The Conservation Easement Process

Champlain Area Trails
The Conservation Easement Process Summary

Step 1. Preliminary Discussion
Step 2. Site Visit
Step 3. Independent Legal Advice
Step 4. Easement Drafting
Step 5. Appraisal
Step 6. Donation Agreement or Purchase and Sale Agreement
Step 7. Board Approval
Step 8. Pre-acquisition due diligence
Step 9. Baseline Documentation Report
Step 10. Endowment
Step 11. Executing Easement – Closing
Step 12. Filing for Charitable Deduction on Income Taxes
Step 13. Monitoring

Step 1.   Preliminary Discussion The first step with a conservation easement is to meet and talk with you, the landowner. We want to be sure that you feel confident and comfortable with our mission and our compatibility with your goals. We will ask you for some basic information including the property’s location, size, ecological features, and current land use along with your goals, considerations, etc. If at any point after this initial conversation, you have questions, please call or email us.

Step 2.   Site Visit During or after initial discussions, we make an on-the-ground visit to evaluate and assess if we can help in conserving your property. We will tour the property, take photos and ask you questions about the property and your conservation goals. This visit is scheduled at your convenience.

Step 3.   Independent Legal Advice We do not provide legal or financial advice to landowners. We strongly recommend that you acquire legal representation and consult a financial advisor to understand the specifics of conservation easements as well as the tax implications of an easement. We will be happy to refer you to people we have worked with successfully in the past.

Step 4.   Easement Drafting Drafting the easement itself is typically a negotiation between you or your legal representative and us. Once we have discussed our respective ideas for future property management, we will work with you or your legal representative to draft a conservation easement specific to your property. The easement will be attached to the title of your property in perpetuity, thus it remains in effect when you sell, lease, or pass on your land. Therefore, it is essential that we work with you to create a legally enforceable document that provides protection to the conservation values of your land, while at the same time, enough flexibility that you, your heirs, and subsequent owners can continue to live and work on the property.

Step 5.   Appraisal If you donate the conservation easement and intend to deduct its value from your income taxes as a charitable contribution, the IRS requires you to substantiate the value of the donation through an appraisal. We recommend that you commission an appraisal as soon as possible after the easement has been fully drafted and its terms agreed upon by both parties. The appraiser will assess the value of your property with and without a conservation easement. The difference between these two values is considered the value of the easement. We will be happy to refer you to qualified appraisers.

Step 6.   Donation Agreement or Purchase and Sale Agreement Once we have agreed to the terms for the easement, we will enter into a donation agreement or purchase and sale agreement for the transfer of the easement. This contract lays out the terms of the transfer, will include the conservation easement as an attachment to the contract, and will be contingent on approval pursuant to Step 7.

Step 7.   Board Approval As a non-profit organization, we are governed by a Board of Directors, which sets the strategic direction of our mission and focus. The Board must approve each conservation easement project. Following the initial site visit, our staff will present your project to the Board for their informal approval so that we can draft the easement, contract for a survey if necessary, order an appraisal, and proceed with other processes. Following the signing of a purchase and sale agreement or a donation agreement, your project will be presented to that Board for its formal approval.

Step 8.   Pre-acquisition due diligence Once a contract has been signed, we will order a title report. If there is not a survey, we will require that one be completed. The survey will describe the property boundaries and anything specifically identified in the conservation easement including delineations of “Building Envelope Areas” which are where buildings and associated activities are allowed, of portions of your property not included in the easement, and of portions of your property over which specific restrictions apply. Grant funding may be available to pay or reimburse you for the survey.

Step 9.    Baseline Documentation Report The Baseline Document Report (BDR) documents the condition and ecological features present on the property when it is formally protected by the Conservation Easement. It describes the property’s historic and present land uses, man-made features, ecological features, wildlife use and habitats, soils, hydrology, geology, and scenic values. The most important part of the BDR is the documentation of the conservation values of the land, which are what the conservation easement itself is working to protect and what enables donated conservation easement to be tax deductible by the IRS. The BDR is required and can be the financial responsibility of the landowner. Landowners can contract with us to do the BDR as we are familiar with the process, and your property.

Step 10.    Endowment One of our responsibilities in accepting an easement is conducting monitoring visits each year per IRS regulation. As part of the commitment to the perpetual monitoring of the property, we require funds for an endowment of each donated easement. We may request a contribution, using a standard formula based on property size, distance from our office, preparation and reporting time, number of potential subdivided parcels, and several other items. This endowment is essentially a landowner’s insurance policy to guarantee the long-term enforcement of the conservation easement.

Step 11.    Executing Easement – Closing When all the above steps have been completed, the easement is signed, notarized and recorded at the county clerk’s office.

Step 12.    Filing for Charitable Deduction on Income Taxes Donors of conservation easements with a value in excess of $5,000 who wish to take a charitable deduction for their gift must report the value the gift on IRS Form 8283 (Noncash Charitable Contributions) and submit this form with your federal income tax return. The value of the gift will have been determined by the appraisal (See Appraisals section, Step 5). We must sign this form and require the Donor to provide a copy of the appraisal to us. Donors who claim a deduction of more than $500,000 must attach a complete copy of a qualified appraisal to the tax return for the year in which the deduction is first claimed. While we does not take a position on the value of your gift, we will not knowingly participate in a project where we have significant concerns about the tax deduction.

Step 13.    Monitoring Once a year, a member of our stewardship staff will contact you to schedule a monitoring visit of your conserved land. The staff member will spend an appropriate time on the property (usually 1-4 hours) to check that the provisions of the easement are being followed. Following the monitoring visit, the staff member will create a report of the property condition which you will be asked to sign. The report will be kept in our office and a copy provided to you. Our staff is knowledgeable about land management and, in addition to annual easement monitoring, will be available to you for stewardship and land management advice.