What is the simple description?
Many people nod when asked if they know about conservation easements – but when asked if they could describe them, chuckle nervously. This makes sense! Conservation easements are a straightforward concept, but with lots of flexibility, allowing them to be applied in many different ways. At the root, though, all conservation easements have the same building blocks.
A conservation easement is a device whereby a landowner gives up certain rights or opportunities in order to protect the conservation values of all or part of their land. That "interest in the land" is granted to an eligible conservation organization or government agency. The conservation easement is typically negotiated in perpetuity, and is registered on the title of the land. The landowner retains title, and continues using the land subject to the restrictions in the easement. They are free to sell, gift or will that property, but the easement binds future landowners to the same land use restrictions.
The conservation easement in general – and those land use restrictions in particular – are designed to protect a set of ecological, scenic and/or agricultural values that are catalogued and agreed on at the outset.
To understand how a conservation easement works, think of ownership of land like a bundle of sticks. In that bundle there may be several rights and opportunities - for example the ability to harvest trees, grow crops, modify wetlands, build buildings, etc. With a conservation easement, the landowner grants certain “sticks” in that bundle to a “Qualified Organization” in order to guard the environmental, scenic or agricultural values of the land.
The landowner retains all the other sticks. In other words, s/he continues to be the landowner, while the easement holder is said to hold an “interest” in the land.
For a really short course on conservation easements, take a look at these two documents:
Who can hold a conservation easement?
Not just anyone can hold a conservation easement. The Alberta Land Stewardship Act uses the term “Qualified Organization” to describe an organization or agency that is eligible to receive a conservation easement from a landowner.
There are essentially three types of qualified organizations:
- land trusts;
- municipalities; and
- provincial government agencies.
The rules and regulations around the use of a CE are the same regardless of the type of qualified organization. Most people are familiar with land trusts in this role, but Alberta municipalities are increasingly using this tool.
For more detailed information, see:
What does the law (ALSA) say?
A conservation easement (CE) is a contract between a landowner and a qualified organization. That transaction, however, is enabled and guided by the provincial Alberta Land Stewardship Act (ALSA). There are a number of characteristics of a conservation easement that are directed by the legislation, and a number that are not – those that are not are determined in the negotiation process between the landowner and the qualified organization.
The Alberta Land Stewardship Act outlines the following facets of conservation easements:
- who can hold one;
- for what purposes they can be used;
- how they can be enforced;
- how they can be modified or terminated; and
- the registration process.
Some significant facets of conservation easements that are NOT covered in the legislation:
- what may/may not be included in the list of land use restrictions;
- how long they are in effect (the ‘term’);
- what ecological, agricultural or scenic features or qualities are eligible;
- whether or not the land would have public access;
- what is to be included in the baseline document report or management plan;
- how to value or assess the parcel subject to the easement; nor
- how the land would be stewarded after the conservation easement is granted.
Many people know the Alberta Land Stewardship Act primarily as the mechanism that enables regional planning in Alberta. For that reason, there is often concern that a regional plan needs to be in place before ALSA’s Conservation and Stewardship Tools – like conservation easements – can be used. This is not the case.
What are the allowable purposes?
Every conservation easement must ultimately be drafted in support of one of three purposes, as defined in the Alberta Land Stewardship Act (ALSA). However, these purposes are stated in very general terms, and the negotiators (landowner and qualified organization) have tremendous latitude to identify the features to be conserved and the land use restrictions created in support of a given purpose.
Those purposes are:
- the protection, conservation and enhancement of the environment;
- the protection, conservation and enhancement of natural scenic or esthetic values;
- the protection, conservation and enhancement of agricultural land or land for agricultural purposes.
It is important to note that these purposes have not been used in equal amount. The authors of this website are not aware of any use of a CE for scenic or esthetic purposes. And although Albertans have had conservation easements since 1996, the agricultural purpose was only added in 2009; as such, there is no experience yet with easements for that purpose, and little policy direction.
The upshot is that qualified organizations will be much more familiar with the environmental purpose (e.g., their template CE will be designed around this purpose).
Additionally, those considering applying for their donation of a conservation easement to qualify as an Ecological Gift should also be aware of the distinction in “purpose.” An “environmental” conservation easement accepted by a qualified organization is not automatically deemed to be an ecological gift. Those purposes are slightly more refined (though still general) and require a separate application process.
For more detail on how to reflect these purposes in the drafting of a conservation easement, see:
How are conservation easements valued and compensated for?
No one gets rich granting a conservation easement! Likely the best way to make money in the short term on your land is to intensify development, not limit it. However, the use of a conservation easement allows those landowners seeking to satisfy their personal conservation goals some measure of compensation to offset what might otherwise be an insurmountable financial hit. Many landowners have found that with creative and personalized use of available compensation mechanisms, the financial implications can be quite beneficial.
The primary mechanism for setting a dollar value on the conservation easement is the “before and after” approach. The land parcel is valued by a qualified appraiser based on its highest and best use, then again subject to the land use restrictions. The difference is deemed to be the value of the conservation easement. For this reason, conservation easements in areas with significant development pressures are deemed to be “more valuable” than those in areas with less pressure.
(see this graphic on Valuing Conservation Easements)
There are a number of ways a landowner can be compensated for granting a conservation easement including:
- provision of a tax receipt for a donation;
- payment for the CE (unusual, and usually for a preset percentage of the CE value);
- split receipt (a combination of tax receipt and payment); or
- special consideration of a development proposal.
For more information, see What are the Financial Implications of a Conservation Easement?
What is the history of conservation easements in Alberta?
The idea of conservation easements was born in Massachusetts in the late 1800s, but did not take its current form until the mid-1900s. Alberta created its first conservation easement legislation with amendments to the Alberta Environmental Protection and Enhancement Act in 1996. In 2009, those provisions were transferred (with mostly minor amendments) to the Alberta Land Stewardship Act. The most significant change in 2009 was the expansion of CE purposes to include protection of agricultural land, which has yet to be tested.
There are currently nine land trusts operating in the province, and at least half a dozen municipalities have now used the CE tool. Most conservation easements are held by one of the four largest land trusts, which operate provincially or nationally.
Conservation easements in Alberta have mostly been granted in exchange for a tax receipt, though in rare cases some organizations have paid up to 20% of the value of the land in a cash payment. Most conservation easements have been stand-alone initiatives, but increasingly there are cases of CEs being used as the lynchpin for more complex conservation programs (see Are There Creative Ways to Use CEs?
One hundred plus years of experience in the United States has shown that a perpetual agreement like a conservation easement will face a challenge at some point. In Alberta there have been challenges against two conservation easements, both of which were a result of disputes about specific clauses in the conservation easement documents. Neither situation resulted in any challenge to the basic function and approach of the conservation easement tool.
Over the last decade, two associations were formed to help organizations using the CE tool in Alberta. Unfortunately both are now-defunct. The Alberta Land Trust Alliance was established by the land trust community in 2007 to support land trusts and provide a single voice for the community and the Canadian Land Trust Alliance provided a similar function on the national scale. What does survive is the Canadian Land Trust Standards and Practices to which most organizations using conservation easements subscribe.
Since the creation of the Alberta Land Use Framework in 2007, and its enabling legislation, the Alberta Land Stewardship Act, in 2009, the Government of Alberta has seen conservation easements as a critical tool in delivering its conservation goals under the regional planning process. Because of their voluntary nature and applicability to private lands, CEs provide a conservation mechanism that suits the prevailing regional planning approach of incenting conservation activity. Conservation easements are looked to as a mechanism for private landowners to undertake conservation actions that supports the related goals and objectives of regional plans. Through the Land Trust Grants Program, the Government of Alberta has also sought to support private land conservation where the Province’s conservation goals match with those of a land trust and landowner.