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PO Box 2614, Southern Pines NC 28388
Dana Carroll, Coordinator
The questions that comes up most often when talking to landowners has to do with Conservation Easements. What are they? How do they work? Do I still own my property? How are they conveyed? What can do on that property after I put a conservation easement on it? How long do these terms last? Can I still sell (bequeath/lease, etc.) my property? What are my rights? What are my benefits if I choose to grant a conservation easement?
While most of the property owners along Drowning Creek and its tributaries have owned property for some time, Conservation Easements are a relatively new entity in the world of real estate. Many of us are still learning about conservation easements, and what they can mean to the buyer and seller now and in the future. (Some of the following information has been taken from a publication put out by the Conservation Trust for North Carolina. You may go to an Adobe Acrobat printable version of this publication by clicking here. If you don't have Adobe Acrobat, you can click on the Acrobat Reader button above to download a free copy.)
There are many types of Conservation Easements. A conservation easement is a flexible tool that protects land while leaving it in private ownership. It is a legal and binding agreement between a landowner and a qualified conservation organization such as the Conservation Trust for North Carolina and your local land trust. Conservation easements can also be held by other qualified entities such as governmental bodies. The conservation easement agreement in perpetuity is recorded with the deed to the property, and applies to all future owners. The type of easement we are wanting to purchase for the Drowning Creek Legacy are very similar to Forever Wild Easements. This means the property will have this Conservation Easement on it forever. The Seller will still retain title to the property, but will have some restrictions in place as to the use of that land. They will still be able to use the land for what is referred to as "quiet enjoyment". That means they may use the land for fishing, hunting, canoeing, walking, etc.; activities that would not cause destruction to the vegetation that provides protection for the water quality. While each easement can be tailored to some degree to each Seller's particular needs, this is a general specification that would apply to all our easements. One Seller wants to put walkways in the easement so people with special needs would be able to walk (or use wheelchairs) in this area and enjoy the pristine conditions of Drowning Creek. This falls within the guidelines of our project, and so will be written into the Conservation Easement verbiage. There will be arrangements made for the Land Trust or other entity holding the easement to make annual inspections of the property to ensure the easement is being maintained according to the terms specified in that easement.
Conservation Easements are transferred just as real property is transferred. There will be an appraisal done by an appraiser agreed upon by the Buyer and Seller. The appraisal is based upon the value of the use of the property that will be lost by the Seller adhering to the terms of the Conservation Easement. There is an offer to purchase made by the Buyer to the Seller. When the Buyer and Seller have agreed on a selling price, a closing is scheduled, and the Easement is sold or donated (more about this below). The property will be reevaluated for property taxes, and the amount of the sale of the easement would be subtracted from overall value of the property to give the new tax value. This helps the landowner pay reduced property tax and their heirs to pay less inheritance taxes. The property still belong to the landowner, and is theirs to sell, lease, bequeath, etc. as they like. However, the restrictions that apply to the current landowner will also apply to future owners/users of the property. The positive side of this for future value of the land is that property that abuts undisturbed land, especially land with water is shown time and time again to increase dramatically the desirability of that property to future buyers.
As mentioned above, the property can be sold or donated. If donated, the Seller can get multiple tax advantages. The State of North Carolina will grant a tax credit to the value of 25% of the value of the donation. The IRS will allow a deduction for the amount donated. It is limited to 30% of your annual income per year taken. It can be taken in successive years until it is completely used. Add these to the property and inheritance tax advantages available whether the property is sold or donated. If income is more of a concern than tax advantages, but the income itself might create a tax problem, a "bargain sale" can be arranged. You can sell part of the easement and donate the rest. We are as flexible as possible to give the Seller the biggest advantage possible.
Most of us don't get an opportunity to leave a lasting legacy for future generations. This is a rare and lasting way to let those who come after you know how much you care about your land and water, and the quality of them for your neighbors and your future.
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