Conservation easements occur when a landowner relinquishes certain property rights in return for money or for charitable donation purposes to protect various aspects of their property. The rights relinquished are often related to limiting property uses, land sales, or future development of the property. Sometimes the easements detail the extent to what will be allowed or required for forest management practices, mining, public access, or other items specific to the property of interest.
When a conservation easement is placed on a property, the landowner still owns the property in fee; however, they are selling certain rights of that property to a third party. Entities such as land trusts, government agencies, or conservation groups are the typical purchasers of these rights. These easement agreements are legally binding, and the restrictions detailed are typically bound to the property into perpetuity. Many times, the donation of a conservation easement can be considered a charitable donation allowing for certain tax savings or deductions for the landowner.
A Before and After real estate appraisal is generally the best way to value a conservation easement and the impact it will have on the value of the property being conserved. Often a Market Approach to value, where the property is compared against recent conservation easement land sales or properties with similar limitations, is the best method to value the easement. In some circumstances an Income Approach to value can be used. This approach is where the potential loss of future income is calculated through a discounted cash flow (DCF) model and analysis.
Steigerwaldt has a team of experts who analyze conservation easements using multiple approaches and methods to fairly value the easement. Our expertise comes from an extensive knowledge of the market for these properties as well as understanding the true implications on value of the specific rights conveyed in the easement. If you are interested in buying or selling a conservation easement, Steigerwaldt can help you value the easement with a supportable appraisal so you have peace of mind knowing the fair value of the easement.
