What Is a Conservation Easement?

Colorado Headwaters Land Trust’s primary land and water protection tool is the conservation easement, a recorded legal document between the landowner and a qualified conservation organization (such as the Colorado Headwaters Land Trust) that identifies the important conservation values on a property and permanently protects those values by restricting development, subdivision and other non-compatible uses of the property. The land remains in private ownership, but the easement is a perpetual restriction on the property. The land can be sold or transferred, but always subject to the terms of the conservation easement.

The grantee of the conservation easement, the Colorado Headwaters Land Trust, perpetually holds the development rights in the conservation easement for the limited purpose of ensuring that they are forever terminated and extinguished and may not be used by the land trust, the Grantor or any other party. The land trust is legally obligated to enforce the terms of the conservation easement. Stewardship of the easement requires annual monitoring of the property by the land trust to record natural or man-made changes to the property, document the land use and management, note possible violations of the terms of the easement, and interact with the easement donors — exchanging ideas, answering questions, discussing the landowner’s vision of the future for the property. Colorado Headwaters Land Trust requests a one-time cash contribution to endow the perpetual monitoring of the conservation easement property.

A property qualified for conservation purposes must include one or more of the following Conservation Values that will provide a benefit to the public:

• Agricultural or scenic open space
• Natural habitat of fish, wildlife or plants
• Land for outdoor recreation and/or education
• Historically important land and/or structures

A conservation easement is attractive to landowners because it is a flexible tool designed for each owner and situation. Each conservation easement is different because it is based on the protection of the specific Conservation Values on that property. The conservation easement is a recognized “land protection mechanism” under both federal and state law. Every conservation easement is written to address the individual needs and desires of the landowner and the property, while meeting the requirement to acknowledge and protect the “conservation purposes,” as defined by federal treasury regulations. Depending on the rights reserved by the landowner, the value of the conservation easement may range from 30-70% of the overall value of the property. A qualified appraiser must determine these values.

There are potential tax benefits for landowners who put a conservation easement on their Colorado land and who donate all or a portion of its value to a land trust. The landowner is entitled to federal income tax deductions and to Colorado tax credits. The tax credits can be used by the landowner or sold for cash through a tax credit broker to a Colorado taxpayer. Also, landowners are often entitled to potential estate and property tax savings.