Minimizing the risk of challenge by creating robust conservation easements
The long-term nature of a conservation easement means that the easement is likely to face a challenge at some point in its future. While steps can be taken to create a strong conservation easement and minimize the possibility of challenges, there are different ways that an easement may be challenged. A challenge of a conservation easement may focus on a particular restriction or requirement or may seek to have the conservation easement found invalid.
At the outset, to “challenge-proof” a conservation easement as much as possible, it should be drafted with the expectation that it will have to be defended at some point in the future.
Litigation will always put the individual conservation easement at risk, but it may also have a precedent setting impact on the interpretation of other conservation easements. As such, a qualified organization and the landowner entering into a conservation easement should do everything possible to document their original intentions in putting the conservation easement on the property, so people in the future have an easier time interpreting what the document requires and restricts. An important first step in the process is clearly describing the conservation values that fit the objectives of the qualified organization, as well as documenting the landowner’s vision and how these overlap.
The conservation easement should include a specific and “plain word” description of the purpose(s).When drafting the purpose and restrictions, it is important to consider how they will be read 50-100 years in the future. This means abbreviations, colloquialisms, acronyms and very technical terms should be defined or avoided. A clearly written conservation easement that is specific in how it describes the purpose of the easement, with restrictions that are simple to understand, easy to measure, and written to support the purpose will reduce the risk of infractions. It will also assist those trying to resolve a conflict. A clearly written conservation easement should provide insight into the original intention of the conservation easement.
Additionally, a number of preventative measures can be implemented in the qualified organization’s stewardship procedures to ensure the original conservation purpose of the easement is upheld. These measures include:
- Using consistent baseline and monitoring templates and processes that address the restrictions and purpose of the conservation easement;
- Regular and consistent monitoring visits and reports;
- Open and regular communication between landowners and the qualified organization;
- Having good violation and amendment policies in place in advance of any violations;
- Having a stewardship fund for annual monitoring and stewardship requirements of each property; and
- Having a legal defense fund.
Landowners should ensure that the qualified organizations they are considering working with have the stewardship policy and procedures the landowner feels are the most important to meeting the long-term goals for their property.
Challenges by a party to the conservation easement
These challenges may involve the original landowner and qualified organization that created a conservation easement, subsequent owners of the property, or successor qualified organizations. In these instances, a first step should be to review the conservation easement agreement for any provisions that require mediation, arbitration or other dispute resolution options to be taken. The parties may be bound to use those options first before resorting to litigation. Even if the agreement doesn’t have these provisions, it’s important to keep in mind that dispute resolution is always an option for the parties, and may yield quicker, more satisfactory and less expensive results than litigation.
Aside from litigating in relation to the terms of the conservation easement agreement itself, either party to a conservation easement could also challenge the easement and seek modifications or termination by Court order under the Land Titles Act. A conservation easement may be modified or terminated by Court order if:
- the modification or termination will benefit the persons “principally interested in the enforcement” of the conservation easement; or
- the conservation easement conflicts with a land use bylaw or statutory plan under the Municipal Government Act (such as a municipal development plan); and
- the modification or termination would be in the public interest.
To date, this form of modification and termination has not been used for conservation easements.
Challenges by a third party
Legally speaking, a conservation easement agreement is a hybrid document, because it is broadly enabled by legislation but created by a private contract between a landowner and a qualified organization. Generally, third parties will have very little ability to challenge a conservation easement.
Under contract law, usually only the parties to the contract have rights to change that contract. Their successors will not have such rights unless provided within the contract. Under the Alberta Land Stewardship Act, a landowner can designate a second qualified organization as having power to enforce the conservation easement. This is often done as part of the conservation easement agreement and may give the second qualified organization status to participate or provide input regarding challenges to the conservation easement.
The Court, as a third party, by order can modify or terminate a conservation easement in specific circumstances. Because these circumstances include situations where a conservation easement conflicts with a land use bylaw or statutory plan such as a municipal development plan, it is possible that a municipality, as a third party, could also seek to challenge a conservation easement.
Challenges by the provincial government
The Alberta Land Stewardship Act allows the Minister responsible for that Act to modify or terminate a conservation easement in the public interest. The Minister can use this power even if they are not a party to the conservation easement agreement. Neither the Act nor any regulations currently set out any process for the Minister to exercise this power.
Tax consequences of challenging a conservation easement
If a conservation easement was the subject of tax benefits under the Canadian Ecological Gifts Program [link201: How is a conservation easement certified as a federal EcoGift ], modification or termination [link 201/: How is a Conservation Easement Changed?] of it may lead to tax penalties. This aspect should be considered and reviewed by parties who are considering challenging or may be affected by a challenge to a conservation easement.