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: 1 Structure of Easement - Overview • Who, What, Why? • How? • Prohibit everything but give back specific rights • Approvals • Enforcement • Perpetuity protections • Assignment • Amendment • Extinguishment 2 The Model: Opening paragraph = WHO • Identify the Parties • Identify terms Grantor and Grantee • Do your title search early 3 1
6/27/2016 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) 4 Scenic Enjoyment • Requires Access (physical or visual) • Probably the most perilous CV 5 Habitat Preservation “ Significant relatively natural habitat” rare species, high quality habitat, protection of conservation area 6 2
6/27/2016 Outdoor Recreation And Education Who, what, when? 7 Water Quality Protection ( not a separate IRS Conservation Purpose ) 8 Public Policy Most useful IRS conservation purpose Many Sources: • DEEP Website • Plans of Conservation and Development • Federal Programs 9 3
6/27/2016 1. Purpose (pulls all the CVs into a common concept). i. natural, scenic, [agricultural,] [forested], and open 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 10 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 11 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 . 12 4
6/27/2016 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; 13 3.6 Pesticides • No use except: o 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 o and by licensed pesticide applicator w/BMP, or with forest and/or wildlife management plan prepared by a QNRP, approved by Grantee o approved by Grantee Again, designed to minimize LT stewardship duty 14 • 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) 15 5
6/27/2016 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 ] 16 5. Grantee’s Rights of Entry • 5.1 Right of Entry for Stewardship and Monitoring Purposes o Reasonable effort to notify o Not management • 5.2 Signs . [Optional ] 17 6. No Public Access • Define any allowed public access 18 6
6/27/2016 7. Notice and Approval • 7.1 90 Day written notice o Where Notice or Approval Required • 7.2 Approval o Not unreasonably withheld o Must not impair Conservation Values o Not inconsistent with Purpose o May establish reasonable conditions 19 7.3 Approval in Changed or Unforeseen Circumstances ( a/k/a, “Discretionary Consent”) o Disease, pests, natural disaster o Change in technology, BMPs, climate o 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) 20 8. Costs and Liabilities • Generally still owner – maintains, pays taxes etc. • But: re: liabilities, injuries, damages, fees: o 8.3 Indemnification by Grantor – b/c of PP condition or acts of Grantor o 8.4 Indemnification by Grantee – b/c of Grantee acts - Fairness issue between parties - Not about Violations ! See Par. 9.1 21 7
6/27/2016 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; o require the restoration for the property o enjoin (stop) such non-compliance by ex parte temporary or permanent injunction o recover damages 22 Grantee’s Emergency Remedies: • 9.3 Emergency Enforcement. • 9.4 Forbearance Not a Waiver. 23 *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: o costs of suit, reasonable expert and attorneys' fees, mediation, drafting “fixes”. Not just litigation. 24 8
6/27/2016 10.2 Non-enforcement Costs • May charge costs of interpretation or amendment requests, including: o staff time o consulting fees o appraisal o boundary surveys o monumentation 25 11 & 12 Grantor’s Warranties • Title • No actual knowledge of o violation of Environmental Laws o release or threatened release of Hazardous Materials. • hold harmless and indemnify Grantee for Violation of Environmental Laws by Grantor 26 “Boilerplate” Provisions = Perpetuity • 13. DURATION; PARTIES SUBJECT TO EASEMENT . • 14. SUBSEQUENT TRANSFERS. • 15. NO EXTINGUISHMENT BY MERGER. • 16. ASSIGNMENT. 27 9
6/27/2016 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 28 18. Extinguishment • IRS requirement • Real property right • Entitled to fair value of proportional interest • Helps prevent collusion • Excepts improvements after date of CE 29 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 30 10
6/27/2016 No Excuses • 20. ECONOMIC HARDSHIP • 21. NO TAX ADVICE • 22. Incorporation of Recitals and Addenda 31 22. Acceptance and Acknowledgement of CE • 47-6b of the Connecticut General Statutes. • Failsafe for f(8) “no goods or services” letter protection 32 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. 33 - 11
6/27/2016 What’s not in the Model: • SEE APPENDIX: • SUPPLEMENTARY OPTIONS: o PROHIBITED USES o RESERVED RIGHTS 34 IRS Forms • No Goods or Services Letter (“f(8)letter”) • Form 8283 Complete 8283- See instructions for 8283 o Supplemental Statement-See instructions for 8283 o Qualified Appraisal o Copy of recorded easement o Very nice looking and complete baseline o Gift (f8) acknowledgment letter o Correct mortgage subordination o • Form 8282 • 990 35 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 36 12
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