Conservation Easements-

Friend or Foe?

By: David J. Colligan, Esq.

The latest rage in land use management is the granting of conservation easements to land trusts. Prior to deciding whether this is desirable or not, the average landowner must know more about what an easement is and what rights are being granted. This article is meant to be a short primer on the law of easements with a discussion of what are the types of easements, duration and usefulness of the easement. This article does not take a position on whether granting a conservation easement to one of the approximately three hundred such organizations in this country is a good or bad decision.

Easements come in many forms. Most easements are granted through the use of a deed, are perpetual and "run with the land." Easements to public utility companies, cable companies, gas exploration and transmission companies, etc... that are written and filed are typically perpetual easements meant to affect the property in perpetuity. The land and easement affect is called the subservient tenancy. The person with the right to use the easement is considered the dominant tenant. The mere naming of these respective parties' interests indicates that the easement holder, when operating within the scope of the easement, has superior rights to the owner of the property. That is why it is very important that the scope of the easement be carefully defined and the goals set by the landowner are identified prior to drafting the Easement Agreement.

Some easements last for less than perpetuity. Easements that are created for the lifetime of one person usually are specified in writing that the person can continue to use it for only so long as they are alive, such as access or egress with the use of a common driveway. It is possible to create an easement without a document in writing filed with the County Clerk's Office. Such an easement is called a prescriptive easement and is created by continuous use over time without objection which makes it a close cousin of an adverse possession claim. That is why it is always best to specify understandings and consents that were verbally agreed on in writing between the parties and even filing a written document indicating that use of a property is by consent not by easement.

The difference between a consent and easement is that a consent can be revoked by the person who granted it at any time with or without good reason, while an easement cannot be terminated, except as provided in the Easement Agreement. There are many examples of consent which can take the form of a license to use the property. A ski lift ticket is a license to use the property for riding ski lifts and skiing on the property. Purchasing tickets to fish, hunt or other use is a form of consent that does not create a permanent easement. If you read the back of any ticket, it usually contains language such as, "This ticket may be revoked at any time for any reason at the owner's discretion."

When this author was in law school, the property teacher used a tired, old metaphor that described property rights as a bundle of sticks. Each stick represented an individual right. When someone asked to obtain an easement from you the landowner, they are asking you to sell them or give them some of the rights in your bundle of sticks. Gas transmission companies ask for the right to lay underground pipes. Electrical utility transmission companies ask for the right to string overhead lines supported by poles anchored in your property. Adjoining neighbors often ask for easements to put their driveway on your property as their's is not suitable for access and egress. The DEC sometimes asks landowners to give them public fishing rights which provides anglers access to the streambed and small amounts of bank surrounding the stream.

Currently, conservation easements require the landowner to give up the right to develop the property in perpetuity. This may include the right to fractionalize the property, and it may also include the right to let others come onto the property to enjoy the natural beauty of the property. Prior to executing a conservation easement, each landowner should talk with their attorney regarding what their goals are in creating the conservation easement and what effect it will have on future generations of the landowner's successors in interest, be they heirs or purchasers of the property.

That being said, a conservation easement can also play an important part of any landowner's estate planning. Typically the sale or gifting of development rights will reduce the land's present assessed value. However, the true value of a conservation easement may lie in its ability to reduce an individual's estate taxes upon one's death. In 1997, Congress amended the tax code by passing "The American Farm and Ranch Protection Act." ⁽¹⁾ This act added a new section to the tax code: "Estate Tax with Respect to Land Subject to a Qualified Conservation Easement." This section provides that if you own land subject to a qualifying conservation easement when you die, and you meet some additional requirements, then you can exclude from your federal estate taxes a percentage of the value of that land in addition to the reduction in value already attributable to the easement.

While the benefits may seem great, only certain conservation easements meet the strict tax code requirements, and it is essential that you speak to your attorney and financial planner before granting any conservation easement.

For more information, the author may be contacted at (716) 852-3540. David J. Colligan was assisted in this article by attorney Mark C. Poloncarz, who is a member of the Western New York Land Conservancy.

1. ) Internal Revenue Code § 2031(c)