Whether a landowner is a rancher, farmer, or simply living on the property, that landowner has likely invested a great deal of time, sweat, and money into the stewardship and health of the land. It is often their desire to see that the land be kept in agricultural use, or be continuously managed in another sustainable way and be protected from future subdivision. By conserving a property with a conservation easement, a landowner can preserve their vision for the land and also create a lasting legacy for our community and their family. Landowners who decide to conserve their property ensure that future generations will benefit from the foresight of a vision put into action today. Such a vision also ensures that a landowner’s children and grandchildren will enjoy the same quality of life and rural character cherished today.
A conservation easement is a voluntary agreement made between a landowner and a qualified conservation organization such as the Montezuma Land Conservancy. The easement protects land with conservation values that are significant to the public—for example: agricultural land, significant wildlife and/or plant habitat, and scenic open space.
To understand how conservation easements work, think of owning land as owning a bundle of rights. A landowner can give away or sell the whole bundle or just one or two of those rights—the right, for example, to subdivide the land. Exactly what the landowner gives up, and what she or he keeps, is spelled out in the terms of each conservation easement. The landowner retains all other rights to the property and continues to own and use the land.
Conservation easements are extremely flexible and tailored to the individual property and the landowner’s wishes for the land. An easement can protect any or all of conservation values that the landowner chooses: farm and ranch land, water rights, wildlife or plant habitat, and scenic views. The conservation values are protected by limiting the subdivision and development rights on the land. In return, the landowner gets the satisfaction of having protected the land for future generations —and sometimes receives cash or important tax benefits as well.
When an easement is placed on a property, it marks the start of a lifelong and multi-generational relationship with the land trust. An easement lasts forever and Montezuma Land Conservancy takes that responsibility seriously. MLC staff and Board work day in and day out to meet landowners’ needs whether it’s promptly answering questions or working with brokers and buyers when a landowner decides to sell their land. We are committed to defending and enforcing every single one of our easements. MLC has worked with the full gamut of landowners – from ranching families to dryland farmers to second homeowners – and we understand that each easement is different and each relationship is unique. We have a full time staff member to focus exclusively on landowner relationship building and long term stewardship.
Through diligent research, reaching out to community members, and focusing on areas we believe are most at risk of losing their rural integrity, MLC compiled a comprehensive Strategic Conservation Plan that will act as a reference point and guide as we move forward as an organization.
We have made our conservation plan available to public. Within it you will find detailed maps, strategic goals, and our areas of focus. We hope it will give you a glimpse into the work we do, our strategic goals, and our plan for the future both as a Colorado Land Trust organization and a partner in the community.
MLC could not have created this plan without the broad help and support from our Board, the input we received from the local community, and the technical assistance received from the Sonoran Institute, the Lincoln Institute of Land Policy, and Dan Perlman, among many others.
You can download the plan in PDF form by clicking the link below.
In order for a conservation easement to confer state and federal tax benefits to the landowner, it must meet the conservation purposes test as described in the Treasury Regulations. Specifically, a conservation easement must be designed to protect one or more of the following conservation purposes:
Montezuma Land Conservancy applies the conservation purposes test to ensure that we accept easements only on lands with significant public value. Approving easements with questionable conservation values would not only violate the letter and intent of the law, but could jeopardize our tax exempt status.
According to Stephen J. Small, a former IRS lawyer and a leading expert on easements, “You will probably not qualify … if there is nothing special or unusual about the land that you are protecting except that it does not have houses on it.”
An easement is as restrictive as the landowner wishes it to be.
While ensuring that conservation values of public benefit are protected. Sometimes this totally prohibits new construction and sometimes it doesn’t. If the goal is to protect farm or ranch land and keep it in productivity, an easement may restrict subdivision and development while allowing for structures and activities necessary for and compatible with the agricultural operation. If the goal is to preserve a pristine natural area, an easement may prohibit all construction outside of a pre-determined “building envelope” as well as any activities that would alter the land’s present natural condition. However, even the most restrictive easements permit the continuation of historical uses of the land.
A landowner who grants a conservation easement does NOT have to open the property to the public. Some landowners convey certain public access rights, such as fishing or hiking in specified locations. Others do not.
Only permanent (perpetual) conservation easements can qualify a donor for federal and state income and estate tax benefits. A conservation easement runs with the land, binding not only the landowner who gives the easement, but all future owners as well. The easement is recorded in the county’s land records, so that future owners and lenders will learn about the restrictions when they obtain title reports.
Any landowner may give an easement, provided the property has conservation values that meet federal and state criteria for conservation purposes and public benefit. If the land is owned jointly or partially, all owners must consent to placing an easement on the land. If the property is mortgaged, the landowner may need to obtain an agreement from the lender to subordinate its interests to those of the easement holder. A conservation easement may be conveyed to a public agency or to a conservation organization that qualifies as a public charity under Internal Revenue Code 501c (3). The recipient organization is required to have adequate resources to enforce the terms of the easement in perpetuity.
Montezuma Land Conservancy is here as a service organization to landowners. We visit with landowners to provide information and hear about their vision for their land. If landowners wish to, Montezuma Land Conservancy will assist the landowner will all phases of the conservation easement process and make sure that the easement is effective.
The value of a conservation easement is generally estimated as the difference between the market value of the property unencumbered (“before”) and the market value of the property subject to the easement restrictions (“after”), as determined by a qualified appraiser. For example, the “before” market value of a highly developable property is the amount a person would pay for the property with the intent of developing it under existing and/or likely market conditions. (Note that “before” value is not the sale price of the developed lots.) The “after” market value is the amount a person would pay for the property, knowing that it is permanently restricted from some or all development. There is usually (but not always) a substantial difference between the before and after values, and the difference is the value of the conservation easement.
To qualify for federal and state tax benefits, a conservation easement must be donated in perpetuity to a qualified conservation organization “exclusively for conservation purposes,” and satisfy the “conservation purposes test” described above. The value of a qualifying conservation easement can be deducted from federal income and used as a credit against Colorado income tax. The easement can also result in an estate tax reduction and estate tax exclusion. Conservation easements can reduce property taxes as well.
Completing a conservation easement is expensive. There is no way around that reality. Between a baseline report, mineral report, appraisal, and other required fees and contributions, a conservation easement costs upwards of $35,000 to complete. That’s the bad news. The good news is that MLC has a dedicated fund called the Landowner Assistance Fund to help landowners pay for these costs up front. MLC will also work with you raise money to help minimize these costs when possible. Please call us at 565.1664 for more information related to the costs of completing a conservation easement.