What is a Conservation Easement?

A conservation easement is a voluntary legal agreement between a landowner and a land trust like MLR that permanently limits the uses of the land in order to protect its conservation values.

Think of land ownership as holding a bundle of rights that includes the right to subdivide, construct buildings, irrigate, harvest timber, restrict access, and lease or sell the property, among others. A landowner may sell or donate their entire interest in the property—the whole bundle of rights—or may part with just one or two of those rights. If a property-owner wants to give away certain rights for the purpose of conservation, while retaining other rights, he or she grants a deed of conservation easement to a land trust such as MLR.

The donation of an easement may qualify as a charitable contribution. As such, it may reduce income, estate, and gift taxes. Regardless of changes in ownership, the conservation easement runs with the title and protects the land from inappropriate uses and development in perpetuity. The vast majority of conservation easements held by MLR have been donated by private landowners. In rare circumstances, MLR has purchased a conservation easement in a “bargain sale” from the landowner or has worked with landowners to take advantage of public funding programs, such as county open space initiatives and the Natural Resources Conservation Service’s Agricultural Land Easements Program.

Conservation Easement Terms

The terms of a conservation easement spell out the uses that are consistent and inconsistent with the conservation goals of the landowner. Each conservation easement is tailored to the unique character of the land and the conservation goals of the owner.

Uses That Can be Allowed in a Conservation Easement

  • Continued agricultural and silvicultural use
  • Construction of agricultural infrastructure
  • Sale, devise, gift, or other methods of transferring parcels, subject to terms of the easement
  • Landowner control of access
  • Additional family and employee residences compatible with conservation objectives
  • Wildlife and fisheries protection, restoration, and enhancement projects
  • Outfitting, guest ranching, and other small businesses

Uses Typically Restricted by Conservation Easement

  • Subdivision for residential development
  • Substantial commercial or industrial activities
  • Dumping of non-compostable or hazardous waste
  • Surface mining
  • Other uses that potentially interfere with protection of open space or habitat

Each Conservation Easement Assigns Three “Positive Rights" to MLR

  • The right to preserve and protect the property according to mutually agreed upon terms
  • The right (with applicable advance notification to the landowner) to enter the property to ensure compliance with easement terms (usually once a year)
  • The right to “enjoin and restore” which assures that the landowner’s goals, as spelled out in the easement, are enforced

The terms of the easement do not negate or modify state or federal law. Specifically, a conservation easement cannot prevent condemnation.

Legal Requirements

Although conservation easements are real property interests governed by Montana law, in order to qualify for the generous federal income tax deduction, certain requirements must be met.

These include the following:

  • The conservation easement must be granted on a specific parcel of real estate, in perpetuity. Mortgage and contract holders must agree to subordinate to the easement.
  • The conservation easement must protect at least one of the following four conservation purposes:
    1. Preservation of relatively natural habitat for fish, wildlife, plants, or similar ecosystems.
    2. Preservation of open space (including farmland and forest land) that will yield a significant public benefit, for the scenic enjoyment by the general public or pursuant to clearly delineated federal, state, or local governmental conservation policies.
    3. Preservation of land for education or outdoor recreation by the public.
    4. Preservation of historically important land areas or structures.
  • The conservation easement must prohibit uses that would be inconsistent with the protection of conservation purposes.
  • The easement must be granted to a qualified organization with the commitment to protect the conservation purposes of the easement, such as MLR.
  • The conservation easement must prohibit all surface mining. If the easement donor does not own all of the mineral rights, the possibility of surface mining must be determined to be “so remote as to be negligible.”
  • The condition of the property must be established by resource data prior to donation of the easement.
  • The value of the conservation easement must be established by qualified appraisal.