Conservation Partners, LLC

Easements Step-By-Step

What follows is a simplified outline of the steps in a conservation easement donation and the ways in which Conservation Partners can work with you, your easement holder, and your professional advisors to facilitate the process.

1. Contact: If you are interested in having Conservation Partners work with you and your professional advisors in connection with your easement donation and the preparation and registration of your land preservation tax credit, please call our office at 540-464-1899 or request information here.
2. Initial Consultation With Conservation Partners: We will meet with you by telephone or in person to talk about your land and your easement donation plans. In most situations, we are able to visit the land you plan to protect.
3. Registration Agreement: To get things started, you and Conservation Partners will sign a short Registration Agreement by which you retain Conservation Partners to consult with you and your professional advisors as you move through the easement donation process. Importantly, the Registration Agreement does not commit you to donate an easement; it may be that you ultimately decide that it would be best to wait on your donation or even pursue some other plan with respect to your land.
4. Professional Advisors: If you don’t already have professional advisors, we can help you find an experienced attorney, appraiser, tax advisor, and any other advisor you need. See the “What to Expect from Your Professional Advisors” and “Attorneys, Appraisers, and Accountants with Conservation Easement Experience” sections in our Landowner’s Guide for more details.
5. Choosing an Easement Holder: Certain government agencies as well as private non-profit organizations known as “land trusts” accept easement donations. Conservation Partners can consult with you and your attorney to help you decide which easement holder(s) you should approach with your donation; depending upon the nature and location of your property, you may be able to choose among several potential local, regional, and national easement holders. Representatives from the easement holder will want to visit with you and tour your property early in the donation process.
6. Easement Drafting and Title Work: Once you have settled on an easement holder, the holder’s staff will work with you, your attorney, and Conservation Partners to produce a draft easement. One of the first steps will be for your attorney to obtain a title report or title insurance commitment so that any title issues-such as any mortgages on your property-can be addressed early in the process. Any existing mortgage liens (deeds of trust) must be released or subordinated prior to a conservation easement donation, and negotiation with lenders can be time-consuming.
7. Entity Donors: When the easement donor is a trust, partnership, corporation, limited liability company, or other entity, additional documentation must be provided to the easement holder and the Virginia Department of Taxation (”Tax Department”). Also, Conservation Partners will work with your attorney to obtain a legal opinion addressing the entity’s power and authority to make the donation and enter into contracts.
8. The Appraisal: In order for you to claim tax incentives for your donation, you must have the donation appraised by a qualified appraiser. It is important to involve an appraiser early in the process, as his or her input during the planning and drafting stages can be invaluable. Conservation Partners typically consults with our customers’ appraisers as needed, and we have access to national easement appraisal experts to help out with thorny appraisal problems.
9. DCR Approval: Formal review and approval by the Department of Conservation and Recreation (”DCR”) is required by law with respect to donations that generate a credit claim of $1 million or more (note that past credit claims related to the same parcel may have to be combined with the current claim for purposes of the $1 million threshold). If the preliminary appraisal indicates your donation will be subject to DCR review, Conservation Partners will work with you and your attorney to submit the deed of easement and all other required materials to DCR for preliminary and final review and approval. We are one of the few conservation consultants in the state with significant experience with the DCR approval process.
10. The Donation: When the easement deed has been finalized and approved by the holder, it is signed by you and the holder and recorded in the Clerk’s Office of the Circuit Court of the jurisdiction where the protected property is located. The appraiser will then finalize the appraisal report and deliver copies to you and to Conservation Partners.
11. Credit Registration: Once your easement is recorded and your appraisal completed, you will be eligible to register your tax credit with the Tax Department. Conservation Partners will work with you and your tax advisor in the preparation, collection, and filing of the necessary documentation. The Tax Department will process your application and issue a registration number for your tax credit; depending on the time of year, the Tax Department’s process can take up to two weeks or longer.
12. Pre-Sale Documentation for Credit Sellers: If you intend to sell some or all of your tax credit, you will sign a Credit Marketing Agreement stating the amount of credit you wish to sell, setting forth certain representations regarding the credit, and giving Conservation Partners authorization to sell your credit once we locate buyers. As soon as Conservation Partners has your Tax Department registration number in hand, your credit will be placed in our queue of credits to be actively marketed and sold.
13. Tax Credit Sales: At the closing of each individual sale of a portion of your tax credit, you and the purchaser will enter into a Tax Credit Purchase Agreement (to reduce transaction costs, you will formally authorize an officer of Conservation Partners to sign these standardized Agreements on your behalf). Under each Tax Credit Purchase Agreement, you commit to stand behind the validity of your credit and reimburse the purchaser in the unlikely event your credit is disallowed by the Tax Department. The purchaser’s check for the purchase price will be written to you, and once the check clears, you will pay Conservation Partners our fee for facilitating the sale and reimburse us for costs advanced on your behalf.