Steps to Setting up a Conservation Easement
You and the Land Trust representative take a tour of your property.
The Land Trust reviews your property and conservation goals with the Projects Committee.
You consult your legal and tax advisors.
The Land Trust compiles a baseline documentation report of the property.
You provide legal information to The Land Trust.
You obtain a mortgage subordination for the property.
Together we negotiate the restrictions and draft the easement.
You obtain a qualified appraisal.
The Land Trust Board of Directors is asked for formal acceptance of the conservation easement.
We both sign and record the easement.
The Land Trust for Tennessee 'LBC' provides stewardship of the conservation easement.
1. You and the Land Trust representative take a tour of your property.
On this introductory visit, you and the staff member or trained volunteer from The Land Trust will have the opportunity to see the property, to discuss your conservation goals, and to address conservation options. You will already have received and completed the "Landowner's Questionnaire"
prior to that visit, so the information about your land and conservation goals will be available to The Land Trust representative.
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2. The Land Trust reviews your property and conservation goals with the Projects Committee.
The Projects Committee of the Board of Directors reviews all potential land protection projects with the staff to determine if it is appropriate for The Land Trust to pursue the easement at this time.
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3. You consult your legal and tax advisors.
It is your responsibility to review the legal and financial implications and benefits of donating a conservation easement. The Land Trust can provide you with a list of local advisors familiar with this process, but you are urged to work with those advisors with whom you are comfortable and
who will give you the best advice for your personal situation. You will want advise on income and estate tax issues, and the way in which to take maximum advantage of the benefits possible through a conservation easement. You may also want to have an informal consultation with a qualified
appraiser. Doing this early in the process will help you to gain a general understanding of the value of the restrictions under discussion.
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4. The Land Trust compiles a baseline documentation report of the property.
Basic documentation needs to be completed for every conservation easement we accept, since it is the "present condition of the land" that gives us background for continued monitoring. Many of the easements that we accept are set up to qualify as tax-deductible
charitable gifts to The Land Trust for Tennessee 'LBC' as a qualified, non-profit, 501 (c)(3) organization. The value of the development rights relinquished through the easement is considered the value of the charitable gift. To comply with IRS regulations, a record of the condition of the
property at the time of the donation is required. We call this the "baseline documentation report". It will include photographs, surveys and other important information to represent fully the property and its special features. The Land Trust representatives complete this record
of the property during site visits with you and those you designate.
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5. You provide legal information to The Land Trust.
The Land Trust will need title information to identify the owner(s) of the property and the legal description of the land to be included in the conservation easement. You will also provide information on any liens and mortgages that may exist on the property.
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6. You obtain a mortgage subordination for the property.
If your property is subject to a pre-existing mortgage, you are responsible for obtaining a subordination from the lender in order for The Land Trust to be able to accept the easement. We sill assist you in explaining to the lender the benefit of the easement to the community-at-large and the
charitable purpose of the donation.
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7. Together we negotiate the restrictions and draft the easement.
Throughout the steps listed above, you and The Land Trust will have developed a good idea of what type of activities will be restricted by this easement as well as what continued uses of the land you desire. At this time, the draft conservation easement will be prepared by The Land Trust.
Your legal advisors and The Land Trust will review the document to be sure that both our interests are served. As this is a legal document, and one that will be attached to the property forever, careful discussion and scrutiny is vital to ensure our mutual satisfaction with the long-term
implications of the easement.
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8. You obtain a qualified appraisal.
An accurate appraisal is key to understanding what the conservation easement is worth as a charitable donation to The Land Trust, and thus what the tax benefits may be to you and your family. As property owner, it is your responsibility to obtain this appraisal. After this has been done,
no more than 60 days may elapse before the conservation easement document is signed. The final appraisal, then, will be based on the restrictions placed on the property in the conservation easement document.
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9. The Land Trust Board of Directors is asked for formal acceptance of the conservation easement.
Both the Board of Directors of The Land Trust and a subsidiary committee are authorized to approve acceptance of the conservation easement donation. Meetings are held regularly to review activities of The Land Trust and to approve receipt of conservation easements.
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10. We both sign and record the easement.
When both parties have agreed to all the terms and the wording of the easement, it is time for both to sign the document. You, as the owner, will sign it, as will the authorized representative for The Land Trust for Tennessee. The conservation easement is recorded by the attorney at the
county courthouse, becoming part of the recorded title to the land. This conservation easement is in perpetuity. It will be part of every sale or transfer of this property from this day forward and should be included in the addendum of any appraisal performed after the easement is in place.
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11. The Land Trust for Tennessee 'LBC' provides stewardship of the conservation easement.
From this point on, The Land Trust is responsible for monitoring the specifics of the conservation easement to protect your land. This usually means an annual visit and review, although a complex conservation easement may require more frequent monitoring. Also, at each transfer of the
property's ownership, a representative of The Land Trust for Tennessee will contact the new property to review the stewardship responsibilities as they are set out in the easement.
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Re-Printed with permission from the The Land Trust for Tennessee
615-244.LAND (5263)
