Landowners Warned To Be Wary
Of Any Conservation Easement

By Colleen Schreiber

AUSTIN — Different opinions are what make the world interesting, so it’s said. There are certainly different opinions regarding such matters as conservation easements, one of the topics discussed at the Southwest Landowner Conference here earlier this summer.

Fred Kelly Grant, a property rights attorney and a consultant to Stewards of the Range, warned participanting landowners to be wary of conservation easements.

“The Nature Conservancy, The Wildlife Federation and all of the non-governmental agencies have understood property rights a lot longer than many of us,” Grant told listeners.

“And they understood what they had to do to get around the Fifth Amendment and to get around due process. One of the ways is through conservation easements. In short, conservation easements have become the tool of choice for non-profits, even the government, to gain control over private property.”

In legal terms, a conservation easement may be defined as “a right of use over the property of another.” An easement, he pointed out, creates a “dominant estate” and a “servient estate.”

“If you’re the property owner and sign a conservation easement, you have just committed yourself to serving the dominant interest of whatever organization bought that interest,” Grant insisted.

Conservation easements, along with “transfer of development rights” and “smart growth,” are tools, Grant reiterated, that allow the government to condemn one’s property and pay less than the fair market value, the amount it would have to pay if the land were acquired through the eminent domain process.

An example of this occurred with a recent purchase in Idaho by the Nature Conservancy.

“They purchased a ranch for $480,000 and two months later they sold a conservation easement to the U.S. government for $460,000. Then they traded the land to the government in exchange for federal land in the foothills of Boise, some of the most highly valued land in Southern Idaho except for Sun Valley, and then later sold it for more than a million dollars.”

That million dollars, he told listeners, was spent to buy scenic easements from anti-grazing activists such as John Marvel.

Grant talked about the various problems he sees with conservation easements. One big problem, he said, is third-party enforcement. Anyone who buys a conservation easement now, in most states, has to be a non-profit organization or the government. Grant said landowners should pay particular attention to the statute that governs the easement.

“If a non-profit governs the easement, an activist like John Marvel, who is opposed to all grazing on public lands, could step into any of the Nature Conservancy easements and contend that grazing is hurting the natural resource of that particular land. The court would have to listen to the case.”

Even after a landowner has given due diligence to the language of the easement and thinks he understands the agreement, Grant warned, “Beware.

“If you think you can rely on the language of the easement, that it will be the final word, think again. The courts will interpret in any way they have to so that the language of the easement favors the easement owner.”

He found the liberal application of the law by the Ninth Circuit Court of Appeals to be true in a case dealing with the Big Meadows Grazing Association. In this particular case, to take advantage of the Wetlands Reserve Program, the rancher had to agree to a conservation easement that would protect and rehabilitate wetlands and conserve the natural resource values of the ranch.

“One of the things that the Department of Agriculture promised was that the plan that would be put in place to protect and rehabilitate the wetlands would cost the landowner $80,000,” Grant said.

“Two years later the rancher was told they’d adopted a new plan that would now cost him $486,000.

“They also changed the contract so that it now said they would dam up the water instead of constraining the wetlands to those running along streams.”

The rancher took the government to court. On the issue of the government’s promise that the rancher’s part would only cost him $80,000, the Ninth Circuit ruled that it was an oral upfront promise. That promise, the court said, became unenforceable when the conservation easement agreement was signed, because an easement is a real estate action and oral proof is not admissible.

The rancher also pointed out that the wetlands reserve manual said he had to agree to any changes. The court, however, ruled that the manual isn’t binding on the government.

“This case shows why the land trust groups have chosen easements,” Grant told listeners. “They put the word easement in there, and the court says that’s it. It’s a real property-binding agreement.”

“Transfer of development rights” and “smart growth” were two of the other concerns voiced by Grant. These rights are generally associated with cities and government, but national non-profit organizations, the speaker said, are now able to accomplish the same thing through conservation easements.

“Transfer of development rights is when you sell from your property the right to develop it and you sell or trade the right to develop your property in exchange for developing another piece of property,” Grant explained.

The first case in which the Supreme Court considered the transfer of development rights was Penn Central Transportation Co. et al. v. New York City et al. Penn Central, Grant explained, owned Grand Central Station in New York City. They wanted to build a multi-story office tower on top of Grand Central Station. The City of New York denied permission for the addition, citing the city’s Landmarks Preservation Law.

Lawyers for Penn Central filed a “takings” case, which went all the way to the Supreme Court. In June 1978 the Supreme Court ruled that the application of New York City’s Landmarks Law did not constitute a “taking” because the property had not been deprived of its full economic value.

Justice William Rehnquist wrote the dissenting opinion, which Grant said clearly warned of the nature of the courts to allow transfer of development rights to replace eminent domain.

The closing paragraph of his opinion reads as follows:

“Over 50 years ago Mr. Justice Holmes … warned that the courts were ‘in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.”

Rehnquist went on to write that “The city of New York is in a precarious financial state, and some may believe that the costs of landmark preservation will be more easily borne by corporations such as Penn Central than the overburdened individual taxpayers of New York. But these concerns do not allow us to ignore past precedents construing the Eminent Domain Clause to the end that the desire to improve the public condition is, indeed, achieved by a shorter cut than the constitutional way of paying for the change.”

“Smart growth,” Grant told listeners, does exactly the same thing.

“Smart growth policy essentially says that now that the cities have been developed, a farmer or rancher can no longer sell his property for development.

“That’s what’s happening throughout the Northwest. If smart growth is imposed, you cannot develop your property unless you turn over 60 percent of it to open space.

“When this happens, along come the non-profits with their conservation easements. Most of these easements have such stringent restrictions that eventually the landowner can no longer farm or ranch, so the non-profit offers to buy out the landowner for a price well below market value.”

Grant closed his remarks by offering landowners some advice.

“Six years ago I was in Austin. The only difference is that the number of land use trusts has increased greatly. The land that is now tied up by conservation easements has doubled and in some areas tripled, and people are still signing them every day in the belief that they have solved their cash problems and solved the problem of protecting themselves against future species regulations and future restrictions by the movement,” Grant commented.

“If you as a landowner are bound and determined to sell an easement, remember that the easement will control everything. Therefore you need to define very specifically — not vaguely — what’s to be protected, what the use of the underlying land will continue to be. You need to define very specifically the boundaries of the easement. You need to define very specifically the management activities that will be handled and allowed by you, the landowner, and not the easement owner. You need to identify specifically what monitoring will be done. They use their own baseline data, and believe me, if they buy a conservation easement from you, they know what the baseline data is, and most often the rancher or farmer doesn’t.”

Grant encouraged landowners considering a conservation easement to read the contract carefully. He also encouraged landowners to find a competent property rights attorney to review the document.

“Don’t ever sign a conservation easement without understanding every word in the contract,” he stressed.

Finally, Grant told listeners to remember that the landowner has the commodity that the non-profit organizations want.

“The landowner has the most amazing commodity there is; he has the most limited commodity that exists — land — and it’s highly desired.

“We have to begin to get our stories out the same way these liberal organizations are getting theirs out,” Grant stressed. “We have to put pressure on the cities and the counties, on our neighbors, friends, and family. We must urge them not to sign blindly conservation easements or transfer of development rights or any permit process that allows ‘smart growth’ to restrain and restrict the use of one’s property.”