Easement basics

A conservation easement is the most popular and permanent way to protect your land’s special features—natural, cultural, historic and scenic—while retaining private ownership and use.

How easements work

A conservation easement is a contract between a landowner and a qualified conservation group. The easement document specifies:

which uses or rights the landowner wants to retain and
which uses the landowner does not want to exercise—and does not want any future owners to be able to exercise.

In other words, when you grant a conservation easement, you retain many land ownership rights while voluntarily giving up others—such as development or mining—that could damage the site’s conservation values. The easement document, which is binding to the current owner and all future owners, is filed with the county recorder.

Flexibility

Because landscapes, landowners goals and potential threats vary widely, a conservation easement is a flexible protection tool.

Though conservation easements may start from the same template, each is tailored to the land and the landowner. For example, some Iowa easement donors place an easement on their entire property while others protect only the most vulnerable areas. Some limit timber harvesting to a sustainable plan while others completely prohibit it. Some restrict development to protect their agricultural tradition. Others restrict agriculture to protect their prairie restoration efforts. (See examples on pages 28-29.)

Effects on property rights

Easements allow landowners to maintain most ownership rights. Grantors still hold the property in fee-title and can sell it or bequeath it to heirs. If compatible with the purpose of the easement, they may live on the site, raise crops, harvest timber and otherwise derive income from the property. Their rights to restrict public access are identical to those of any other private landowner.

Meanwhile, easement donors retain typical landowner responsibilities such as controlling noxious weeds and paying property taxes.

Financial and tax effects

A conservation easement generally reduces the land’s fair market value, which can reduce the donor’s taxes. For example, an easement that restricts development rights on property within a high-growth area may reduce its fair market value. If the easement is donated, the difference in appraised value before and after placing the easement may be recognized as a charitable gift and may qualify the donor for substantial income tax deductions. It may also reduce estate and inheritance taxes.

The process

If you’re trying to complete your easement within a specific tax-year or other personal deadline, plan ahead! From start to finish, the process can take 4 to 15 months.

The conservation easement process involves several steps, including drafting and agreeing on easement language, updating the property abstract to assure clear title, getting a qualified appraisal (if you seek tax benefits), creating a baseline inventory that the easement holder can use in future monitoring visits, and filing final documents with your county recorder. While most of these tasks aren’t your responsibility, you need to allow time for others to complete them.

The decision

Granting a conservation easement is a major decision that should not be undertaken lightly. Depending on circumstances, easements can significantly reduce the land’s fair market value while providing significant tax benefits. Once signed, an easement’s restrictions are recorded and become permanently binding on the current owner and all future owners, in perpetuity.

Before granting a conservation easement, discuss the options with your financial and legal advisors, family, heirs and potential easement holder.

Tailoring your easement

Most conservation easements share similar features—with the finer details adapted to each landscape and landowner.

For example, easements held by the Iowa Natural Heritage Foundation generally prohibit subdivision, development, mining and concentrated animal feeding operations. They generally permit continued residence by current and future owners, agriculture on previously farmed fields, timber harvests within a sustainable plan and other activities that don’t violate the stated restrictions or otherwise damage the protected resources. However, most easements also have individual features that reflect the specific landscape or the landowner’s wishes. The case studies in this section provide several real-life examples.