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Buying Land With a Conservation Easement: What You Need to Know

[Updated: Sep 03, 2020] Jan 26, 2020 by Maurie Backman
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If you're thinking of buying land with a conservation easement, you'll need to really understand what you're signing up for. Here, we'll review how conservation easements work and the benefits and drawbacks associated with them.

What is a conservation easement?

A conservation easement is a voluntary legal agreement that applies to a specific amount of land. That agreement generally dictates that the land in question cannot be developed and gives a local land trust or government agency the right to oversee that land. At the same time, however, that conservation land can be privately owned and utilized. Conservation easements are usually permanent, and landowners that establish easements generally reap some type of tax benefit in return.

Here's how a conservation easement might come to be. A landowner decides to allocate a portion of his land as an easement. He goes through the legal steps, and once that easement is established, the land in question can no longer be developed as per the terms of the easement. That land can, however, be sold to another buyer. Meanwhile, the original owner gets a tax deduction provided that easement creates a protective wildlife habitat, preserves that land for public educational or recreational use, or preserves open space.

Benefits of buying a home or land with a conservation easement

As mentioned, conservation land can be sold, and when you buy it, it's your private property. You do, however, need to adhere to the terms of your easement.

One big advantage of buying a home or land with an easement is that it could result in major savings. Conservation land is restrictive by nature, and that’s often a big sticking point for buyers. But if you're willing to deal with those restrictions, it could be a good way to buy land or property on the cheap.

Keep in mind that it's possible to buy property where only a portion of it is considered conservation land. As such, you may not find the restrictions involved all that bothersome. For example, imagine you buy a home on two acres of land, and 25% of your land falls under an easement. The reality is that you're still left with plenty of space to roam around in your backyard, in which case the fact that you're on an easement may not bother you at all.

Furthermore, in some cases, easements are created to preserve unique vegetation or land features -- namely, by preventing development or barring future owners from altering that land's original habitat. The result? You get to own land with special features that can't easily be found elsewhere.

Drawbacks of buying a home or land with a conservation easement

Despite the advantages of buying a home or land with an easement, there are a number of drawbacks you'll need to keep in mind.

Buying land with a conservation easement

The restrictive nature of an easement could come into play in a number of scenarios when you're buying a stretch of land.

Imagine you buy land with an easement, and your goal is to build a home on it. Depending on the terms of that easement, you may not get to build the home you want. Some parts of that land may be off-limits for development entirely, limiting you to a smaller property. And you'll generally have more rules to follow than when you buy regular land to build on.

Furthermore, if you buy a larger piece of land with a conservation easement that you subsequently wish to subdivide, you may not get that option. Some easements limit or prohibit subdivision; you'll need to see what restrictions you're subject to.

If you're buying land with an easement you wish to farm on, you'll face similar restrictions. You may be prohibited from building a barn or any other type of permanent structure on that conservation land.

Buying a home with a conservation easement

Buying a home with a conservation easement could limit you substantially as a property owner. Most easements prohibit you from building permanent structures on them. Now, imagine you buy a home where part of your backyard is conservation land, and you want to put up a fence -- either for privacy, your children's safety, or to keep wildlife at a safe distance. Your easement, unfortunately, may prohibit you from putting up that fence.

Similarly, you may be barred from putting up retaining walls, sheds, or other such structures that are considered permanent in nature when you have an easement. That, in turn, could limit the extent to which you're able to fully utilize your outdoor space.

Also, with an easement, you're generally prohibited from altering its natural habitat. The bushes and shrubs you don't like in that easement? You may not be able to remove them. The same holds true for trees in an easement -- you generally can't remove them unless they pose a major hazard to your property or a surrounding property. And even if they do constitute a potential hazard, you might still be barred from taking them down.

Finally, you might struggle to sell a home that comes with conservation land because future buyers may not want to deal with the restrictions at play. And if you do find a buyer, you may not get the price you want.

How to know if you're buying a home or land with a conservation easement

Believe it or not, some people wind up purchasing a property with conservation land without being any the wiser. To see if a property you're looking at has a conservation easement, review its deed and land survey. And if you want to know what that easement’s restrictions entail, request a copy of the legal agreement outlining its terms from your seller. There should also be a copy on file with your state, or you can check the National Conservation Easement Database.

The bottom line on conservation easements

The Pros and Cons of Conservation Easements

Pros Cons
• You could save considerable money on your purchase, as opposed to buying comparable property not on an easement.

• You might get to own land with some unique property features.

• You may not be allowed to make improvements to your property, including building structures and removing trees and shrubs.

• You may not be allowed to subdivide your property or may be limited in doing so.

• You may have trouble selling the property or getting a good price because of the restrictions.

Conservation easements offer a major tax break to those landowners who establish them. As a buyer, however, you're not privy to that same tax break, so you'll need to weigh the pros of having an easement against the cons to arrive at the best choice.

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