Carefully Considering Amendments

Parts of this article were excerpted from “Amending Conservation Easements: Evolving Practices and Legal Principles” (2017), found on our website here.

As a charitable organization, chartered under state law, and as a federally tax-exempt nonprofit entity, a land trust has legal and ethical responsibilities to ensure perpetual protection of its easements. How, then, is it possible to contemplate amending “perpetual” easements? The answer is rooted in our inability to predict all of the circumstances that may arise in the future.

The concept of amendment recognizes that neither original grantors nor land trusts are infallible or omniscient, that natural forces can transform a landscape in a moment or over a century and that amendments can strengthen protections as well as weaken them. Exceptional circumstances sometimes warrant amendments, and a land trust should be prepared for that possibility while also remaining vigilant in protecting an easement’s purposes and restrictions forever.

The Land Trust Alliance report “Amending Conservation Easements: Evolving Practices and Legal Principles” was originally published in 2007 and has been updated in 2017. It reveals the complexity and range of perspectives in easement amendment decisions and identifies seven definitive amendment principles that should guide all easement amendment decisions. It also provides questions to help land trusts evaluate amendment proposals and potential risks and includes a range of case studies.

The Dilemma of Change

One thing is certain: All land trusts will face the issue of easement amendments at some point. Unanticipated changes arise from many quarters: natural and created causes, the needs of landowners who make a living from the land to adjust to unanticipated changes in knowledge, business cycles and economic demands, new information not available when the easement was drafted, development of new technologies, and new understandings in conservation science and agriculture. With change come new and unanticipated challenges.

Amendments may allow a land trust to respond to change in ways that can increase the public benefits of an easement by improving and upgrading outdated easement language, increasing resource protections and creating other positive conservation results. However, deciding to execute an amendment should be made consciously and deliberately, in light of all known factors and possible risks. The key is to create a policy based on the guiding principles outlined in the report. This policy governs all amendment decisions to ensure consistency and fairness and to serve as a reminder that all amendments must serve the public good.

Making an Easement Stronger

The case studies in the amendment report are anonymous, but here is a detailed story from the accredited Minnesota Land Trust (MLT) that is not in the report.

In 1993, MLT placed an easement on a property near the Twin Cities that had been owned by the same landowner for a long time. The approximately 80 protected acres consist of a rich oak forest listed as a key habitat for species in greatest conservation need by the Minnesota Comprehensive Wildlife Conservation Strategy 2006, grasslands (including a 15-acre fallow field) and wetlands. The property was primarily used for wildlife habitat, low-impact recreation, residential use and limited agriculture. Upon the original owner’s death, the next people who bought the land wanted to rebuild farther from the road, which improved scenic values, but they were required to tear down some old buildings to meet the square-footage restrictions. Those owners sold the property before completing removal of all old buildings, thereby exceeding the allotted square footage by a modest margin. The next (current) landowners added to the violation by building a swimming pool without MLT’s knowledge or consent.

It is not clear whether the current owners were aware that the existing violation was not resolved nor that the pool was adding to the square footage prior to their purchase in 2014, but they appreciated the protected status of the land. They agreed with MLT when it proposed that, rather than removing the remaining old structures, they restore the fallow field to native prairie. Ann Thies, MLT’s director of conservation stewardship says, “Creating habitat for pollinators is a big issue in Minnesota right now. The size of the prairie will provide good habitat for pollinators, insects, birds, small mammals, as well as create a deep root system in the soil. This restored prairie will become habitat for bees and butterflies, which provide so many benefits.”

MLT determined that the old structures added to the rural character of the protected property and didn’t affect the conservation values and that terminating agricultural rights to the fallow field acreage was of greater value than removing the structures.

“The original easement was old, and we had since changed our format and updated the language,” says Thies. “The current landowners were agreeable to amending and restating the easement to our current template. It clears up certain ambiguities, there are better maps, the language is easier to understand and we have an easier time monitoring. There’s no doubt that all this makes the easement stronger.” The Amended and Restated Conservation Easement was completed in 2016.

The landowners turned in a prairie restoration plan to MLT after consulting with a prairie restoration expert at their own expense. They will also hire a professional to plant the prairie. MLT will follow the restoration effort as part of its annual monitoring.

Do Your Homework

Easement amendments occupy an evolving area of law, and each amendment arises in a unique context of varying facts, circumstances and laws. The guidance in the report is the Alliance’s best effort at identifying and compiling the complexities of the legal and political landscape as of early 2017. Each land trust must consult its own experienced legal counsel and other advisers and determine its own level of risk tolerance in addressing amendment issues.

Amendment decisions ultimately require the land trust’s fully informed best judgment to comply with law, honor promises made to easement donors and others, respect organizational mission, uphold the public interest and create positive conservation results.

Key changes in the 2017 edition include:

• Additional information on documenting no impermissible private benefit or private inurement
• An overhaul of the state-enabling statutes section
• Recent IRS cases and current IRS stance on conservation easement amendments
• Lessons learned from the Form 990 and a recent land trust survey on easement amendments