Source: http://agrisk.umd.edu/blog/conservation-easement-considerations
Timestamp: 2019-04-19 06:46:12+00:00

Document:
At this year's Maryland State Bar Association Conference the Agriculture Law Section of the Bar co-hosted a panel discussion with the Environment and Energy Section pertaining to legal considerations for conservation easements. One of the panelists was Nancy Russell-Forrester, Esq. Nancy represents the Maryland Agricultural Land Preservation Foundation (MALPF) program and she put together the following checklist for attorneys advising clients considering a conservation easement. I am posting the checklist because it is helpful for both attorneys and landowners considering a conservation easement.
Statutory Authority: Md. Code Ann., Agric. § 2-501 et seq.
Regulations: COMAR 15.15.01 et seq.
I. Conservation Easements in General– What are they?
D. Can be donated or sold by a landowner to an Easement “holder”.
A. What are the landowner’s goals relative to the farm into the future?
1. Does the landowner have children who desire to live on the farm?
2. How would the landowner use the proceeds from the sale of an easement?
3. Does the landowner want to be able to subdivide the farm for the next generation?
a. Subdivision is not a right.
4. Are there any commercial, residential or industrial uses on the farm or on an area of the farm that are incompatible with the MALPF program?
5. What are options for lot selection under the MALPF program?
6. Does the ag operation need a tenant to reside on the farm?
B. Does the land meet the eligibility requirements for the MALPF program?
See Md. Code Ann., Agric. § 2-509 (d) (2016), COMAR 15.15.01*, and MALPF website: www.mda.maryland.gov/malpf.
*Note that the Regulations appearing in Chapter 1 of Title 15, Subtitle 15 refer to eligibility for a “District”. Districts are no longer required to be established prior to sale of an easement, but the eligibility factors listed are still applicable to sale of an easement.
Consult with County Administrator – Roster with contact information attached.
1. Have you reviewed the title to the farm? Is title in a trust, corporation, LLC or other entity?
2. Is the farm one contiguous tract of land or does it consist of more than one parcel?
3. Are all parcels comprising the farm titled identically?
4. Are there other encumbrances on the farm?
a. Are there already prohibitions on development?
b. Are there any prohibitions on agricultural use?
c. Are there any oil and gas leases or any other type of lease, recorded or unrecorded?
d. Are there open mortgages or deeds of trust?
i. Will lender require payoff and release or is lender willing to subordinate to MALPF Easement?
ii. Does the mortgage encumber the entire farm or just part of it?
iii. Is the landowner planning to refinance?
5. Does the landowner have any boundary line disputes with adjacent landowners or are there any encroachments over boundary lines?
6. Does legal access to the land exist?
A. Read the Easement! Look for particular restrictions on subdivision and off-conveyance, as well as lot rights.
B. The farm may not be further encumbered with additional restrictions or easements without MALPF Board permission. See COMAR 15.15.01.17 (General Prohibitions), COMAR 15.15.13 (Forest Easement Overlays), COMAR 15.15.09 (Civil Penalties).
C. Certain types of uses may be permissible only with the Foundation’s approval. See COMAR 15.15.07. See also Md. Code Ann., Agric. § 2-513(c) (2016) and COMAR 15.15.14 (Renewable Energy Generation Facilities), COMAR 15.15.09 (Civil Penalties).
E. The landowner may not subdivide, re-configure, or off convey any part or parts of land (including separately described parcels) that are included in the legal description of the Deed of Easement without MALPF permission. See Md. Code Ann., Agric. § 2-515 (2016) and COMAR 15.15.12. See generally Covered Bridge Farms II, LLC v. State of Maryland, 210 Md. App. 535 (2013), cert. denied, 432 Md. 468 (2013); Stitzel v. State of Maryland, 195 Md. App. 443 (2010), cert. denied, 418 Md. 192 (2011).
(3) The resulting divided parcels from the agricultural subdivision are able to sustain long-term agricultural production.
F. Is a lender seeking to place its lien on less land than the Deed of Easement encumbers?
G. Has the Buyer of MALPF Easement land been given a Notice and a copy of the recorded Deed of Easement within the specified time frames as required by Md. Code Ann., Real Property §10-705? Has MALPF been notified of the transfer of title to the land as required in subsection (f) of that same section?
H. A Release from the MALPF Easement for a lot must be closely examined to determine if the lot is unrestricted, meaning it can be freely sold or conveyed, or if the lot is restricted to use of a particular person or persons for use as a dwelling. See Md. Code Ann., Agric. § 2-513 (b)(2) and (3) (2016) and COMAR 15.15.06. See also Maryland Agricultural Land Preservation Foundation v. Claggett, 412Md. 45 (2009).
This is not an exhaustive list of considerations and attorneys are urged to contact the staff at the Foundation with questions pertinent to their particular situations. Foundation staff may be contacted at 410-841-5860 and will be able to answer most questions you may have about the history of a particular property in the MALPF program. In addition, as the program grows older, both legislative and regulatory changes are likely to occur, which will impact the advice you can give to a client. Of note in this past legislative session is HB 155, (Now Chapter 114, 2017 Laws of Maryland, copy included in materials) which streamlined the process to apply for termination of an Easement approved for purchase by the Board of Public Works prior to September 30, 2004.

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