Property Rights Foundation of America®

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


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