(How a property owner becomes a tenant)
"Perpetual = Forever"
By Rachel Thomas
email@example.com or 520-456-1008
Huachuca City, Arizona 85616
Every day I see articles about ranchers and other property owners placing a conservation easement (CE) on their property. I cannot believe that people are buying the load of junk being sold by the Nature Conservancy and Land Trusts. If you or someone you know is considering placing a conservation easement on their property I suggest you/they read the article (below) that I wrote about conservation easements back in 2000. For more information on CEs, visit the web site http://www.nmagriculture.org/Conservationeasmentsfrms.htm.
Conservation easements actually are not easements at all. Easements generally imply an affirmative use of land for roads, power lines, etc., for the benefit of a third party or the public. Conservation easements actually are covenants that stipulate a negative use of the land. Conservation easements prohibit the landowner from acting in a manner that will change the ecological, open, natural, scenic or historical aspects of the land. The negative use can include obligations imposed upon the landowner. Conservation easements are also known as scenic easements, restrictive easements, open-space easements, and development rights.
A property owner must understand that by granting a conservation easement, he is not only restricting the future use of his property, he is actually conveying an interest in the property to a government agency or Non-Governmental-Organization (NGO) such as The Nature Conservancy. The conveyance of that interest results in a reduction in value of the property because it creates an unusual type of undivided interest in the property that may give rise to future conflicts and it prohibits prospective financially beneficial uses of the property.
Some examples of the actual wording in a conservation agreement are:
1) The owner conveys to a NGO group such as The Nature Conservancy a perpetual conservation easement over and across the property. (perpetual = forever)
2) The purpose of the easement is to assure that the property will be retained forever as open space to provide for a diversity of wildlife habitat, education and agriculture and to prevent any use of the property that will significantly impair or interfere with these values. (This means prohibits prospective financially beneficial uses of the property.)
3) Livestock grazing may continue provided that it does not cause significant deterioration of stream banks, water quality, vegetative communities, or soil structure and composition. (What is significant deterioration of all these resources? Who makes that determination and what quantity and/or quality measurements will be used?)
4) The Grantee (The Nature Conservancy) has the right to preserve and protect the conservation values of the property. (This is a restatement of 2 & 3 above and puts all decision authority in the hands of The Nature Conservancy.)
5) The Grantee (The Nature Conservancy) has the right to enter upon the property at reasonable times (not defined) in order to monitor property owner (whose status is now that of a tenant) compliance with and otherwise enforce the terms of this easement. (This gives The Nature Conservancy absolute authority over the property and the tenant.)
6) If The Nature Conservancy determines that the property owner (now tenant) is in violation of the terms of the easement, The Nature Conservancy can demand corrective action sufficient to cure the violation. If the violation has caused injury to the property, the property owner (tenant) will be responsible for all cost to restore the property to condition desired by The Nature Conservancy. If property owner (tenant) fails to take corrective action within a short time frame, appropriate legal action will be initiated.
7) All legal cost incurred by The Nature Conservancy in enforcing the terms of the conservation easement including, without limitation, costs of suit and attorneys' fees and any cost of restoration of the property will be borne by the owner (tenant).
One has to ask, "Who would enter into such an agreement?"
Additionally, major agricultural financial institutions have discontinued the practice of making loans on any property, which has been encumbered [with] a conservation easement. These financial institutions recognize the risk involved in making such loans.
Because of the loss of management control by the landowner and the accompanying transfer of the management decisions to The Nature Conservancy, two dangerous scenarios exist:
1. The Nature Conservancy, through legal action, could acquire the property, leaving the financial institution without a secured asset.
2. If the owner defaults on his loan, the financial institution inherits the unidentified management standards (which could be costly), and run the risk of The Nature Conservancy applying the same legal action against the financial institution.
The Nature Conservancy, in a Nature Conservancy Pamphlet on Conservation Easements, identifies land ownership as a combination of privileges that allows landowners to exercise certain rights. Being allowed to cut timber, explore for minerals, dig a ditch, and build a house are all examples of a landowner's rights. A conservation easement restricts some or all of these rights in order to protect the habitat, flora, or fauna found on the land.
Further information provided in the Nature Conservancy Pamphlet is that the rights the owner relinquishes are transferred to an organization or body, such as a qualified conservation organization or government body, by a legal document called a conservation easement. When the document is properly drawn, signed, and recorded in the land records, the owner and future owners of the property can no longer exercise the rights relinquished in the conservation easement.
While there may be some benefits for some landowners in granting conservation easements, those instances are rare.
Prudence dictates that every landowner considering a conservation easement carefully explore the far-reaching consequences for entering into such a scheme. The complexity of the conservation easement demands that competent legal and tax counsel fully review and analyze any conservation easement proposal under consideration by a landowner. The landowner should carefully weigh the present benefit to be derived against the long-term burdens any such easement will place, not only upon himself, but upon his heirs.