that must be adhered to in order to receive a deduction as a charitable donation. The easements are effectuated by a transfer, either through a sale or gift, of development rights to a qualified entity, known as the easement holder. Governmental conservation agencies, and land trusts are common easement holders.
There are registration and monitoring requirements that must be met. Generally the holder of the easement carries out the monitoring to assure compliance with the terms of the grant. A third party may also carry out such duties, if it is specified in the easement document as having enforcement rights.
After the grant of the easement, the landowner retains ownership and can sell or otherwise transfer the land to others; however, any future owner takes the land subject to the restrictions set out in the easement document. There is flexibility in tailoring a conservation easement to meet a landowner’s goals, whether they involve leaving the land largely undisturbed, or allowing certain uses such as sustainable forestry or limited residential development. Public access rights can also be granted to ensure educational and recreational opportunities. The details are always worked out between the landowner and the holder of the easement.
Conservation easements often reduce the real estate property tax burden of the landowner, with the easement restrictions serving to reduce the tax assessed value of the property. This can also be a double-edged sword, with the reduced value also potentially reducing a landowner’s ability to borrow from a bank using the land as collateral. Whether or not a conservation easement makes sense for a particular landowner or parcel (not all parcels have attributes which a qualified holder requires) depends on many factors. Serious consideration should be given to the advantages and disadvantages of encumbering a tract with a conservation easement. The advice of a qualified real estate attorney and tax professional should be sought before entering into any binding agreement.
These materials have been prepared by Rudman Winchell for educational purposes only. They should not be considered legal advice. The transmission of this information to you is not intended to create a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should not send any confidential or private information to Rudman Winchell until a formal attorney-client relationship has been established, in writing.