Friday, December 10, 2010

Finding Land to Farm: Fee Title Purchase with Agricultural Conservation Easement

The series Finding Land to Farm comes to a conclusion with this final section today.

An agricultural conservation easement forever extinguishes development rights on that land, making it less valuable to nonfarmers. These types of easements are used if a landowner wishes to see the land remain available for agriculture: He or she donates or sells the land’s development rights in the form of an agricultural conservation easement to a nonprofit land trust or government agency, which ensures that the easement goals are upheld forever. This can drop the after-easement value, or "easement encumbered value," of the land into an affordable price range for a new farmer.

◊ The use of the property (the development rights) is restricted by the terms of the conservtion easement and those restrictions apply to all future owneres of the property.

◊ The development rights (in the form of a conservation easement) are donated or sold to a nonprofit land trust or government agency which holds the easement and ensures it is upheld.  The after-easement value (or easment-encumbered value) of hte land may drop the price into an affordable range for a new farmer.  This can occur in several way:
* The landowner could sell the easement first, then sell the encumbered land to a new farmer.
* The new farmer could partner with a land trust to make a joint purchase offer to the landowner.  (Occasionally a land trust buys first, then sells to a farmer thought a biddingn process).
* The new farmer could creatively finance land purchse, with a commitment by the land trust to purchase the easement in the future.
◊ Farmers seeking to buy land have a better chance when they're bidding on residential or ranchette real estate value.  Easements can make the difference between affordable ownership and lifelong leasing.
◊ Sellers can see their agricultural legacy continued.  With tax benefits, they can soemtime sreceive close to fair market value of the land.

◊ Because easements restrict property rights, they may limit values or owners' ability to get financing.

◊ Agricultural conservation easements don't always work as intended.  These easement-encumbered properties often still have high rural-estate home value to non-farmers.
◊ Process can be slow, since land trusts usually hav eto apply for funding to purchase easements.

◊ Easements are, in theory, forever.  This presents challenges to current and future landowners as to compliance and future enforceability of easements.

(all in this series were taken from

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