Frequently Asked Questions about Conservation
Easements
We've provided answers to the most frequently asked questions
about permanent land conservation easements. If your question isn't here,
please contact the Land Trust for
the information you need.
- Does the Land Trust offer different types
of easement options?
- Does "Smart Growth" zoning negate
the need for this type of land conservation?
- Does the public have a right-of-access to
easement-protected property?
- Does the easement have to cover all of the
landowner's property?
- Can you explain a Purchase of Development
Rights (PDR) program, and does LTV have such an initiative?
- Does LTV provide any written information
on land easement issues?
- View Sample Easement.
1. Does the Land Trust offer different types
of easement options?
Yes, quite a few:
Donation of land
An outright gift of land for conservation is one of the most
generous legacies a landowner can make to future generations.
Throughout Virginia, there are parks, shorelines, forestlands,
and scenic open spaces that the public enjoys because of the long-term
vision of conservation-minded landowners.
Donating land can have many benefits for a landowner. It can
be a relatively simple and quick transaction that:
- Assures the permanent protection of a family
property;
- Provides a charitable income tax deduction
for the full fair market value of the land;
- Avoids capital gains taxes on appreciated land,
which otherwise would be due at the time of a sale;
- Removes the property from the donor's taxable
estate;
- Releases the donor from the expense and the
responsibility of managing the land; and
- Provides long-term support for the Land Trust.
The Land Trust believes that, in most cases, private owners are
the best long-term managers of land. Therefore, when the Land
Trust receives a gift of land with conservation value, it places
a permanent conservation easement on the property and sells the
land. The Land Trust uses the proceeds to protect other conservation
lands throughout Virginia. In cases where land provides important
public benefit, the Land Trust will consider conveying the gifted
property to government agencies, to ensure that the public will
own and enjoy the property for the long term.
Donation of a remainder interest
A landowner can donate land and continue to live on it during
his or her lifetime. This is known as a gift of a remainder interest,
or a gift of land with a reserved life estate.
With a gift of a remainder interest, the donors and their beneficiaries
reserve the right to continue to live on and continue to use
the property during their lifetimes. At the end of the specified
life interests, full title and control of the property automatically
transfers to the Land Trust. In most cases the Land Trust resells
the land, subject to a permanent conservation easement. Thus,
the final outcome is very similar to that of an outright gift
of land.
The donation of a remainder interest offers several advantages:
- The donors continue to use and enjoy the property throughout
their lifetimes;
- The property is permanently conserved;
- The donor may be entitled to an income tax deduction when
the gift is made, if the property is a personal residence, farm,
or land having conservation value; and
- The proceeds from the sale of the property will support the
Land Trust's statewide land conservation program after the life
interests conclude.
Bequest and living trust
Many landowners wish to retain maximum flexibility during their
lifetimes and choose to carry out their conservation plans through
a bequest or a living trust. Landowners can conserve important
lands by donating property or donating a conservation easement
through their wills.
A bequest is a provision in the landowner's will or a codicil
(an amendment to a will) that instructs the estate's executor
to convey land or a conservation easement to the Land Trust.
A living trust can achieve the same results but avoids the probate
process.
Both the bequest and the living trust can assure the permanent
protection of the land, permit the donor to control the property
during his/her lifetime, and may reduce the donor's taxable estate.
In either case, the terms of an easement can be developed through
discussions between the landowner and the Land Trust to achieve
the goals of both.
Bargain-purchase of easements and land
Another approach with advantages to both the landowner and the
Land Trust is a bargain-purchase. The landowner sells a conservation
property or easement to the Land Trust at less than full market
value and donates the remaining value. For the landowner, this
combines the income-producing aspects of a land sale with the
tax benefits of a donation. The difference between the fair market
value (as determined by appraisal) and the sale price is treated
as a charitable contribution, and can significantly reduce any
capital gains taxes payable on the sale. For the Land Trust, bargain
purchases make land and easement purchases more affordable.
Purchase of land
Occasionally, the Land Trust is called upon to protect a property
that has exceptional resource value of local, regional, or statewide
significance. Such purchases depend on public and private fundraising.
The Land Trust rarely retains ownership of the land for the long-term.
In some cases, our role is to facilitate public ownership - we
will convey properties to public agencies to be used as public
recreation areas, state wildlife areas, state or national forests,
or historic sites. Other lands may be sold to a private landowner
subject to a conservation easement that permanently conserves
the land's resource values. In rare circumstances, the Land Trust
will also use this approach to conserve uniquely important farmland
that is at risk of development.
Right of first refusal or option
These two techniques provide for future land conservation. When
the owner of an important conservation property cannot afford
to donate or bargain-sell the property to the Land Trust and is
not ready to discuss a conservation plan, the owner might consider
a right of first refusal. This right provides the Land Trust with
the opportunity to match a purchase offer received by the owner
at a future time if and when the owner elects to sell the property.
An option agreement is a contract under which the owner offers
the Land Trust a fixed period of time (normally a period of
three-to- twelve months) within which to make a decision to
purchase either a conservation easement or the property outright.
The Land Trust is not required to exercise its right to purchase
but can, instead, use the option period to develop a conservation
plan and seek funding sources to conserve the property. The
option agreement either specifies a fixed purchase price or
identifies a method - such as appraisal - by which the purchase
price will be determined. An option can also provide for a bargain-sale
of the easement or conservation property.
For more information on any of these programs, contact the Land
Trust.
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2. Does "Smart Growth" zoning negate
the need for this type of land conservation?
The short answer is, no. Unlike easements, public policy is
not implemented in perpetuity. Political moods can and do change,
and one legislative body (e.g., a Board of Supervisors) can
change the plan and intent of another.
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3. Does the public have a right-of-access
to easement-protected property?
The public does not have access to property protected by an
easement unless the original landowner who grants the easement
specifically allows it. Most easement donors do not want and,
therefore, do not allow public access to their property.
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4. Does the easement have to cover all of
the landowner's property?
No, some easements only cover a portion of the landowner's
property. Again, it depends on the landowner's wishes. For example,
if someone owns 100 acres, of which 35 acres are wetlands, the
landowner may decide to restrict development only on these 35
acres. The remaining 65 acres would not be covered or affected
by the easement.
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5. Can you explain a Purchase of Development
Rights (PDR) program, and does LTV have such an initiative?
At its most simple, a PDR program involves buying development
rights from a property owner to ensure that the land is kept undeveloped
and doesn't add to infrastructure costs. The owner retains all
rights other than the right to subdivide for other than agricultural
uses.
At the current time, the Land Trust of Virginia does not have
a PDR program. There are, however, PDR programs under discussion
throughout the state. Indications are that the number of such
programs will multiply as state and local authorities realize
that it is a valuable tool for land conservation.
County governments find PDRs attractive because land that is
kept in agriculture tends to cost much less in terms of services
and infrastructure required. For example, in Loudoun County,
the average home will cost approximately $40,000 more over 15
years (not including transportation costs) than is paid in taxes.
In a typical scenario, the county might pay $20,000 to buy development
rights and realize a savings of $20,000 that would have been
spent in services.
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6. Does LTV provide any written information
on land easement issues?
The following Technical Bulletins are made available courtesy
of the Vermont Land Trust and have been adapted for our state.
Contact the Land Trust for written copies or click to view the
information online.
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