February 21, 2008
Conservation Easements in Perpetuity are for
a Long, Long Time
By Clarice Ryan
Perpetuity is a long, long time. How can anyone prepare completely
for the unpredictable future and how can anyone make wise, unchangeable
decisions for others over extended fluctuating times and conditions?
Every property owner has a vision for his land and the right to
determine what to do with it and how to administer it. The term
perpetuity locks in forever his personal desires and decisions
that will rule his heirs and all future owners. If he loves his
children he will not encumber them with a binding contract over
which they will have no control.
Tax dollars finance extensive federally held lands, now approximately
50% of the United States, with costs becoming exorbitant and prohibitive.
Now catastrophic fires are consuming poorly managed overgrown
federal forests. Tax payers can no longer afford fire-fighting.
Supposedly cost saving “just let it burn” policies are
now destroying our timber, wildlife and environment.
New innovative strategies disguised as “saving” the
environment, are now placing private land under government control
while leaving all bills with property owners. The conservation
easement is just such a scheme. The non-profit, non governmental
agency (NGO) commonly known as the land trust develops binding
contract terms incorporating land owner input and desires, while
offering appealing financial benefits (bait). The true objective,
however, is to place the owner and his property under management
and control of the land trust but essentially the government in
the course of perpetuity.
The property owner retains title and specified uses of his land,
certain tax advantages and possibly other monetary perks in exchange
for his generosity and good will. What a satisfying arrangement!
Of course he has permanently acquired a “bossÏ to oversee
and supervise his every action while committing himself to all
ongoing financial obligations: maintenance, taxes, insurance and
any future environmental demands. Actually the bait has been offered,
taken and the hook sunk deeply in perpetuity.
The public is exceedingly appreciative of “Open Space,” viewscapes, wildlife habitats and refuges thus achieved. The community is grateful. The skillful sales representative creates an almost euphoric vision verging on patriotism combined with the warm fuzzy feeling of doing something wonderful for the environment. The presentation is tailored to a variety of owner interests. Those financially secure, with little concern over possible future financial adversities, happily envision their land forever remaining the same for their own enjoyment and that of others.
On the other hand, many farmers and ranchers depend on the
land for their livelihoods in spite of ever increasing global
competition and decreasing annual profit margins. They are likely
seeking temporary financial relief until times hopefully get back
to normal. They give no thought to this being a one-time only
perk never available to future operators. Others having reached
an age where they can no longer farm, seek financial security
enabling them to remain on their beloved land until such time
as it passes on to their children. They traditionally believe
that their “kids” can eventually do anything they want
with it. Not so! Decisions have already been made for them in
a contract forever locking them and all future owners into terms
they likely were not involved in developing.
Property owners accept that the land shall always be farmed; however
their offspring may choose lucrative, satisfying livelihoods elsewhere
with little intent of returning to the home place. They will inevitably
tire of paying the expenses on property they seldom see, while
changed circumstances may even make it impossible pay. It is assumed
that they could then simply sell the farm. However, the conservation
easement assures a lower market value than adjoining unencumbered
properties priced higher partially due to scarcity. Also the larger
the piece of property the fewer the prospective buyers. Some may
willingly invest in 20 to 30 acres of “cheap” vacant
land to assure privacy for a single home meeting contract specifications.
However buyers are scarce for hundreds, perhaps thousands of
acres locked into agriculture and limited to one or two residences.
If eventually surrounded by residential development and highways,
needed access for farm machinery is prohibitive. It becomes a
virtual weed-covered wasteland requiring heavy insurance to cover
inevitable influx of accident-prone hunters and recreationists.
Any ensuing legal costs for both sides are the responsibility
of the land owner. In the event the owner takes the land trust
to court he will face a battalion of high-powered, high priced
attorneys specializing in conservation easement law. He will assuredly
lose. However, the land trust can easily take the property owner
to court at any time over owner performance or interpretation
of contract terms, often subjective in nature.
Basically the land owner is “over the barrel” and
beholden to the whims of the land trust, “locked in”
under contract in perpetuity. Furthermore, the congenial, reassuring
sales person could easily be replaced by a more demanding individual
perhaps verging on harassment. No business operation is guaranteed
to exist forever. The land trust may sell their interests to another
qualified agency, or other outside NGO’s may even register
third party dissatisfaction.
What are the chances of changes or termination of contract? Through
expensive legal process, it is possible for land owners to negotiate
with the land trust, seeking changes in contract terms, however
without assurance of success. Also, according to law if the holder
of both the use of the land and the title to that land fall under
the same ownership, the conservation easement contract is null
and void. Montana statute MCA 70-17-111, provides that if the
entity holding an easement becomes the owner of the Land, the
easement is extinguished. This suggests that owners could ask
the friendly foundation to sell its easement rights for a nominal
sum to a friend to whom he will deed the land. Presto — no
more conservation easement. But this is highly unlikely as the
land trust would dislike giving give up a prospective lucrative
land deal.
Eventually the owner may become desperate to unload the land to
get out from under aggravation and ongoing expense, and may become
willing to sell at almost any price. The land trust is now in
position to take the land off his hands at a price far below current
market value of similar unencumbered land. Then after achieving
full ownership of both the real property and its use, this non-profit,
non-taxpaying entity can flip it to the federal government at
a highly inflated price, possibly 10 times or more above purchase
price.
Payment in Federal tax dollars can then be reinvested in additional
conservation easements, thus continuing the cycle. Or, on the
other hand, as full owner and free of easement restrictions; the
property may be sold to developers, exactly contrary to the original
wishes of owners whose dream and entire purpose was preservation
of the land in its natural state for all future generations.
Another possibility occurring in some states is owner default
on taxes with property being virtually donated to the county,
which in reality becomes a liability unless a productive use is
found for it. If up for tax-sale this easement encumbered land
faces the previous problem of a limited market. States are now
attempting to develop legislation to over-ride or remove terms
of contract when county government assumes ownership, thus regaining
the sales value and re-establishing it onto the tax roles.
Hopefully this information will stimulate more in-depth consideration
of long-term ramifications and potential pit-falls prior to committing
to a conservation easement. Property owners owe it to themselves
and their heirs to give cautious, thorough investigation before
signing such a binding agreement. America, in general, needs to
be concerned about the increasing loss of private land to the
federal government through state and national land trust activities.
The matter urgently needs to be addressed legislatively by our
elected officials.
Respectfully submitted,
Clarice Ryan
253 Pine Needle Lane,
Bigfork, Montana 59911
406/837-6929
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