Conservation Easement Questions

1. Can Conservation easements be donated, mortgaged or sold? Yes.

2. Is public access required? Not generally.

3. What are the restrictions in a conservation easement? No subdivisions, however limited development is allowed. No mining, commercial or industrial uses, however ranching, farming, cottage industries and lodging are allowed. Water rights must stay with the property, and there must be proper timber and land management.

4. What is the role of a land trust? A land trust is the recipient of a conservation easement. They can be private, or non-profit, or even a governmental entity. Their role is to enforce the development restrictions, and make sure the land is properly managed. A cash donation to the land trust as an endowment for monitoring and enforcement of the conservation easement is often part of the transaction.

5. How is a conservation easement valued? An appraiser uses the "before and after" approach, defining the value of the property as the difference between the property value before the conservation easement and the value of the property after it is encumbered by the conservation easement. The appraisal for a conservation easement must be done carefully, since it can come under close scrutiny by the IRS, the Colorado Dept of Revenue, and land trusts.

If a landowner wants to take advantage of the tax credits available, the easement must be valued to determine its worth. In most cases, the appraisal must be done 60 days in advance of placing the easement.

6. How does one set up a conservation easement? An attorney familiar with this law should be consulted, to make sure that the conservation easement is written to comply with all the requirements, especially those of the I.R.S.

7. What documents will be required to set up the Conservation Easement?

  1. An appraisal, dated within 60 days of placing the easement.
  2. Conservation Easement, negotiated between the landowner and the land trust.
  3. Title Insurance.
  4. Present conditions report, that documents the biological and physical condition of the property at the time the easement is placed, and that assesses the current condition of each restriction listed in the conservation easement.

8. What is a realistic timeline for setting up a Conservation Easement? In Colorado, most easement transactions can be completed within 90 days. Difficulties may arise, as in any transaction, and could extend the time period to 120 days.

Please contact Bob and Linda Lario for more information on conservation easements, and for a Contact List of people who can help in this process.

  • Bob and Linda Lario
  • RE/MAX© Mountain West
  • P.O. Box 778
  • Paonia, CO 81428
  • Office: 970.527.7759
  • Toll Free: 800.571.7670

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