Private Preservation Protections: Preservation Easements

Private restrictions on the use of property Easement A formal agreement between the owner of a historic structure and a government agency or preservation organization giving the latter the right to review and approve changes to the building before they are undertaken. In exchange for giving the preservation organization or government entity a legally enforceable right to protect the historic character of the site that amounts to a property interest, the building’s owner may receive tax or some other economic benefits.

Easements as a form of common law Easements were imported as aspects of the ancient common law of England, have been available for many years. 1. However, preservation and conservation easements did not find extensive use in the United States until the environmental movement was well established.

Qualified Conservation Contribution Qualified Conservation contribution is defined by the Internal Revenue Service as a gift of a qualified real property interest to a qualified organization. A “qualified real property interest” includes “a restriction granted in perpetuity of the use which may be made of the real property.” A “qualified organization is defined broadly to embrace most publicly supported charities. (501c3) status

Conservation purpose Conservation purpose may be Preservation of land areas for outdoor recreation, or education of the general public, for scenic beauty, and is clearly pursuant to Federal, State or Local conservation policy—and will yield significant public benefit. Or The preservation of an historically important land area or a certified historic structure. Certified structures are those buildings or the national register of historic places, or that is placed on the National Register by the time the tranferer’s tax return is filed for the year of transfer. The gift must be “exclusively for conservation purposes in perpetuity.

Importance of appraisals Before and After approach Appraisal of value must stem from: Market data Cost income approaches Before and after valuation must be applied to the property as presently developed, not as might be developed.

Differences between open-space and façade easements Thayer et al vs Commissioner. Open space easement what is the value of the buildings? Within historic districts one method of analysis is note what developers are paying for properties to assemble into larger more dense developments.