Owning a plot of land with a conservation easement comes with a lot of benefits and some drawbacks, but how do they affect the land?
Lands with conservation easements are private lands that have been converted to conservation lands through an appraisal process. By converting the land to a conservation easement, the owner must adhere to specific environmental standards, which come with certain limitations and responsibilities.
The concept of conservation easements has been around for a while but it’s been gaining popularity in recent years. A primary reason for this is the societal shift towards adopting environmental values and sustainable living. This has led to many everyday citizens taking the initiative to protect their lands from invasive developments that cause harm to our national and global environment. With that being said, you should be fully aware of the specific conservation easement that is in place on the property you are assessing, as they can vary greatly depending on the condition and specifications of the land they’re on. To help you understand conservation easements, we’re going to take you through everything you need to know.
Conservation easements are acquired through either private individuals, non-profit land trusts, or the United States Federal Government. Before you commit to any property, you should carefully review all aspects of your easement to ensure the agreement you are signing off on is in line with your land intentions.
What Is A Conservation Easement?
Traditionally, conservation lands have always been established throughout the United States as land areas that fall under strict protection guidelines. This concept started in the early 1900s at the beginning of the Conservation Movement. During this time period, environmental activism was created as people first began taking notice of the harm caused to nature by human activity.
Pioneers of the Conservation Movement such as John Muir were key figures in giving momentum to this shift in human perspective and their activism led to many of the environmentally protected lands we have in the United States and around the world. It’s thanks to the Conservation Movement that we were able to establish the protection of natural treasures such as our National Parks, National Monuments, State Parks, and other conservation lands all around the country.
This sort of environmental thinking continued to echo through our society, which led to the concept of conservation easements in the later 20th century. As environmental awareness continued to expand in our society, everyday citizens began wanting to be a part of the shift to protect our environment and preserve the natural beauty of our country.
Since the concept of conservation easements was initiated, we have been able to preserve and protect nearly 25 million acres of land in the United States alone. This is achieved by private property owners and various land trust organizations taking it upon themselves to convert privately owned lands into conservation lands. By doing so, the land is put under permanent environmental protection and is managed and maintained periodically to ensure the natural aesthetics and qualities of the property stay intact.
With that being said, there are many different types of easements and classifications for privately owned lands that fall under conservation easements. You will find that some are designated for specific purposes such as habitat protection and others may be established with the intention of protecting certain natural resources. More on this later.
To help prepare you with everything you need to know about converting your private property into a conservation easement and all the responsibilities that come with it, we are going to take you through the entire process.
Land Conversion Process
Since typically most conservation lands have started out as private properties, they first need to be evaluated to determine whether they are worthy of environmental protection. To achieve this, the land must go through an appraisal process during which the land is reviewed by a representative of either a land trust or a government agency that specializes in easements.
It’s important to note that when you commit to converting private property to conservation land through an easement agreement that you are relinquishing certain rights to the land. The rights that you give up on your land will vary greatly depending on the type of land you have, its environmental significance, as well as the land trust organization you end up dealing with.
With that being said, before you begin hunting down land to initiate the land conversion process, you should reflect on the overall goals you have for your easement and have a clear long-term vision for the property.
Conservation easements are different depending on their location, which is why having an idea of what you want to achieve through this process will help you narrow down your search options and prevent you from wasting time on properties that don’t fit your needs.
Appraisal & Donation
Once you have established an idea of what kind of property you are after and what your intentions are, you can begin your search. In this situation, it’s always best to find a handful of options you can compare to each other so that you can evaluate the pros and cons of each property.
If you have found a property that suits your interests you can begin the appraisal process. To do so, you will need to contact an appraiser to evaluate the worth of the property to get an estimate of the dollar amount of the land without the easement. Since the value of a property with a conservation easement significantly drops once the easement is in place, you will want to have an estimate of what the land is before any restrictions have been put on the property.
Your appraiser will give you a figure for what your land is worth, at which point you will want to get an estimate of how the cost of the land will be affected by the restrictions that will be placed on the property.
The cost of your land without the restrictions subtracted by the cost of how the restrictions will affect the worth of your property will give you the final price for your easement.
You should know that by getting involved in a conservation easement that you are in many ways donating your private property. What this means is that you are not so much giving the physical land away for free but merely giving away certain rights to the property through to a land trust organization or the United States Government. This does mean that the land is still rightfully yours and you are the owner of the property.
By donating your land to the organization that you are dealing with you will come to an agreement about the rights that you are relinquishing - at which point a contract will be signed by both parties involved.
Before you commit to signing the contract, you should have a careful read of all the details of the document to ensure that you are fully aware of the rights that you are giving up on your land. To play it safe, it may be wise to have a lawyer look over the contract to get the second opinion of a legal professional.
There have been instances where certain organizations have taken advantage of donors during the appraisal process and have marked the value of the land significantly lower than it was actually worth. While most land trust organizations have honest intentions to protect the environment, you should always make sure you know what you are signing up for when dealing with something that gives up your rights to your land.
Once all documents have been finalized, your conservation easement will be in place and your land will be permanently be protected under the environmental conditions you agreed to.
Land Trust Organizations
The appraisal and donation process you go through will likely have been backed by either a land trust organization or the United States Government.
There are many organizations in our nation that specialize specifically in conservation easements. What you will find as you evaluate lands for your appraisal is that certain organizations are better suited for specific land classifications.
If you have already found a property that you are interested in converting on your own, you can begin to research land trusts that will be best suited for your specific type of land. This can benefit you greatly, as you are likely to have a much smoother transition during your appraisal and donation process.
However, you may be on the market for a conservation easement without having a private property on the table for conversion. In this case, you may be able to save yourself the hassle of hunting down property on your own by simply purchasing a property directly through a land trust organization.
A good way to think of land trusts that deal with conservation easements is real estate agencies that have specific environmental guidelines for the clients. With that being said, you will find that most land trusts are not as quick to take your money as a real estate agency.
The reason for this is that land trusts are generally non-profit organizations that are more concerned with selling their land to an individual that will respect the land and its environmental qualities - rather than make a quick buck. Here are some reputable land trust organizations to consider:
- The Conservation Fund
- Land Trust Alliance
- The Trust For Public Land
- The Nature Conservancy
- Agricultural Conservation Easement Program
Once you have found a land trust that suits your property desires, you can review the lands that they have available. If the representative of the land trust finds that your land intentions are in line with their environmental values, you should be given a go-ahead to acquire the land and your easement will be in place without the need for property conversion.
Private Property Owners
If you decided not to opt for converting private property into a conservation easement on your own, you will find that there are many private property owners on the market that are selling their conservation lands.
Given that the private property owner has already gone through the appraisal process and donated their land to a trust or the government, this saves you the hassle of needing to do all of the work yourself.
Much like with any property that you are assessing, you should consider what you are looking for when wanting to acquire a conservation easement from a private seller, as they will vary in their features, aesthetics, and - most importantly - restrictions.
Since the individual that is selling their land went through an appraisal process they will be affiliated with some sort of organization that represents their land. The conservation easement they agreed to will have restrictions on it, which they have agreed to in their contract.
You should be fully aware of any and all restrictions that are in place on the property to ensure that it meets your expectations. There have been instances of sellers trying to disclose this kind of information, as it tends to draw away many buyers.
In this sort of situation, you should review the contract associated with their easement very carefully. It’s highly advisable that you get in touch with the land trust organization directly to confirm all of the restrictions and guidelines with them.
Types Of Conservation Easements
As we mentioned above, conservation easements can vary greatly depending on the conditions of the property being reviewed. In addition, environmental easements for land can change depending on the region they are in and how much ecological impact has been done to the property.
With that being said, if you are interested in acquiring land with a conservation easement, you should first know what kind of environmental protection you want to have in place on the land.
A good way to help you in your search would be to reflect on whether your intentions are purely for protecting a parcel of land and its environmental qualities or whether you aim to build or even capitalize on the conservation easement.
Conservation easements can be versatile in some situations and you may find you are able to do more than one thing with your property. Here are some examples of types of conservation easements you will likely be dealing with.
Most conservation easements were traditionally established for the protection of our nation’s natural habitats.
The expansion of industrialization and human colonization led to a lot of destruction of habitats and the loss of countless plant and animal species. With that being said, you will find that a lot of conservation easements will have strict guidelines regarding the protection of local species.
It’s common for properties with conservation easements to have species that are at risk or even endangered on them, which could greatly affect the sort of rights you have to the property. Properties that have such a fragile ecosystem like this will usually require an intensive vetting process through your land trust to ensure that you will respect the surrounding environment.
However, in these situations, the property that the conservation easement is on typically has gorgeous scenery and an abundance of plant and animal life, which is one of the prime reasons that many aspiring homeowners choose to acquire such properties.
In addition, acquiring property that specifically helps wildlife and habitat can allow you to be a part of the change in this world that directly aids species rehabilitation.
Natural resources within the United States have never been more threatened than they are today. This tends to be one of the main incentives that private properties are converted into conservation easements or acquired by land trust organizations.
Pollution and waste from the industrial complex and urban environments have sabotaged a lot of vital resources and caused damage that can often never be reversed. The most common resource that has experienced this sort of damage is our freshwater channels. A common feature of many conservation easements is to have:
These freshwater channels are not only useful for our own use as humans but may also be part of a valued environmental ecosystem. In this case, your easement will likely have specific guidelines about protecting the freshwater that flows through your property.
One of the most traditional approaches for protecting land was started by the United States Government before the concept of conservation easements was even around; farmers were given incentives by the government to use their land specifically for food growing.
This concept was continued with stricter protocols when farming was adopted into conservation easement programs. The rise of industrial farming helped us create large quantities of food but at the cost of damaging our environment.
Improper farming practices during the 20th century led to a lot of ecological damage to our soil, as well as the pollution of our freshwater, which is why conservation easements have specific guidelines that highlight how farming techniques should be conducted.
A focus of this is to protect one of our most valuable resources: soil. Land degradation through poor farming techniques has caused catastrophic damage to our soil, which will take millennia to repair. There are various land trust organizations that specifically handle conservation easements for farming.
If you are considering acquiring a conservation easement for this purpose, it’s highly advisable that you pursue an agreement with a land trust that specializes in this department. In fact, one of the most reputable land trust organizations for farming is done by the United States Government through the Agricultural Conservation Easement Program.
Benefits Of Conservation Easements
It goes without saying that conservation easements are a bit more complicated than traditional land purchases. Properties with these classifications require a bit more work from the buyer and come with additional responsibilities.
However, by acquiring a property with a conservation easement, you also get to rejoice in a lot of benefits that come with the land - both for your own enjoyment, as well as the protection of the environment, which is why many activists get involved in such land programs.
To highlight all the positives that come with owning a property with a conservation easement, we are going to take you through all the ways that this land purchase will benefit you and society.
One of the key features that tend to go hand in hand with conservation easements is the natural aesthetic that comes with the property.
While not all properties with this classification have a natural beauty to them such as farmlands, many of them were established specifically for protecting plants, animals, and resources. With that being said, you may find that your yard feels much more like a wilderness area or even a nature park depending on the location of your easement.
It’s quite common for landowners with conservation easements to have wildlife casually roam their property. In addition, many of these properties have an abundance of lush greenery and may even be located within a forest.
This tends to be a calling for many people that want their retreat into nature to be right at their doorstep. If this is the type of living environment that you have always dreamed of having for your home, acquiring land with a conservation easement may be one of the best ways to achieve it.
Lower Market Value
Property values around the country seem to be through the roof these days. This has made the American Dream of owning your own home more of a fantasy than a reality.
An incredible aspect of lands with conservation easements is that the market value of the home tends to drop significantly! This means that you can acquire land to build your home or purchase a private residence at a fraction of the cost.
The reason for this is that the agreement tied to the easement takes aways certain development rights from the owner. While this may not be appealing to some investors and homeowners, it can actually be a huge selling point for others.
This is especially the case for individuals that long for living in a rural environment or simply people that want to buy property but simply don’t have the budget to afford a home elsewhere.
At first glance, a property with a conservation easement does not appear to be land that you can hope to make money off of. Given that the market value of the property drops, many investors seem to think that there is no way to capitalize on the land.
However, this is really not the case, if you are willing to consider alternative ways of making money outside of traditional real estate investments.
Given that a lot of conservation easements have to deal with farming specifically, this could be a great way to earn money off of your land. This is especially the case if you are acquiring a conservation easement that already has a successful farm up and running on it.
In addition, you can utilize the land to harvest renewable energy resources. Since clean energy is an environmentally sound way of harvesting resources, this generally does not interfere with local ecosystems and does not leave a major carbon footprint in the same way that non-renewable resources are harvested. You can potentially harvest resources such as:
With that being, you should carefully review the conditions of your easement to ensure that harvesting non-renewable resources does not violate your contract.
Alternatively, you can still capitalize on your conservation easement through a traditional mindset of a real estate investor. While you are likely to experience some limitations, you may still be able to reinvest in a private property set up on the easement by remodeling and rebuilding a home to be more glamorous and appealing to buyers.
So long as you are not violating your contract, taking this approach and reinvesting in a private residence located on a conservation easement could significantly raise the dollar value on the land itself.
You will find that many people that acquire properties with conservation easements do it solely for the purpose of protecting the environment. With land degradation, pollution, and habitat destruction plaguing our nation, private individuals have felt the need to be a proponent of change in this world by buying conservation lands and ensuring their protection.
This is a common trend among people that do not even aim to build on their land but rather set up the property to be free of any kind of development. The primary things that these private buyers and land trust organizations aim to achieve are to prevent:
- Oil drilling
- Strip mining
- Nuclear energy
- Toxic waste disposal
By preventing the industrial complex from acquiring our cherished conservation lands we are able to ensure that our wildlife and habitats are protected, natural resources stay free of pollution, and land degradation is mitigated.
The original concept of conservation lands was created for the purpose of outdoor recreation through environmental protection. Pioneers of the Conservation Movement envisioned a land where our most treasured natural wonders are kept safe from invasive human activity so that all people can go out and experience the magic of nature.
This led to all of our country’s national, state, and public parks being created for outdoor recreation. While not all properties with conservation easements are intended for public use, there are many that have established themselves for public outdoor activities.
This is a great way to encourage further outdoor recreation for all people to enjoy, as well as yourself. Some of the common outdoor recreational activities associated with conservation easements are:
- Trail running
- Trail cycling
Having nature at your doorstep is something that you can enjoy for yourself or share with others.
If you do open your private conservation land to the public, it’s best to have signage out that gives specific guidelines for the land so that visitors understand that they are still on private property. This should include all of the environmental restrictions that are in place on your easement by your land trust.
A major highlight of owning a property with a conservation easement is the tax incentives that often come with owning the land.
This is particularly common when the land you are donating has significant environmental value or vital resources that can benefit the public. With that being said, you should note that these tax incentives will be quite different depending on the specifics of your conservation easement.
The way the tax incentives work is that by lowering the overall value of your land through your easement, your property taxes will automatically be lowered based on the fact that the market value of your land has dropped.
In addition, an easement can actually lower the value of your home below tax thresholds, which adds another boost for tax incentives. This will be determined on a case-by-case basis, as each state will vary in property taxes.
If this is a key feature you are looking into for your conservation easement, it’s best to get a full appraisal of the land and its overall worth before you commit to the property. After you’ve received an adequate valuation of the land, it may be wise to consult a tax representative that can confirm the potential tax incentives associated with your easement.
While owning land with conservation easements does come with a lot of benefits, there are also some potential drawbacks that are worth considering before you acquire this kind of property.
Given the principles of environmental protection that conservation easements are based on, there will be certain restrictions associated with your land that will limit what you can do with your property. This particularly draws away many traditional real estate buyers, as these properties lack the freedom and versatility that most common properties allow.
With that being said, the general drawbacks that come with some conservation easements should not intimidate you at first glance, as restrictions for the properties vary across the board. You may find that your conservation easement has relatively loose restrictions that will not stand in the way of your intended land use.
However, there may be restrictions in place that can greatly interfere with certain land development projects, which is why you want to be fully aware of any limitations that the land has so that you know what you are in for when you acquire your property.
The biggest drawback that comes with conservation easements is the building restrictions commonly associated with these properties. This is the primary reason why conservation easements can be a tricky or unviable investment opportunity for real estate investors.
In addition, this can prove to be quite frustrating for private homeowners that want to expand casual developments throughout their property. You may find that your conservation easement has very strict guidelines attached to it and your ability to modify your land and pursue building projects can be confined to a very small space of the property.
It’s common to own conservation land with a very large property but be confined to only a tiny space of it, which may be no bigger than an average home in an urban environment. Here are some of the common building restrictions associated with conservation easements.
Buildings & Housing Units
If you are acquiring a conservation easement for residential use, there will likely be a very specific portion of the land that is available for building a home. This is often puzzling to many buyers, as the property appears to have so much versatility and space at first glance.
This means that you will not be able to build anywhere outside of the designated space and may even have restrictions on remodeling a residence that already exists on the property. Some of the common building restrictions are to prohibit:
- Multiple housing units
- Storage facilities
There are certain exemptions to these restrictions, however. If you can prove that your building developments are not interfering with the local environment and are not violating your conservation easement, then you should be able to get away with additional developments in some cases. In addition, if your conservation easement is on farmland, you can validate specific development projects that are required for the functionality of the farm.
Regardless, the development restrictions with these properties can prove to be challenging to overcome or even impossible in many cases. The best way to be sure is to contact your land trust organization to seek approval for any additional builds you aim to pursue.
Fencing & Barriers
A very common restriction associated with conservation easements that are set up for wildlife and habitat protection is to limit or prohibit fencing and barriers around the property.
Given that these conservation easements were established to provide safe refuge and passage for wildlife, man-made fences and barriers can interfere with the animals of your local environment to access the property.
This tends to be a problem for homeowners that want to set up a certain level of security and separation from wildlife, as well as other household threats. This can be especially concerning in areas that have predatory wildlife that may be dangerous for household pets, children, and even adults.
In addition, many people enjoy having fencing around their property simply for having a sense of privacy within their homes. Depending on the restrictions in place on your property, you may find that you have very limited means of setting up barriers around your land.
When acquiring a conservation easement, the general idea is to sell the entire property as one package, which is not intended to be divided or split in any way.
This is a major reason why most real estate investors do not bother wasting their time on conservation easements, as you are likely to have a huge plot of land that can only be sold off as a single unit.
Land trust organizations make this a key feature of conservation easements to eliminate the temptation of real estate tycoons coming in and buying up a bunch of cheap lands, which can then be sold off individually for greater profit.
Low Market Value
While the cheaper price tag of conservation easements is a huge plus for many aspiring homeowners with a smaller budget, this can also be a huge drawback for receiving a return on their purchase.
When most common homeowners search for land, they don’t just look at the cost of the property at face value and commit to the purchase. It’s always wise to observe market real estate trends of the area to see if the property value of the home will increase over time.
While most individuals buy a home to live in it for the rest of their lives, many landowners choose to change their homes over the years. In addition, this could be problematic for people who have financial issues later on in their lives and need to sell their homes at the same price they bought them for.
What you will find with just about every conservation easement is that they are generally located in a rural area. While many people seek out conservation lands because they want to live in a remote place in the countryside, these sorts of living environments often lack a lot of essential amenities and conveniences that come with urban living.
It’s common to see conservation easements located in the middle of nowhere or at the very least, well outside city limits. This means that to have access to basic things such as groceries, shopping malls, and social gatherings could be a long-distance away from your home.
In addition, having access to things such as high-speed internet may also prove to be challenging.
You should also be wary of road conditions leading up to your property. If you live in an area that has poor road conditions, it’s common that the maintenance of roads and other utilities may be less frequent.
The bottom line with conservation easements is that they can be a hassle! These are by no means your typical land purchases and require a lot more time and energy from your end.
The amount of paperwork and procedures that need to go into acquiring a property with conservation easements can cause a headache to say the least.
You will likely experience red tape with a lot of your additional developments and property modifications. In addition, if your conservation easement is on a property that has a very fragile ecosystem or natural resource, there will be quite a lot of pressure on you to not cause any damage.
This is why many land buyers tend to be wary of conservation easements, as they can often be much more trouble than they are worth. Moreover, failure to adhere to the guidelines of your agreement could result in severe penalties and even legal action.
About THE AUTHOR
James Parker has a Masters degree in Sustainability with a focus on land management, permaculture and regenerative agriculture. He also has experience managing sustainability projects, and is passionate about conservation and sustainability.Read More About James Parker