John,

Below is an introduction and timeline that can be used for putting together a conservation easement.

An easement involves three main projects that have to be undertaken in a coordinated fashion:

LAND TRUST - A land trust must be willing to accept a conservation easement on a tract.  For this to happen there has to be something worth conserving.  The land trust will have to inspect the property.  If they are interested, they will put forth a proposal which includes an outline of the costs and easement requirements.  This process includes:

  • Performing a baseline analysis to document the condition of the property at the time the donation is made and also identifies the conservation values of the property.  This usually costs $2,000 - $3,000 and takes 3-4 weeks.
  • They will also write the easement document.  This document will be recorded and puts the property in a perpetual easement.  This costs about $1,000 in legal fees and takes one or two drafts over a 2-3 week process.
  • The land trust will also require an updated title.  This can be done by any attorney the property owner would like.  This attorney is usually retained to review the easement document for the property owner.  I always recommend Scott Smith with McRae, Stegall & Peek in Rome.  He is the best there is and I trust him completely.  The cost and time frame for this portion of the project varies with the complexity of the conservation easement.
  • The land trust will usually require a donation in the amount of 1.5% to 2% of the donation amount (if the high appraised value is $1 million and the low value is $200,000, the donation would be $800,000.  The 'voluntary' stewardship donation will probably be $12,000 - $16,000 up front at the time the easement is closed.
  • I usually work with Kathrine Eddins of the Georgia/Alabama Land Trust.  However, there are options for which land trust to use.

APPRAISAL - Choosing an appraiser is probably the most important choice in the whole process.  You definitely need a reputable appraiser who is capable of defending his work.  An MAI appraiser is recommended.  This is a wild card in the process.  Most reputable appraisers will not give you an upfront idea of what the appraised value will be before they start.  Also, the appraisal has to be dated within 60 days of the donation.  So, if this is on a property that you have not owned for a year and a day, there is some risk for changing market conditions.  Most appraisals take 30+ days to complete and cost anywhere from $5,000 - $30,000.  I usually work with Hugh Bass, MAI out of Carrollton.  Mr. Bass has been in business for over 40 years and works with his two sons.  They have a great reputation and are highly qulaified.  They usually charge towards the bottom of the price range.  They may be considered conservative, but I have not lost sleep over their work.  The one downside is that it usually takes 45-60 days due to their workload.  One downside to a very aggressive and expensive appraisal is that it that it can be a red flag for audit.

ENGINEERING - A land plan in line with the highest and best use for the property can pay big dividends.  I have several surveyors who I work with who can work with the topography of the subject property and divide the property 'on paper' in a method that will yield the highest value for the property. The appraiser should be consulted in this process.  Also, the local development authority or planning commission should also be consulted to make sure the plan is legally permissible.

 

TIMELINE

Day 1 - On site inspection

Days 2 -10 - On site meetings with Land Trust, Appraiser & Engineer

Days 10 - 40:

  • Start appraisal process
  • Start and finish engineering process
  • Start and finish land trust baseline process
  • Negotiate fees with land trust and define easement restrictions
  • Have the title updated

Days 40 - 60:

  • Finalize easement document
  • Owner's review of easement document
  • Finalize appraisal

Day 60+ - Close the easement & have the 8283 Form signed 

 

Sample documents from my easement on Big Cedar Creek in Floyd County:

Please keep these confidential:

Pictures from a few of my easement projects