About: Land Trusts | Property Evaluation | Sample Easement Terms 

Step-by-Step Guide to: Conservation Easements | Gifts of Land | Bargain Sale | Trade Land

AN INTRODUCTION TO

CONSERVATION EASEMENTS

A conservation easement is a voluntary legal agreement between a landowner and Kachemak Heritage Land Trust that restricts certain types of development uses to preserve the conservation values of the property.  Landowners grant conservation easements to protect their land from incompatible development while retaining ownership and use of the property.

The terms of each easement are tailored to the particular property and the individual owner’s wishes.  Specific prohibited uses and reserved rights are detailed in the easement document, and the landowner conveys to Kachemak Heritage Land Trust the responsibility to monitor and enforce the easement’s terms.  The conservation easement is binding on all future owners of the property.  Easement provisions address issues such as subdivision of the property, construction of roads or buildings, timber harvest, or agriculture, among others.  An easement restricts development only to the degree necessary to protect significant conservation values of the property.

Tax Considerations

Also, Alaska statutes require local governments to recognize the effect on the land’s market value due to a conservation easement when calculating property taxes. 

Stewardship

In accepting a conservation easement, Kachemak Heritage Land Trust assumes the legal obligation to forever carry out the donor's desires by upholding the terms of the easement. While the easement donor has given something of great significance, Kachemak Heritage Land Trust has also assumed a perpetual liability. Eventually others will own the property and Kachemak Heritage Land Trust must be prepared to monitor and defend all of its easements.

It is standard land trust procedure to request a contribution to a stewardship fund, used solely for monitoring and defending conservation easements.  Furthermore, if the donor claims a tax deduction for a conservation easement, IRS regulations require that an "eligible donee" (i.e. Kachemak Heritage Land Trust) have the resources to enforce the easement restrictions.  The stewardship contribution is a one-time donation, and is generally small in relation to the landowner's tax savings.

To calculate the stewardship contribution amount, Kachemak Heritage Land Trust figures the annual cost of monitoring the easement, including items such as visiting the property, photographs, reporting, and landowner relations. The principal required to earn this amount in interest becomes the stewardship contribution. 

STEP-BY-STEP GUIDE TO

CONSERVATION EASEMENTS

If you are interested in donating a conservation easement to Kachemak Heritage Land Trust, these are the steps that Kachemak Heritage Land Trust will take:

1.      Discuss Landowner's Objectives: Kachemak Heritage Land Trust staff will discuss your objectives for the property and review your options for uses, restrictions, and resource protection.  Prior to moving forward, we will seek your agreement to cover the costs associated with completing the easement.  You should also review your plans with your personal tax and legal advisors.  If you will be seeking an income tax deduction, a preliminary review of the title may be done at this time to determine subsurface property ownership, and review existing encumbrances.

2.      Evaluate Property: Kachemak Heritage Land Trust staff will visit your property to evaluate its ecological, recreational, cultural, or scenic values and make a preliminary determination as to whether your property meets Kachemak Heritage Land Trust's criteria for accepting conservation easements. If your property does not meet Kachemak Heritage Land Trust’s criteria, other conservation options may be suggested.

3.      Request Kachemak Heritage Land Trust Board Approval: Land trust staff will present the property evaluation, your written agreement to cover the costs previously described, and your wishes for the easement's rights and restrictions to the Kachemak Heritage Land Trust Board of Directors at the next regularly scheduled board meeting.  Board approval is required to proceed.

4.      Review Title: Kachemak Heritage Land Trust requires proof of clear title and notice if there is an existing mortgage on the property. If there is a mortgage, the lender must subordinate its rights in the property to Kachemak Heritage Land Trust’s rights as the easement holder for the easement to qualify for an income tax deduction or for us to accept it.  Ownership of subsurface rights is also researched and may require that Kachemak Heritage Land Trust obtain a professional opinion of the likelihood of development of subsurface resources.

5.      Prepare the Conservation Easement Document:  Kachemak Heritage Land Trust staff and our attorney prepare a draft easement document that reflects your objectives.  You and your attorney then review the easement document.  Provisions relating to your objectives may be revised at this time.

6.      Prepare Baseline Documentation Report: Following Kachemak Heritage Land Trust board approval, you or a mutually agreed upon consultant will begin preparation of the "Baseline Documentation Report" to describe the condition of the property at the time of the donation.  An outline of the required information is available.  Kachemak Heritage Land Trust may be able to complete the report for you for a fee.

7.      Obtain an Appraisal: If you or your advisor determines that the easement donation will qualify as a charitable donation, you must select and hire a qualified appraiser to establish the market value of the property before and after the easement. 

8.      Sign Conservation Easement:  After a final review of the documents, you and Kachemak Heritage Land Trust will sign the conservation easement and Baseline Documentation Report. The conservation easement will then be recorded at the appropriate recorder's office.

9.      Submit Form 8283 to the IRS: You must attach IRS Form 8283 and required documentation (for "Noncash Charitable Contributions") to the income tax return that you submit for the year in which the easement was donated if you seek IRS recognition of your charitable contribution.