Timing a
conservation easement transaction can be critical in meeting a
landowner’s tax needs, preparing for estate purposes or divestment
plans, meeting neighborhood or family goals, or structuring a real
estate sale. It is best to contact Dutchess Land Conservancy as
early as possible when considering a conservation easement for your
property. DLC will work with you to develop the terms of the
easement based on your plans for the property and will try to make
the process as enjoyable and streamlined as possible. Below are the
steps involved in donating a conservation easement to DLC.
Donating a Conservation Easement – How It’s Done
Initial Contact
The conservation
easement process usually begins with a phone call to our office.
The office manager can connect you with staff who can explain the
conservation easement process, DLC’s conservation easement
acceptance criteria, potential tax benefits, and answer any
questions you may have about conservation easments or DLC.
Site Visit
The next step is for
staff to arrange a convenient time to visit your property. If you
are available, we prefer walking the property with you as no one
knows a property better than the landowner. Otherwise, with your
permission, we are happy to visit the property on our own taking our
resource maps in order to get a good sense of the land. While on the
property we assess the important resources to be protected as well
as potential locations for future reserved house sites. While
there, DLC also assesses whether a potential easement on the
property will meet its Conservation Easement Acceptance Criteria.
CONSERVATION EASEMENT ACCEPTANCE CRITERIA
Land Planning Analysis
While some
landowners know exactly what they want for the future of their land,
others need assistance to help them determine what makes sense for
them. DLC can work with landowners to plan development that will
not compromise the important open space and natural resources on the
property. Planning for some limited development can help address
family and financial goals and still accomplish the preservation of
the overall open character of the land. DLC starts by preparing
some base maps of the property and conducting a resource analysis to
determine specific areas that are important to protect. If a
landowner wishes, DLC can conduct a land planning analysis to
determine the best places for limited development on the property.
If you and DLC decide to proceed with a conservation easement, this
analysis can be used as the basis for a conservation easement map.
The
conservation easement map designates areas for buildings (building
evelopes) and the areas of the property to be protected
(preservation areas) and is attached to and recorded with the
conservation easement.
Draft Conservation Easement
With your assistance
and input, DLC will draft a conservation easement for your review.
This document will set forth the restrictions to be placed on the
property that will ensure its protection. For example, depending
upon the size of the property and the resources to be protected, we
will work with you to determine whether the easement will allow the
property to be subdivided, whether additional principal residences
will be built, where building is allowed to occur and areas that
should be left untouched and natural. Easement negotiations and
achieving the final easement draft is a collaborative process. We
are happy to work with you personally or your representatives on the
easement terms. This collaboration ensures that your plans for the
property together with DLC’s conservation goals are integrated into
the final document.
Seeking Advice from Your Financial and Legal Advisors
Throughout the
conservation easement process, we strongly recommend that you work
with your financial and legal advisors. Placing a conservation
easement on land is a commitment that is forever and thus can have
significant legal and financial effects. We want to ensure you have
considered all of the pros and cons ahead of time. We are happy to
consult with your advisors at any time during the process.
Appraisal
When a landowner
donates a conservation easement, the donation is considered a
charitable gift by the IRS and can potentially be tax deductible.
If you are interested in taking a tax deduction for donating a
conservation easement, an appraisal by a “qualified” appraiser is
required to satisfy IRS requirements. Most landowners will request
a preliminary appraisal or preliminary “opinion of value” to
determine whether the conservation easement can qualify for a tax
deduction. The appraiser will determine the value of the property
before the conservation easement and the value of the property with
the easement in place. The
difference in these two values equals the value of the charitable
gift. DLC has a list of qualified appraisers that it can provide to
landowners as a resource. TAX BENEFITS
DLC Board Approval
After working with
you on the terms of the conservation easement, staff presents the
easement to DLC’s Board of Directors. The Board reviews the
easement and votes to accept it or may request modifications by the
landowner. All conservation easements must be voted upon by DLC’s
Board before they can be recorded.
Baseline Documentation Report
As part of the
conservation easement process, DLC creates a Baseline Documentation
Report. This report consists of detailed maps and photographs of
the property and includes a summary of its important resources. The
purpose of the report is to document the condition of the property
at the time that the easement is finalized. This report helps DLC
monitor the changes to the property over time, is required by the
IRS for tax deductible easements, and also provides you with a
wonderful account of the property and all of its important
characteristics. The Baseline Documentation Report is signed at the
time the conservation easement is executed and both the landowner
and DLC certify that it is an accurate and current account of the
property.
Final Easement
The final
conservation easement is the legal document that will be recorded
with the County Clerk. Recording the conservation easement is
required by New York State law for the easement to be effective and
it ensures that each subsequent landowner knows about the
conservation easement in order to comply with its restrictions.
The Closing
Once the
conservation easement and baseline documentation are in final form,
we are ready for the closing. Usually, we will close the
conservation easement at DLC’s office, but depending upon your
availability, we can close at another location or by mail. All
documents are signed by the landowner and DLC and are notarized.
Landowners receive a fully executed copy of the conservation
easement and a baseline documentation report for your files. DLC
staff will record the conservation easement at the County Clerk’s
office and send you a copy of the recorded easement once it is
returned to our office.
Stewardship Endowment
Once DLC accepts a
conservation easement, we have an obligation to monitor and enforce
the easement in perpetuity. In order to help cover the expenses
associated with monitoring and enforcing our conservation easements,
we request that each conservation easement donor contribute to our
Easement Stewardship Endowment Fund. The amount of the request is
based on DLC’s formula for determining our annual costs to monitor
and oversee each easement. This fund helps ensure that we will meet
our stewardship obligations to you and to the public. STEWARDSHIP
Monitoring and Enforcement
After the closing,
DLC’s stewardship obligations begin. Once a year we will provide
you with notice that we are planning annual aerial monitoring of our
conservation easement properties. DLC staff and a local pilot fly
over all our conservation easement properties in the winter when the
leaves are off the trees and the properties are the most visible to
ensure that the conservation easement obligations are being met.
Additionally, once every three to four years, we will give you
notice that we would like to ground monitor your conservation
easement at a time that is convenient for you. You are welcome to
accompany us on our ground monitoring visit or we are happy to
monitor the property on our own.
Relationships
DLC strives to
maintain cooperative relationships with every conservation easement
owner. Upon signing an easement you become one of our “Stewards of
the Land”. We encourage landowners to contact us if there is any
question regarding the conservation easement terms or permitted uses
of the property. All easement owners are invited to our educational
events, which provide information to help further the stewardship
and care of their property. We treasure our conservation easement
owners as we know that they are vital to the success of DLC and our
efforts to conserve the rural, scenic and natural character of our
area.
If you are
interested in learning more about conservation easements and DLC,
please contact us at (845) 677-3002.
This information does not constitute legal or tax advice and DLC
strongly recommends that you discuss your land conservation options
with legal and tax professionals.
