Standards & Practices

Issue 5 – Conservation Easement Stewardship

Discussion

Conscientious stewardship is critical to any conservation project. However, even before the easement is taken and stewardship responsibilities begin, a land trust must ensure that there will be sufficient funding and resources available for the task. The land trust must first determine whether or not to accept the easement. To make this judgment, the land trust board and staff members must first decide if the project will adequately address at least one of the "conservation purposes" defined by Treasury Regulation §1.170A-14(g)(5)(i). Next, it is important to consider whether the project will further the mission and long-term goals of the organization. Finally, the staff and board should decide if their organization will serve as the best easement holder, if the organization has the capacity (staff or volunteer) to carry out monitoring, how complicated monitoring will be, the potential for violations, and whether or not the land trust has or can raise funds for adequate monitoring and defense.

Addressing the issue of funds needed for perpetual stewardship and land protection can be very challenging. Unpacking this complex issue begins with determining stewardship costs. According to the Land Trust Alliance, the land trust must evaluate costs - and potential costs - associated with major stewardship activities (Standard 11: Conservation Easement Stewardship):

  • Baseline documentation, monitoring and landowner relationships
    • Staff/consultant/volunteer time
    • Travel expenses
    • Maps & photos
    • Administration
    • Special monitoring provisions
    • Requests for use of reserved rights
    • Grantee approval provisions
  • Enforcement to correct violations
    • Time
    • Professional and legal costs

The first big question is: How much is enough? The answer is never easy. The strategies for arriving at that answer fall into three categories: 1) case-by-case calculation of projected annual costs; 2) base rate modified for acreage and complexity; and, 3) amount based on percentage of value. Using the first method, the organization must estimate annual associated costs (mostly staff/contractor time) – figuring in enforcement expenses based on risk of violations – and then set up the stewardship endowment in an amount large enough to generate an annual rate of return (typically 5 %) that will cover those costs. If a base rate plus system is used, then factors such as acreage and complexity call for additional funds. Generally, those factors include issues related to the easement itself (such as allowed house lots, reserved rights, etc.), with the landowner (public or private; individual or family), or with public access requirements. Lastly, some organizations prefer to base the stewardship contribution on a percentage of value (e.g. 1 % of the assessed valuation prior to the transaction or $1,000, whichever is larger) (details and examples are available in Standard 11: Conservation Easement Stewardship).

Generally, land trusts establish and maintain a stewardship fund separate from the organization's operating budget. Even if stewardship costs are projected to be quite low, the land trust must account for and be prepared to cover potential enforcement costs. As unpleasant as it may sound, in a perpetual easement, there will come a time when professional services are needed and liquid resources must be available. Some groups choose to maintain a separate legal enforcement fund and others simply pool the monies to cover any and all needs related to stewardship and enforcement.

The next big question is: Where does the money come from? Generally, the donation of these funds is requested from the landowner at the time the easement is granted. Some land trusts use a system where the amount is paid out over several years. Still others accept non-cash donations which can be liquidated. Some land trusts have also seized opportunities to fundraise around a project, enlisting donations from the local community or the municipality to help protect a specific resource or particular parcel. Regardless of how the funds eventually materialize, the topic of establishing a stewardship endowment should be brought up early in landowner discussions. In fact, many land trusts use a policy statement or disclosure form right up front. Addressing this essential topic early helps avoid any surprises for the landowner granting the easement or damaging a budding or even long-term relationship with the landowner. Watch for upcoming Standards & Practices education and training opportunities including:

Hand-in-hand with financial considerations comes the need for careful documentation of the land and its conservation values. Baseline documentation and inventories are important for all easements and land conservation acquisitions. Baseline documentation reports not only contain a compilation of the subject property's attributes as they relate to the purpose(s) of the easement, they provide the very basis of future monitoring and the enforcement or defense responses that may arise. Moreover, they are required for any conservation easement involving a charitable deduction for a federal tax deduction on the part of the land owner and, therefore, should meet the requirements of Treasury Regulation §1.170A-14(g)(5)(i). Baseline documentation reports should be completed prior to closing, signed by the landowner and the land trust at closing. (Standard 11: Conservation Easement Stewardship). Baseline documentation records the condition of the property at the time of the easement acquisition and, as the name would suggest, serves as the baseline for measuring future changes in the property's conservation resources and other features.

Baseline reports document the conditions of natural features of the property and the presence and respective condition of any manmade improvements. As part of its recordkeeping policies, every land trust should have standard procedures for preparing, storing and handling baseline documentation (Standard 11: Conservation Easement Stewardship). The documentation should include photographs of landscape perspectives as well as key features and improvements, detailed maps or aerial photos (property boundaries, waterways, roads, structures, etc.), appraisal, and any other site-specific resource inventories. The Land Trust Alliance suggests, at a minimum, including the following information in baseline documentation:

  • date baseline documentation was prepared
  • authorship and qualifications
  • notarized acknowledgement statement
  • background information (e.g., ownership information, purpose of easement, historical information on the acquisition, etc.)
  • property description
  • easement summary
  • legal information (e.g., title report, copies of any relevant encumbrances or liens associated with the property, etc.)
  • conservation values
  • maps or plans
  • and photographs

Details should cover all particular conservation values to be protected by the easement: wildlife habitat, plant communities, ecological descriptions, viewsheds, etc. Complete and accurate baseline reporting documents are the best protection a land trust can have in the event easement violations necessitate legal action. As with any important documents, land trusts should have a standard policy and procedure for preparing and storing baseline documentation reports. At a minimum, there should be one copy of the baseline report for the landowner, one for the land trust's monitoring file, and one to be kept in a secure, fireproof location. Digital records are advantageous in many ways. However, computer records should be backed up and updated as technology changes.

Once the baseline documentation is completed, the land trust should put in place a sound monitoring plan. According to Standard 11: Conservation Easement Stewardship, monitoring policies should cover the purpose, frequency and method of monitoring; documentation and recordkeeping; who should monitor; pitfalls to avoid; and how monitors should be trained. Monitoring procedures should clearly describe each step of the monitoring process to ensure that all properties are inspected in a consistent manner regardless of who conducts the monitoring visits. At a minimum, monitoring should take place annually. However, more frequent monitoring may be required for complex easements, including those that: are unusually restrictive; reserve building or other substantive development rights; have many abutters; or include public access provisions.

Monitoring methods generally fall into one of two categories depending on the easement and the land parcel - aerial or onsite (which may be via boat as applicable). A land trust may use either of these methods for any of the organization's easements. Whether completed by land trust staff of volunteers, certain steps should be followed:

  • contact the landowner
  • compile and review materials
    • Aerial photo with property boundaries
    • U.S. Geographical Survey (USGS) topographic map (with property boundaries)
    • Survey or map of property bounds and features
    • Copy of conservation easement
    • Copy of the easement deed
    • Easement documentation report and past annual reports
    • Past use of reserved rights
  • conduct the monitoring
    • Any necessary items for aerial and/or onsite monitoring (including discussing details with the landowner): EDR, camera (plus extra film or digital storage media as necessary); easement inspection and landowner interview forms; field measuring tape and compass; flagging tape for marking boundaries or problems areas; and global positioning system (GPS) unit to document locational coordinates of any updated photography, problem areas or noteworthy exercise of reserved rights; and water, snacks, and first-aid.

Finally, for documentation, there are several critical elements to be included. Monitoring should incorporate an easement inspection form that includes: inspector details, date, property details, presence of landowner, and notes on the condition of the property (especially restricted areas). Also, all documents – specifically photos – should be labeled and filed. The landowner should be notified in writing after the site visit with indication provided of whether it appears to be in compliance. Lastly, record storage is also critically important. The Land Trust Alliance recommends keeping two sets of monitoring documentation – one in a working file, one in a secure fireproof location.

The technical aspects of project selection and stewardship are very important, but there is more to sustainable land conservation. Like so many things, good conservation work begins with relationships. Landowners should be viewed – and treated – as land trust partners. Your conservation work could not happen without them. Key elements to building and sustaining good landowner relationships include outreach activity, landowner recognition, and technical assistance. Moreover, the Land Trust Alliance recommends that every land trust has at least one person (staff or volunteer) dedicated to responding to landowner requests and inquiries. Contact with your partner landowners should be regular and congenial. Landowners with whom the land trust works should be notified of the organization's monitoring policy, understand it, and even participate in monitoring activities associated with their property. Doing so helps build confidence and trust in the easement, in the Grantor/Grantee relationship, and in the perpetual protection of the land's conservation values.

"I think that this (the relationship with the landowner) is the single most important function of a land trust holding easements. It is too easy to start looking at the landowner as an adversary rather than a partner. I think this can be especially true following change of property ownership or turnover of land trust staff (which is probably a more frequent occurrence)".

Wesley Newman, Katy Prairie Conservancy

However, even after your land trust has built a strong relationship with a landowner, there will naturally come a time when the land will change hands and a new relationship must be forged. Learning of land transfers may come as a result of returned mail, informal contact with realtors or neighbors, periodic checking of deed registries, or other means. Most land trusts require a notice of transfer from landowners as part of the terms of the easement. Needless to say, it's important for land trusts to have some effective means of keeping track of who owns the land and how well they understand the goals and intent of the conservation easement.

Because conservation easements are intended to protect conservation values in perpetuity, it is critical that the land trust holding the easement is able to adequately enforce and defend the terms of that agreement. Certainly, easement enforcement and defense protects the conservation values of the property. But, more than that, effective enforcement and defense engenders public confidence, maintains the trust's legal authority over the easement, and helps to ensure the organization's tax-exempt status. In the event of an easement violation or even a lawsuit brought by the landowner, a thorough record of the dispute will be essential. For example, easement violations should be documented with photos, measurements of damage, conversations and correspondences with the landowners, extensive notes (signed and dated) from an onsite monitoring visit, and explicit comparison of the monitoring report with the baseline data. Here, particularly, is where up-to-date, careful and comprehensive baseline documentation is important. The Land Trust Alliance recommends meeting with the landowner to respectfully inform them of the violation and work with them in making reparations. Further, the Alliance should be notified of any and all major easement violations.

"Conservation easements are written to last in perpetuity, but circumstances change over time" (Standard 11: Conservation Easement Stewardship). Amendments should be infrequent and approached with caution, but may be needed to clarify vague language, correct oversights or errors, allow for an unanticipated but acceptable use, add new provisions, or simply to incorporate changes in circumstances. If there comes a time when an amendment should be made to an existing easement, the land trust is well-advised to have a consistent and fair amendment policy in place. The land trust's easement amendment policy should "include both the organization's philosophy about amendments (including circumstances under which they would be considered) and the procedures for responding to an amendment request". Lastly the land trust should seek experienced legal advice regarding creation or modification of their amendment policy and on any easement amendments considered. (see also a recent report from the Land Trust Alliance entitled Amending Conservation Easements: Evolving Practices and Legal Principles)

The difference in Texas…

The land trust movement is still relatively young in Texas. But, thankfully, it's growing - with much of the growth occurring in the last decade alone. However, the burgeoning nature of our state's land trust movement creates some inherent difficulties for conservation easement stewardship. David Behm, an Honorary Member of the Texas Land Trust Council, aptly describes that challenge:

"Since the land trust movement is young in Texas, there is a general lack of experience in conducting easement stewardship. Because most easements in Texas have not yet been transferred to second or third owners, there are few case histories and experiences with easement violations or lawsuits brought by landowners. There is no case law regarding easement enforcement or defense situations. Accordingly, it is imperative to understand and learn from such experiences elsewhere in the country - regarding their trappings and failures as well as their successes so as to prepare ourselves for the range of easement stewardship challenges awaiting us. Further, such inquiry and consideration of others' experiences will afford us the opportunity to collaboratively and strategically enable ourselves to effectively enforce and defend our easements while ensuring open communications with our partner landowners for long-term and trustworthy relationships."

David Behm, Farmland Protection Program Manager – New York State Department of Agriculture & Markets

For those organizations that want more information about training and technical assistance related to Land Trust Standards and Practices, please contact the Texas Land Trust Council's Excellence Program Manager, Tommi Ferguson, at (512) 796-1224.

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