Source: https://conservationtools.org/guides/89
Timestamp: 2019-12-06 14:44:29
Document Index: 312202614

Matched Legal Cases: ['§2', '§6', '§7', '§1', '§3', '§1', '§3', '§5', '§5', '§5', '§5', '§3']

Guide to the Conservation and Preservation Easements Act : ConservationTools
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Advantages over Common Law
Conservation Easements Are Valid
Ambiguity Resolved in Favor of Conservation
Enforceable Only by Certain Persons
Drafting Necessities Under the Act
Other Drafting Matters Touching on the Act
Entities with Third-Party Rights of Enforcement
Noting Consistency with Commonwealth Policy
Acceptance of Third-Party Right
Charitable and Tax Status
Outside Activities Must Pose Substantial Threat
Should Non-Conforming Easements Be Amended?
Pennsylvania land trusts and governments formerly had to rely on the common law when managing their conservation easements. The common law derives from centuries of court decisions rather than on laws passed by legislative bodies. Pennsylvania’s common law, like that of other states, contains ambiguities and features that present difficulties for easement stewardship.
The Conservation and Preservation Easements Act, passed by the Pennsylvania General Assembly and signed into law by Governor Tom Ridge on June 22, 2001, provides a simple, easy-to-implement path for avoiding the common law difficulties. It also stands as a strong policy statement of the Commonwealth of Pennsylvania in support of conservation and preservation easements.
For an easement holder to take advantage of the Conservation and Preservation Easements Act, the easement’s granting document must conform with the act’s requirements. Many easements pre-dating the act may already conform—no changes necessary. For an easement that doesn’t conform, its granting document may be amended by the easement holder and the present landowners to bring it into conformance.
Conservation easements not conforming to the act remain valid and enforceable under the common law.
The Conservation and Preservation Easements Act provides distinct advantages to a conservation easement prepared in conformance with the act as compared to an easement relying solely on the common law. Key advantages include the following:
Easement presumed valid. The common law places the burden on the easement holder to prove that the easement is valid. The Conservation and Preservation Easements Act changes this. At its heart, the act says that, as a matter of public policy in Pennsylvania, conservation easements conforming to the act are valid.
Ambiguity resolved in favor of conservation. The common law dictates that ambiguity should be resolved in favor of the landowner. The act reverses this. Ambiguity is resolved in favor of the easement’s and act’s purposes.
Enforceable by holder but not just anyone. The act clarifies key matters as to who has the right to enforce a conservation easement.
The following subsections elaborate on these advantages.
The Pennsylvania General Assembly, in establishing the Conservation and Preservation Easements Act, strongly validated conservation easements as a conservation tool in the Commonwealth:
In §2 of the statute, “[t]he General Assembly recognizes the importance and significant public and economic benefit of conservation and preservation easements….”; and
The statute’s §6, entitled “Validity,” affirms that a conservation easement is valid even though it has certain characteristics that the common law traditionally found to be problematic.
Section 5(c)(2) of the act reverses the common law rule that if a restrictive covenant or other servitude can be interpreted in more than one way, the interpretation most favorable to the landowner governs. (This rule makes sense when interpreting ordinary access easements but not when applied to easements established to provide public benefits consistent with public policy.) The act directs the courts to interpret in favor of the purposes of the easement and the policy and purpose of the act.
Section 6 of the Conservation and Preservation Easements Act resolves any uncertainty about the possibility that a court could invalidate a conservation easement under the common law rules. A particularly vexing problem under traditional common law was the rule that a negative easement (such as a conservation easement) could be enforced only by an adjoining landowner. A 1956 Pennsylvania Superior Court decision (see Appeal of J.C. Grille) brought an end to this rule in Pennsylvania; however, the Pennsylvania Supreme Court never weighed in on the matter. The act removed the possibility of invalidation of conservation easements lacking an adjoining landowner as the holder if the Supreme Court were ever to take up the issue and decide to dramatically part ways with the Superior Court.
The 1956 Superior Court decision greatly expanded the universe of persons who could claim to be beneficiaries of a restrictive covenant. Anyone in the vicinity, whether or not owners of land adjoining the restricted property, and whether or not specifically identified as an intended beneficiary, could have rights of enforcement if a court finds that they are one of the class of persons intended to be benefitted by the restriction. For conservation easements under the common law, this creates an administrative nightmare: each member of a poorly defined group of beneficiaries may challenge a holder’s easement management decisions and changes agreed to by the easement holder and landowners.
Section 5(a) of the act addresses this problem by narrowing the universe of those who have standing to bring legal or equitable actions affecting a conservation easement to:
A person having a third-party right of enforcement (a qualified entity named in the easement).[1]
A person otherwise authorized by Federal or State law.[2]
This list greatly limits those persons and entities entitled to appear in court to bring suit to enforce an easement in accordance with their perceptions of what is correct. The act denies court access to persons and entities not listed and who, under common law, might have sought redress that holders thought was inappropriate or overly zealous.
For more information, see the guide Who Has Standing? Conservation Easements in Pennsylvania Courts at ConservationTools.org.
The Model Grant of Conservation Easement published by the Pennsylvania Land Trust Association addresses this requirement by including in the document’s penultimate article the following provision:
The following notice is given to Owners solely for the purpose of compliance with the Conservation and Preservation Easements Act:
NOTICE {24 point type} This Conservation Easement may impair the development of coal interests including workable coal seams or coal interests which have been severed from the Property. {12 point type}
Prior to establishing the model grant, the Pennsylvania Land Trust Association offered the following draft provision to be placed in the granting document:
By: ________________ Date: ______
The Model Grant of Conservation Easement includes the statutory notice as a matter of course. It may be omitted if no workable coal seam exists, but the better practice is to leave it in. The Pennsylvania Land Trust Association has confirmed which counties contain areas with presently workable coal seams and which do not. However, it has been unable to find an expert willing to state with 100% certainty that no workable coal will ever be found in a particular county. Thus, unless an expert can determine that no coal is present on a particular property, it would be wise to include the coal notice.
Section 4(b) of the act requires that a metes and bounds description of the portion of property subject to the easement be provided in the easement document “[e]xcept when referencing an easement’s boundary using setback descriptions from existing deed boundaries or natural or artificial features, such as streams, rivers or railroad rights-of-way.”
Rather than take the chance that an easement may inadvertently fail to comply with the act’s requirements, a “saving” provision may be included in the granting document stating that the easement is constructed with the intention of conforming to the requirements for conservation easements under the act. For example, §7.09 “Guides to Interpretation” of the Model Grant of Conservation Easement contains the following text in subsection (d):
This Grant is intended to be interpreted so as to convey to Holder all of the rights and privileges of a holder of a conservation easement under the Conservation and Preservation Easements Act.
As discussed above, the act limits the universe of persons with rights to enforce a conservation easement in court. Consequently, if the landowner and would-be easement holder want to ensure that another land trust or government entity has a right to enforce the easement, that entity must be named in the easement document.
Users of the Model Grant of Conservation Easement are instructed to name those entities, if any, in §1.07 of the model and to identify the specific nature of their rights in Article V of the model.
Easements typically contain language allowing the holder to transfer the easement to an organization that is a qualified organization at the time of transfer under Section 170(h) of the Internal Revenue Code. Language could be appended to this provision to also require that the successor organization be qualified as a holder under the Conservation and Preservation Easements Act. (See §3 of the act for the definition of holder.)
Easement drafters may affirm an easement’s role in advancing the policy of the Commonwealth by including the following statement in the public policy statements contained in the background section or opening recitals of the granting document:
Users of the Model Grant of Conservation Easement are guided to include such public policy statements in the “Public Benefit” section of the model’s background article (§1.06(b)) or in the easement’s baseline documentation.
An easement document may be written to grant an entity the right to enforce the conservation easement, often conditioned upon the failure of the holder to do so. Entities were and are sometimes named in a granting document as having enforcement rights or responsibilities without their having been consulted in the matter. The act protects entities from having undesired conservation easements foisted upon them without their knowledge or consent. They may elect to accept a right or duty to enforce by signing a written acceptance and record the acceptance. The flip side is that, until they sign and record a written acceptance, they do not have rights of enforcement. Acceptance of enforcement rights may be part of the granting document or in a separate instrument.
Although the acceptance could be recorded at some future date, a good practice is to record the third-party’s acceptance of the right to enforce from the outset as part of the easement document. This way the easement holder and landowner know that the chosen third-party has in fact accepted the responsibility and, if trouble should develop in the future, there will be one less hurdle for timely enforcement. Including the acceptance as part of the easement itself also simplifies future title work.
Non-governmental easement holders must maintain both their Bureau of Charitable Organizations registration and their IRS 501(c)(3) tax status (see §3).
A typical easement drafting practice is to note a holder’s 501(c)(3) tax status in the “background” or “whereas” section of an easement. As a reminder of the importance of maintaining charitable registration, language may be added stating that the holder “is registered with the Bureau of Charitable Organizations of the Pennsylvania Department of State.”
Section 6 of the act changes the common law rule that the lesser interest (the conservation easement) merges into the greater interest (fee simple ownership) when both interests are held by the same person. Thus, a conservation easement survives even if the easement holder becomes the owner of the property (for example, the landowner donates the land to the holder by will).
The act does not protect conservation easements from eminent domain; rather, it affirms the rights of government and other entities to exercise the power of eminent domain (see §5(d)).
However, the act goes on to provide for compensation for the easement holder “in accordance with the applicable provisions of the conservation or preservation easement which specify a particular allocation of damages…” (see §5(d)(2) and §5(e)).
The act also doesn’t prevent purchase agreements in lieu of condemnation (see §5(e)).
Each state’s common and statutory law regarding conservation easements is unique. The differences can be quite substantial. The Land Trust Alliance publication A Guided Tour of the Conservation Enabling Statutes compares and contrasts the conservation easement enabling statutes enacted by states across the country and discusses the key issues addressed and not addressed by these statutes. First published in 2010, the report was updated in 2014 to reflect changes in state laws.
Easements that do not conform with the act will continue to be interpreted under common law. Holders should consider amending these easements as necessary to come under the act. Whether a holder should pursue the amendment of any particular easement to bring it into conformance depends upon a number of factors:
Would an amendment provide teh holder the opportunity to make other improvements to the easement - for example, to upgrade the restrictive covenants or management terms to reflect the latest understanding of how best to achieve conservation objectives and manage conservation easements? Would an amendment provide the holder the opportunity to expand the conservation objectives of the easement?
Are there changes that the landowner desires and the holder finds acceptable that could be bundled with the changes to bring the easement into conformance with the Act?
Conversely, would opening the document to change cause the landowner to push for changes that the holder would not want to entertain that would ultimately result in bad feelings?
[1] Since “third-party right of enforcement” is defined in §3 as a right provided in the easement document to an entity that is qualified to be a holder (e.g., a land trust or local government), few if any entities will have standing under this category.
[2] Some ambiguity exists regarding who is a “person otherwise authorized by Federal or State law”; the category likely includes the Pennsylvania attorney general but few others.
Andrew M. Loza is the primary author and Patricia L. Pregmon, attorney at law, the contributing author.
The following individuals provided thoughtful com-ments for an earlier edition of the guide: George Asimos, Esq.; Judith A. Eschberger, Esq.; Debra Wolf Goldstein, Esq.; Judith Jordan, Esq.; Jay Layman, Esq.; Patricia L. Pregmon, Esq.; Steven J. Schiffman, Esq.; and John J. Walliser, Esq.
The Pennsylvania Land Trust Association published this guide with support from the William Penn Foun-dation, Colcom Foundation, and the Community Conservation Partnerships Program, Environmental Stewardship Fund, under the administration of the Pennsylvania Department of Conservation and Natural Resources, Bureau of Recreation and Conservation.
© 2016, 2011, 2001