6/27/2016 ANATOMY OF A CONSERVATION EASEMENT with the CT Model as - - PDF document

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6/27/2016 ANATOMY OF A CONSERVATION EASEMENT with the CT Model as - - PDF document

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6/27/2016 ANATOMY OF A CONSERVATION EASEMENT with the CT Model as a guide 2/23/16 revision Great Hollow Preserve June 28, 2016 Presented by: Linda P. Francois Cooper, Whitney & Francois Keith R. Ainsworth, of counsel A project of the:

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ANATOMY OF A CONSERVATION EASEMENT with the CT Model as a guide

2/23/16 revision Great Hollow Preserve June 28, 2016 A project of the:

Presented by: Linda P. Francois Cooper, Whitney & Francois Keith R. Ainsworth, of counsel

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Structure of Easement - Overview

  • Who, What, Why?
  • How?
  • Prohibit everything but give back

specific rights

  • Approvals
  • Enforcement
  • Perpetuity protections
  • Assignment
  • Amendment
  • Extinguishment

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The Model: Opening paragraph

= WHO

  • Identify the Parties
  • Identify terms Grantor and Grantee
  • Do your title search early
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Recitals (“Whereas Clauses”) = WHAT and WHY

  • What Property you are protecting

Do you need a survey?

  • Capacity of land trust
  • Why it is worth protecting? – What are the

“Conservation Values”(CVs)?

  • Include IRS Recognized Conservation

Purposes (“Why” you are entitled to public support through a tax deduction)

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Scenic Enjoyment

  • Requires Access (physical or visual)
  • Probably the most perilous CV

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Habitat Preservation

“Significant

relatively natural habitat” rare species, high quality habitat, protection of conservation area

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Outdoor Recreation And Education

Who, what, when?

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Water Quality Protection (not a separate IRS Conservation Purpose)

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Public Policy

Most useful IRS conservation purpose Many Sources:

  • DEEP Website
  • Plans of Conservation and Development
  • Federal Programs
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  • 1. Purpose (pulls all the CVs into

a common concept).

  • i. natural, scenic, [agricultural,] [forested], and
  • pen space condition;
  • ii. [protect rare plants, animals, or plant

communities] [ecological qualities...] [iii. protect agricultural soils, agricultural viability, and agricultural productivity]

  • iv. prevent use that will significantly impair

CVs. Confine use to activities consistent with Purpose

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  • 2. Definitions

The Devil is in the details… and lack of definitions.

  • Up front
  • Capitalized in text
  • First Use is bolded
  • Subject to restrictions in relevant sections

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  • 3. Limitations and Prohibited Uses

3.1 No Subdivision. 3.2 No Use for Development. 3.3 Prohibited Structures. 3.4 No Changes in Topography and Mining.

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3.5 Changes to Vegetation

Broadly permissive exceptions minimize LT approvals: (i) existing trails and open areas; (ii) removal of Invasive Species; (iii) removal of trees and brush that pose a threat to safety or structures (!); (iv) habitat or CV enhancement (!) (v) preventing the spread of plant or animal species that pose significant threat to forest health; (vi) specifically recommended by governmental authority or QNRP;

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3.6 Pesticides

  • No use except:
  • in a selective manner, in accordance with BMPs

to organisms that attack native species of flora and fauna or threaten the diversity and health of ecological communities

  • and by licensed pesticide applicator w/BMP, or

with forest and/or wildlife management plan prepared by a QNRP, approved by Grantee

  • approved by Grantee

Again, designed to minimize LT stewardship duty

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  • 3.8 No Pollution and Alteration of Water

Resources

  • 3.9 NO Recreational Vehicles.
  • Motorized? Mechanized? Horses?
  • 3.10 No Commercial Recreational Activities
  • 3.11 NO Other use (inconsistent with Purpose)
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  • 4. Grantor’s Reserved Rights and

Permitted Uses

  • any activity or use not inconsistent with the

Purpose.

4.1 Mortgage and Convey subject to Easement. notice prior to transfer 4.2 Existing Structures 4.3 Outdoor Recreational Activities. [options!] 4.4 Signs 4.5 Habitat Enhancement 4.6 Invasive Species Removal [4.7 Special Subdivision Rule ]

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  • 5. Grantee’s Rights of Entry
  • 5.1 Right of Entry for Stewardship and

Monitoring Purposes

  • Reasonable effort to notify
  • Not management
  • 5.2 Signs. [Optional]

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  • 6. No Public Access
  • Define any allowed public access
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  • 7. Notice and Approval
  • 7.1 90 Day written notice
  • Where Notice or Approval Required
  • 7.2 Approval
  • Not unreasonably withheld
  • Must not impair Conservation Values
  • Not inconsistent with Purpose
  • May establish reasonable conditions

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7.3 Approval in Changed or Unforeseen Circumstances

(a/k/a, “Discretionary Consent”)

  • Disease, pests, natural disaster
  • Change in technology, BMPs, climate
  • Unforeseen circumstances
.

BUT Must enhance or be consistent with the Purpose, Intent May NOT:

  • terminate or impair Purpose, allow additional

development, or Impair qualification of CE or land trust (impair CVs)

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  • 8. Costs and Liabilities
  • Generally still owner – maintains, pays taxes etc.
  • But: re: liabilities, injuries, damages, fees:
  • 8.3 Indemnification by Grantor –

b/c of PP condition or acts of Grantor

  • 8.4 Indemnification by Grantee –

b/c of Grantee acts

  • Fairness issue between parties
  • Not about Violations! See Par. 9.1
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  • 9. Grantee’s Remedies (in event of

violation)= HOW WE PROTECT

  • Notice to landowner- request corrective action
  • 30 days after notice Grantee may start action to

enforce;

  • require the restoration for the property
  • enjoin (stop) such non-compliance by ex

parte temporary or permanent injunction

  • recover damages

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Grantee’s Emergency Remedies:

  • 9.3 Emergency Enforcement.
  • 9.4 Forbearance Not a Waiver.

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*10.1 Grantee’s Entitlement to Costs of Enforcement

  • 10. Grantee accepted CE in reliance on right
  • Comprehensive right of reimbursement for all

reasonable costs of enforcing & remedying any violation including:

  • costs of suit, reasonable expert and attorneys'

fees, mediation, drafting “fixes”. Not just litigation.

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10.2 Non-enforcement Costs

  • May charge costs of interpretation or amendment

requests, including:

  • staff time
  • consulting fees
  • appraisal
  • boundary surveys
  • monumentation

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11 & 12 Grantor’s Warranties

  • Title
  • No actual knowledge of
  • violation of Environmental Laws
  • release or threatened release of Hazardous

Materials.

  • hold harmless and indemnify Grantee for

Violation of Environmental Laws by Grantor

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“Boilerplate” Provisions = Perpetuity

  • 13. DURATION; PARTIES SUBJECT TO

EASEMENT.

  • 14. SUBSEQUENT TRANSFERS.
  • 15. NO EXTINGUISHMENT BY MERGER.
  • 16. ASSIGNMENT.
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  • 17. Limitation on Amendments

Without an amendment clause there is nothing to state what the Grantor intended. Model Easement includes 2 alternatives:

  • 1. No amendment until issue resolved, then follow

terms in Conservation Easement; OR

  • 2. In Commentary, detailed conditions allowing

amendment

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  • 18. Extinguishment
  • IRS requirement
  • Real property right
  • Entitled to fair value of proportional interest
  • Helps prevent collusion
  • Excepts improvements after date of CE

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  • 19. General Legal Boilerplate
  • 19.1

In General

  • 19.2

Liberal Construction

  • 19.3

Severability I

  • 19.4

Entire Agreement

  • 19.5

Re-recording

  • 19.6

Governmental Approvals

  • 19.7

Captions

  • 19.8

Counterparts

  • 19.9

Notices

  • 19.10

Baseline Report

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No Excuses

  • 20. ECONOMIC HARDSHIP
  • 21. NO TAX ADVICE
  • 22. Incorporation of Recitals and Addenda

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  • 22. Acceptance and

Acknowledgement of CE

  • 47-6b of the Connecticut General Statutes.
  • Failsafe for f(8) “no goods or services” letter

protection

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Baseline Report

Not a part of the easement but integral to enforcement/deduction

  • Referenced in Recitals
  • Contemporaneous with execution of CE
  • Documents CVs
  • Document condition of PP for enforcement
  • Required by IRS, S&P, accreditation, Terra Firma,

common sense. But do not rely on it for important easement terms.

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What’s not in the Model:

  • SEE APPENDIX:
  • SUPPLEMENTARY OPTIONS:
  • PROHIBITED USES
  • RESERVED RIGHTS

IRS Forms

  • No Goods or Services Letter (“f(8)letter”)
  • Form 8283
  • Complete 8283- See instructions for 8283
  • Supplemental Statement-See instructions for 8283
  • Qualified Appraisal
  • Copy of recorded easement
  • Very nice looking and complete baseline
  • Gift (f8) acknowledgment letter
  • Correct mortgage subordination
  • Form 8282
  • 990

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CT’s Super Liability Laws

  • C.G.S. §52-560a (2006) For encroachment on land

trust (LT) land or CEs, C.G.S. § 47-6b (2004)

  • C.G.S § 47-27(b) (2002,2015, 2016) bars adverse

possession and prescriptive easement claims against non-profit land holding organizations.

  • C.G.S. § 12-81. Par. 7. (2008) Land trust property

exempt from property tax even if just preserving land without public access.

  • C.G.S. § 52-557g. (1971) Liability of owner of land

available to public for recreation

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