The Dangers of Conservation Easements – A Warning for Buyers Everywhere!

Posted by Scott Jacobs, Broker on Thursday, June 22, 2023 at 12:14:29 PM By Scott Jacobs, Broker / June 22, 2023 Comment

Considering a conservation easement or property with one? Pause and ponder! It's a commendable act to limit your land's development possibilities forever. Conservation easements offer a viable way to achieve this, facilitated by the government through tax incentives. Don't jump in without weighing the pros and cons!

Tax advisors urge landowners to offset income from other sources by imposing restrictions on their property. It's a smart move for those who have no plans of developing their land but want to reap financial benefits. Theoretically, the value of restricted land is less than unrestricted land, so buyers can save big bucks. However, caution is still required as these agreements can be tricky and may entail risky loopholes. So tread carefully before you take the plunge!

Once a conservation easement is in place, either a not-for-profit organization or a governmental entity will have the right to inspect your land periodically (usually annually) to ensure compliance with the terms of the easement. So, brace yourself for a periodic walk-through with an inspector who will give their subjective opinion on whether or not you're following the rules. But don't worry, this is just a necessary step to protect the natural beauty of your land for generations to come.

These agreements can restrict what you can undertake on your land and cause headaches for subsequent owners. With subjective language and complicated terms, it's easy to get lost in the document and end up on the wrong side of the law. Be sure to understand what you're signing up for and who you need permission from before making any changes. Conservation easements, often thought to have reasonable approval processes, can actually be incredibly restrictive. Don't be fooled by lower-level employees who give the green light - higher-level review may squash your plans for improving or using the land.

When it comes to conservation easements, their restrictions are no joke. But in the case of Wetlands America Trust, Inc. v. White Cloud Nine Ventures, L.P., our firm successfully defended a property owner accused of violating an easement. We argued that the restrictions placed on the land were narrowly interpreted and any ambiguity should be in favor of the owner's free use. We won in court, and the Virginia Supreme Court confirmed our victory. Our victory means that while conservation easements are important, they can't be used to completely restrict the use of land. Conservation easement holders suffered a big setback, prompting them to persuade Virginia lawmakers to pass Va. Code Section 10.1-1016.1 in 2021. Its purpose? To undo the damage caused by the Wetlands America Trust court ruling. The catch? No one knows for sure what impact this new code section will have. There are lingering questions about whether it applies retroactively to pre-existing easements, and what the court should prioritize when evaluating conservation value.

Picture this: conservation easements that profess to support agriculture and list farming as a core value. Seems noble, right? But the thing is, farming means tweaking the land and upgrading the property, which most easement holders refuse to condone. Confused about what's really going on? Read on for a clearer picture.

Don't Let Easements Override Your Rights: The Dirty Secret Nobody Told You

Turns out, most easements have a provision that favors the conservation easement holder - which means if you're disputing something and they don't like your interpretation, you're already in hot water. They call the shots and can even hire big law firms to bully you into submission. It's a pretty common scenario, unfortunately. We've seen it time and time again. So, what can you do? You can level the playing field by understanding your rights and standing up for them. Better yet, get experts to help you. They'll know how to deal with the scare tactics and actual charges that can come up in these disputes. Don't let an easement override your rights - you have the power to fight back.

Don't fall for the slick marketing tactics of conservation easement advocates. While they may emphasize the benefits, there are potential downsides to these agreements that aren't always disclosed. Real estate agents who downplay these disadvantages are doing you a disservice. Keep in mind that a property subject to a conservation easement should be priced lower than comparable, unrestricted properties. Don't be fooled into paying more than it's worth!

Thinking of putting your property under a conservation easement or buying one that is already under it? You need a savvy professional who's not associated with the conservation industry to guide you through the implications on your property's worth and future utilization. Don't risk missing out on your property's potential - get expert advice!

SCOTT JACOBS

(703) 346-5855

[email protected]

scottjacobsbroker.jacobsandco.com