Different projects are crafted in different ways. But in many instances, the landowner will be expected to cover some costs. Of course, in the case of purchased easements, the landowner will be compensated for some or all of the value of that easement. So even where the landowner is asked to pay some costs, the amount is likely to be very low compared to the amount of compensation a landowner is receiving.

There are two primary reasons why a landowner may be asked to cover some costs. One is because the amount of funding available for purchased easements is limited. If more costs are paid by the landowner, then more projects can be done. The second reason is that both LMF and FRPP project require “match” funding. Support from the landowner is often a good way to generate needed match.

A landowner might pay some or all of the following costs, where those costs are not covered by LMF funding:
• appraisal
• boundary line survey
• stewardship contribution

NOTE: MFT and most other land trusts collect a stewardship contribution for each easement, and then use those funds to generate annual revenue to cover the ongoing costs of monitoring the easement. These funds ensure that the easement will be monitored and enforced in perpetuity. MFT aims to collect a $10,000 stewardship contribution for each easement it holds.

Beyond this, it is possible that a given project cannot afford to compensate a landowner for the full value of an easement, perhaps because of limited funds coupled with final appraisals coming in higher than expected. Some projects may, for instance, only provide the landowner with 75% or 85% or 95% of the easement value. Such occurrences are not common, but they are possible. When they occur, they represent—in a way—another cost to the landowner.
In addition, any landowner will be expected to engage an attorney to review the draft easement, and may wish to engage an accountant to advise on any tax consequences.

Other costs may be the responsibility of the landowner or not, depending on the design of the project and the policies of the land trust with which the landowner is working.

If MFT is working with a landowner, we will generally cover the following costs:
• all staff time involved in working with a landowner
• the cost of preparing a draft easement for the donor’s review
• the cost of finalizing that easement after the donor’s review
• title insurance or attorney’s certification of title
• preparation of baseline data (as required for any easement)
• filing fees at the registry of deeds

Property that is permanently protected by easement will generally qualify for reduction in property taxes under one of the state’s tax reduction programs. Sometimes landowners refrain from enrolling land in the Tree Growth or Farmland/Open Space programs, because they want to avoid the possibility of recapture of taxes if they were to later remove the property from the program.

When land is protected by a permanent easement, there is no option to later change the use of the property, and hence, no reason not to place the property in a tax reduction program. Some towns give a larger tax reduction on permanently protected land than they do on land which can be withdrawn from the program. Consequently, landowners placing an agricultural easement on their property already enrolled in one of these programs should notify their town’s tax assessor to see if any further tax savings might be realized.
Because the cost of services for developed land is generally higher than the amount of taxes paid by the owner of the developed land, towns ultimately benefit from permanently protected land.

Each easement is drafted to meet the needs of the landowner (Grantor) and the requirements of the land trust (Holder). Agricultural easements are drafted to be as flexible as possible, in order to promote continued use of the land for agriculture, while still protecting the agricultural values and preventing development.

MFT is a statewide organization that holds easements itself, but which prefers that easements be held by local and regional land trusts (wherever acceptable to both the land trust and the landowner). To this end, MFT works closely with local and regional land trust to help them understand how to develop good farmland projects and craft appropriate agricultural easements. In some instances, a landowner will approach MFT first, and then MFT will reach out to a local or regional land trust to establish a good three-way partnership. In other instances, a local or regional land trust that has been already talking with a landowner will approach MFT for help making the project happen.

Every easement must contain language specifying that the easement can be transferred to another entity that meets certain requirements as defined by statute and IRS regulation. Holder land trusts have an obligation to monitor and enforce their easements. If they are unable to do so they must transfer the easement to an entity that is capable and willing. This could be a local land trust, a statewide land trust, or the State of Maine.

Easements permanently restrict the uses permissible for a property, and hence the land’s market value is reduced. Any development or division not addressed in the easement will not be permitted, and uses not contemplated at the time of creation of the easement may not be permitted. Options to bring in some money by selling off a lot or setting up a non-farm business will no longer exist, unless that possibility was accounted for in the original easement.

If the farm is sold, the new owners take it subject to the restrictions in the easement. The Holder land trust will want to establish a working relationship with the new owners to ensure continued compliance with the easement.

Eminent domain can apply, although the easement creates and supports a public policy argument against taking the land for other uses. If protected land is taken by eminent domain, the compensation paid by the governmental entity is split proportionately between the landowner and the Holder.

In addition to being fully advised as to the legal effects of an easement, the donor should discuss with family and anyone else who might believe he or she has a future interest in the property. Family members may have different perspectives on the value and potential of the property, an understanding of which will allow the donor to make a fully informed decision as to whether or not to proceed.

Feel free to contact us. Alternatively, you may if you live in an area with an active local or regional land trust that has an interest in farmland preservation, you could start by contacting them. If that group is not familiar with MFT’s services, urge them to contact us.