What exactly is a conservation easement, anyway?
A conservation easement is an agreement between a landowner and a qualified land trust, conservation group or government agency regarding the future uses of private property. As a private property owner, you have a number of private rights that go along with the ownership of your property. By granting a conservation easement, you agree to give up some of those rights. In a conservation easement, the owner of the property, also known as the Grantor of the easement, retains all rights of ownership not specifically prohibited or limited by the easement. These include the rights to exclude public access and to sell the property. The easement holder, or Grantee, on the other hand, only has rights specifically included in the easement. The rights typically granted by the landowner to the easement holder include the right to some or even all development and the right to monitor the property on a regular basis for any activity that is inconsistent with the purposes of the conservation easement.
The Rangeland Trust’s conservation easements are tailored to fit a landowner’s individual situation, and the terms of the easement are established only after detailed discussions between the landowner and the Rangeland Trust. Landowners continue to have complete control over public access to their property after the completion of a conservation easement.
What does a conservation easement do to the value of my land?
As explained above, a conservation easement sweeps off some of the rights that normally come with ownership of land. Those rights have a value and are determined by an appraisal. Theoretically, the value of the easement is the diminution in the current market price of the property caused by the restrictions contained in the easement. In fact, we are seeing a strong market in some regions for conservation properties (those with an easement) selling for prices which approximate those of similar lands not encumbered by an easement.
How is the value of an easement determined?
An appraiser will perform an analysis of the market value of a property based upon the “highest and best use” of the land and what similar properties in the area are selling for without the encumbrance of an easement. The appraiser compiles recent comparable sales of lands in the area to determine the approximate market price of the property. This is known as the “Before” value, i.e. the value before an easement is placed on the property. The appraiser will then determine the value of the property with the restrictions in place. Most of the time this means that the appraiser will look at properties that do not have the potential to be developed beyond what the easement allows on the property he is appraising for the easement. This is referred to as the “After” value – the market price after the easement is placed on the property. The difference between these “Before” and “After” prices is the value of the easement.
What amount can I expect to receive from a conservation easement?
The value of a conservation easement is based upon both the extent of the restrictions a rancher spells out in the easement and the market for land in a given region. The more development rights a landowner gives up, the more the easement is worth. Also, the market for both properties with development potential and conservation properties vary from region to region. Typically, most ranchers who give or sell easements only reserve the right to build a limited number of new residences to accommodate family members so that they can live on the ranch and help with its operation. As a general rule in these cases, the easement value will run from 35 to 65 percent of the market value of the property without the easement. However, there are many variables and we have seen the range of easement values span from 20 percent all the way to 90 percent in rare cases.
Does a conservation easement mean that the government will have more oversight over my land?
No. A conservation easement is an agreement between the rancher and the Rangeland Trust or other qualified land trust. The Rangeland Trust, in cooperation with the landowner, monitors compliance with the easement conditions and does not share that information with government agencies or the public. Occasionally, funds for easement purchases are made available by government programs that require reports from the land trust regarding easement compliance and may even have conditions where an easement would revert to a government agency should the land trust cease to exist as an entity or be unable to carry out its easement monitoring responsibilities. However, the landowner always has the option to decide whether or not to accept these funds with their conditions. The Rangeland Trust will always discuss the pros and cons of any funding program with the rancher prior to accepting any money for an easement purchase.
I’ve heard horror stories about radical environmental groups being able to sue ranchers and land trusts over environmental issues because there is an easement on the property. Is this true?
In fact, a lawsuit over endangered species violations or habitat destruction can be filed whether or not a property has a conservation easement. Because an easement is a recorded document, it is true that any member of the public can have access to the easement document and find out what restrictions are placed on the property. Lawsuits are uncommon and generally can occur only if the easement holder fails to monitor and enforce compliance with the easement conditions.
The Rangeland Trust works hard with ranchers to make sure that each easement anticipates their long-term needs for the future and that they are comfortable with all terms and conditions of the easement. In addition, the Rangeland Trust has a process in place to ensure that if a ranch is ever sold, the new owners are made aware of the easement and the Rangeland Trust’s role as an easement holder. All these steps help minimize the potential of a legal action from a third party.
It has been the experience of land trusts in California and other states, that rather than make a property more vulnerable to outside attack over restrictions, ranches with easements are generally the last to be scrutinized for violations because outside groups and government agencies realize that ranchers who have easements are supportive of conservation and are good stewards of the land, and furthermore, having a land trust as a “conservation partner” ensures sound management of all environmental resources on the land.