- Legal/Financial Advice. It is recommended that a landowner obtain legal and financial advice from independent, experienced professionals to ensure proper structuring of the easement for land protection and tax purposes.
- Title Report, Mineral Remoteness Letter and Survey. A title commitment is always required and can cost from $300 and up. A mineral remoteness report is required when the landowner does not own the underlying mineral rights and can cost from $360 and up. A survey is sometimes, but not always, required to determine the exact boundaries of a conservation easement and/or to determine the boundaries of building areas within an easement.
- Baseline Documentation. IRS regulations require that the landowner provide baseline documentation for “qualified Conservation contributions.” The cost for baseline documentation can range from one to several thousand dollars depending on the complexity of the easement
- Conservation Easement Appraisal. An appraisal by a qualified conservation easement appraiser is required in order to claim federal and state income tax benefits for a gift of conservation easement. Appraisal costs vary, but an easement appraisal costs more than an ordinary real estate appraisal because it requires appraisal of both the “before” and “after” values.
- Other Costs. If there is a mortgage on the land, there may be a fee associated with subordinating the mortgage to the conservation easement. All conservation easements deeds must be recorded with the County Clerk. The fee for this is by the page and usually totals just over $100. Montezuma Land Conservancy charges a processing fee of $500 per donated conservation to cover a portion of the costs associated with drafting conservation easements, site review and travel, document review and overhead. MLC covers the bulk of these costs with other grant and membership revenue.
- Deductibility. The above costs, if incurred in conjunction with a charitable donation of land or a conservation easement, are deductible for income tax purposes.
- Stewardship Endowment. After an easement is signed the Montezuma Land Conservancy takes on the perpetual obligation to uphold the terms of the easement. To support this on-going, long-term monitoring and enforcement, MLC requests a donation to the stewardship endowment. This policy also satisfies IRS requirements that easement holders “must have the resources to enforce the restrictions” of the easement. Endowment donations are used only to generate income for monitoring easements. MLC’s Stewardship Donation Policy describes how the requested amount is calculated based on the location, size and complexity of the easement.
The landowner’s costs of completing a conservation easement are usually more than offset by the tax benefits resulting from the gift. In cases where important land is at risk because the landowner cannot afford the costs of the transaction, MLC may be able to assist with funds from its Landowner Assistance Fund.