Initial Discussions and Site Visit
Landowners should clearly lay out their long-term plans for the property, including planned development and planned alterations of the current land. UALT will provide landowners with a detailed application to complete which helps the team craft a conservation plan that is acceptable to the landowner and to UALT. As the process progresses toward completion, the landowner should consult with their own financial and legal advisers.
STEP 2 & 3
Seek Out Professional Counsel and Sign Letter of Intent
UALT encourages landowners to seek independent counsel to review all documents before the conservation easement is signed. UALT also encourages independent legal counsel throughout the conservation easement process, as well as input from other professionals, such as accountants, who can decide how tax benefits can be applied to the transaction.
Once the landowner has laid out the vision for the protection of the property, and UALT has had a chance to visit the property and evaluate its conservation values, the landowner(s) and UALT sign non-binding Letter of Intent that outlines the process and general expectations for completing the conservation easement.
Drafting Easement Documents
Drafting easement documents is a cooperative effort that includes UALT and the landowner. Once both parties have agreed to the terms, UALT drafts a conservation easement specific to the property. This is the point of the process where the landowner and UALT (with the help of respective legal advisors) negotiate easement terms acceptable to both parties. The goal is for both parties to agree to and be comfortable with the terms of the conservation easement. (This applies both to donated easements and purchased easements.)
With a draft easement in hand, a qualified appraiser assesses the value of the easement donation. This step is the responsibility of the landowner, who must justify that value to the IRS. Once the landowner and UALT agree to move forward based on the appraisal, UALT will begin the due diligence process. UALT will request a copy of the completed appraisal.
A specific minerals report may be necessary if the landowner does not own all of the mineral rights, after which a title report will be commissioned. The landowner must also secure subordination of property mortgages. There may be other due diligence requirements that may arise based on the nature of the donation and potential funding sources.
UALT prepares a report documenting land use history, the property’s natural and geological features, vegetative cover, soil features, wildlife inventory and structures located on the property. Topographic and aerial maps are prepared align with a detailed boundary map. On-site photographs are taken to document the property’s conditions at the time the easement is signed. UALT will recommend property resource enhancements. This report becomes a critical component in documenting the condition of the property at the time the easement is places on the property. A baseline survey is required for landowners wishing to claim an income tax deduction. The landowner and UALT sign the report and both parties keep copies. The baseline inventory is essential to documenting the property condition when the easement was created and is used as the primary documentation for future monitoring of the property.
STEPS 8 & 9
Sign and Record the Easement
UALT Board of Directors must approval all conservation easement proposals. After approval, the conservation easement is signed by the landowners and the Executive Director of the UALT. This document is recorded at the courthouse in the appropriate county.
Continual Monitoring of the Easement
By accepting the terms of the easement and entering into an easement agreement, UALT assumes responsibility to the IRS that easement provisions will remain effective to perpetuity. UALT will be responsible for monitoring the property at least annually to assure that all easement conditions are met.