What is a Preservation Easement?
What is a preservation easement?
The term “preservation easement” is commonly used to describe a type of conservation easement – a private legal right given by the owner of a property to a qualified nonprofit organization or governmental entity for the purpose of protecting a property’s conservation and preservation values. Conservation easements are used to protect land that has outdoor recreational value, natural environmental value (including natural habitat), open space (including farmland, forest land, and land with scenic value), or land that has historic, architectural, or archaeological significance. Preservation easements are conservation easements whose principal purpose is to protect a property with historic, architectural, or archaeological significance, although the easement may also protect natural land values as part of a property’s historic setting. (Correspondingly, other types of conservation easements held by conservation organizations or land trusts typically are given for the purpose of protecting natural characteristics of a property, but they may also protect historic resources, such as historic farmland or archaeological sites.)
A preservation easement is considered a “partial interest” in real property – the property owner continues to own the property but transfers the specific set of rights represented by the easement to the easement-holding organization. Typically, a preservation easement protects against changes to a property that would be inconsistent with the preservation of the property, such as demolition of historic buildings, inappropriate alterations, or subdivision of land. The easement may also protect against deterioration by imposing affirmative maintenance obligations. The restrictions of the easement are generally incorporated into a recordable preservation easement deed that is part of the property’s title (in legal terms, it “runs with the land”) – and this title interest is binding both on the present owner and future owners.
What is the difference between a preservation easement and a preservation covenant?
Preservation easements may be described in some states as “preservation covenants” or “preservation restrictions.” Although the terminology may vary, the interest conveyed is generally the same.
How does a property become protected under a preservation easement?
Conservation and preservation easements are created under state law – most states have specific enabling laws that authorize the creation of conservation and preservation easements as discrete interests in real property. The terms (and the requirements) of an easement may vary depending on the laws of a particular state – and, as such, it is important that property owners considering donating an easement, and that organizations considering accepting an easement, work with a lawyer familiar with the laws of the state in which the property in question is located. In some states, for example, state and local approval must be obtained before an easement will be deemed valid under state law.
Even though preservation easements are created under state law, easement donors seeking federal tax incentives will need to meet the requirements of the IRS regulations. Easements that do not comply with these additional requirements may be fully effective as easements, but may not qualify for the federal tax deduction. The IRS requirements are summarized below, but, again, donors are strongly advised to work with a lawyer familiar with the requirements of federal law.
How long can an easement protect a property?
The duration of preservation easements may differ. Some easements are for a term of years, with the interests of the preservation organization expiring at the end of the term. A common example is an easement that is imposed as a condition for a grant of financial assistance from a state or governmental authority or a nonprofit organization. Most easements, however, are written to last permanently. Easements that qualify for the federal tax deduction must be perpetual.
What does an easement protect?
Typically, preservation easements address five basic issues: (1) What physical features of the property are covered by the easement; (2) What activities by a property owner that could damage or destroy significant historic or architectural features are absolutely prohibited; (3) What activities are allowed, subject to the approval of the easement-holding organization; (4) What activities are permitted by the owner as a matter of right; and (5) what type of affirmative maintenance obligations are required to be undertaken by the owner. The easement will also address other “boilerplate” issues, such as insurance, public access, amendment, and casualty damage.
There are many kinds of historic properties – and easements are as varied as the properties they protect. Most preservation easements protect, at the very least, the exterior character-defining features of a historic property, but many go beyond this to include interior features, the historic setting of a property, and/or specific landscape features. Most easements restrict the owner’s use of development rights such as subdivision or air rights. Some allow the owner to exercise those rights, but only as approved by the easement-holding organization. Some prohibit additions or construction of secondary structures; others permit them if approved as compatible with the historic character of a building.
What criteria is used to judge work and or changes to a protected property?
The criteria used by preservation organizations in deciding upon the appropriateness of changes proposed by property owners may vary, but many organizations rely on the Secretary of the Interior’s Standards for Rehabilitation or the Secretary of the Interior’s Standards for the Treatment of Historic Properties. Some organizations follow the criteria established by a local historic preservation commission for review of changes to historic properties in a designated historic district under local law.
What obligations do I have under a preservation easement?
The obligations of an easement run in two directions: the owner of the property has the obligation to comply with the terms of the easement, and the easement-holding organization has the obligation to monitor and enforce the easement. From the standpoint of the easement-holding organization, the substantive benefits of preservation easements can greatly advance its preservation mission. On the other hand, easements may require a significant commitment of staff time and resources into the indefinite future, and they should not be undertaken lightly. An easement is a relatively flexible tool. It can be crafted to meet the specific characteristics of the property, the interests of the easement-holding organization, and the property owner’s interest in having a property that will continue to have a viable productive use.
What does it mean to have a preservation easement held by the New Hampshire Division of Historical Resources?
Owners of property protected by a preservation easement or covenant that is overseen by the New Hampshire Division of Historical Resources (NHDHR) are in an active partnership with the NHDHR. The property owner is responsible for caring for the property in compliance with the terms of the easement. The NHDHR is responsible for monitoring changes to the property, as specified in the easement. The staff of the NHDHR work with property owners as changes are proposed in order to insure that the designs are in compliance with the terms of the easement.
Why does a property have a preservation easement?
Easements are designed to protect a historic property’s values for the public’s benefit. They can be produced when state or federal funds are granted for a project like a Save America’s Treasures grant. They are also created when a federal or state agency transfer’s a public property into private hands or as a mitigation measure for federal projects.
How does the NHDHR monitor easements?
While the monitoring responsibilities can differ in some easements, the easement coordinator for the NHDHR usually maintains an active relationship with each property owner. Most property owners are responsible for providing a yearly report on their property and its current conditions. The easement coordinator, along with applicable NHDHR staff may request to visit to the property and, where interior features are protected, view the interior to conduct a review. When work is planned for the property, the easement coordinator should be contacted to discuss moving forward. For minor projects, a letter explaining the work to be done may suffice. For larger projects, more in-depth plans may be required before approval can be granted. In such cases or when a protected property is undergoing rehabilitation, the easement coordinator may inspect the property on a more frequent basis. More information on the monitoring requirements for a particular property can be acquired by contacting the NHDHR easement coordinator at (603) 271-3583.
How are work plans and changes judged by the NHDHR?
The NHDHR uses the Secretary of the Interior’s Standards for the Treatment of Historic Properties and their associated guidelines when reviewing work on an easement protected property. For a copy of the guidelines, please log on to http://www.nps.gov/hps/tps/standguide/
Who is my contact at the NHDHR for preservation easements and covenants?
The easement coordinator is the contact for all easement questions and concerns.
For more information, please contact: