SLIDE 3 “Transfer fees”, also known as “stewardship fees”, as currently applied in the US and Canada have been in the magnitude of 2% to 10% of the sale price. They are optional. The latter (10% ) has been used on public land that is being transferred to the private sector. I f agreed to by the owner, the usefulness of the “transfer fee” provision is manifold: (a) I t helps the conservation body to assume agreements on properties where an endowment is not possible, thus assisting them to meet their mission and commitment to protecting the property while providing some assistance regarding long term stewardship costs; (b) I t provides a degree of comfort to landowners who may question how the recipient organisation is going to have the funds for stewardship in perpetuity; p g g g p p p y; (c) It ensures that the conservation agreement holder is made aware of property
- wnership transfers and provides immediate funds for a landowner contact
meeting to discuss the terms of the easement and to prepare and have signed
- ff a new monitoring report.
(d) Transfer fees act as an automatic inflation hedge since they are tied to the underlying real estate value. They may burden people to a nominal degree, but the people they burden are those that benefit from the resource that is protected and stewarded. Ultimately the fees can generate major dollars with very little pain that has the potential to build up a considerable endowment for each property or at least significant operating revenues for stewardship.
Advantages:
- Has been successfully applied in the USA and Canada and
has built substantial stewardship and defence revenue for the land trust community;
- Builds as land appreciates;
- Landowners often offer less resistance to a future fee than
cash now;
- Does not appear to impact marketability
Does not appear to impact marketability
Challenges:
- Timing is not predictable;
- Not tax deductable for the landowners as this is a
contractual obligation
- enforceability has risks and is being challenged by future
landowners ( see U.S.A. case: French & Pickering v Natale)
Defensible applications of Stewardship Fees:
An unsecured promise to pay a sum of money must be directly related to the land bound by the CEA to be binding
- n the future owners who did not make contractual
- bligation……this means that you must know and
document what it costs to steward the CEA on that parcel: Examples of LT stewardship costs …see OLTA Stewardship, Monitoring and
Costing Guide 2010 p 18-19) Costing Guide, 2010. p. 18-19)
- LT provides on-site monitoring to ensure compliance with the CEA
covenants;
- LT is obligated to investigate reports of possible violations and
exercise enforcement rights;
- LT provides services by reviewing a proposed action by the landowner
and by providing a discretionary “waiver, release or variance” letter” (OLTA template s. 4.3) to MNR; cont’d… … … .
