What is a Conservation Easement?

Agricultural and Conservation Easements are a permanent way you can protect the natural resources, scenic value, and agricultural use of your property.  Agricultural easements typically protect land from development and other non-agricultural uses while ensuring the land is farmed in a sustainable manner.  Conservation easements may or may not allow agricultural uses on the land, depending on your preferences and the characteristics of the property. Such easements are typically used to protect important natural features and wildlife habitat.

Professor Neil Hamilton interviews Mark Ackelson, President of the Iowa Natural Heritage Foundation, on the legacy of Iowa’s land and the use of conservation easements as a tool to protect that legacy.

Benefits of an Easement

Easements are a great way to ensure the land is used in a manner consistent with your values while retaining ownership of the property.  There, however, many legal and tax consequences to consider when entering a conservation easement.  For instance, donating a conservation easement can allow for a charitable deduction on tax returns.  In addition, because an easement typically lowers the fair market value of the land there may be tax benefits to entering an easement prior to a sale, gift, or bequest of the land.  A bequest of a conservation easement can also reduce the taxes on your estate. There are also tax credits that are available for conservation easements in many states, including Iowa.

There are other methods that can be used to protect the natural resources of your land, such as bargain sales and donations with a reserved life estate.  All of the options should be discussed with the organization that will receive the conservation easement.  These organizations include government entities, such as county conservation boards or state and federal agencies, and non-profit organizations that specialize in conservation.

Additional Resources:

The Iowa Natural Heritage Foundation

  • INHF is a non-profit organization specializing in conservation on private land through conservation easements and, in some cases, ownership.  The Foundation also provides extensive information on private lands conservation through the “Landowner’s Options” booklet, available online or in paper format.

The Land Trust Alliance

  • The Land Trust Alliance is an umbrella organization comprised of land trusts across the country.  The Alliance offers of a list of land trusts organized by state.

USDA, Natural Resources Conservation Service: Conservation Programs

Farmland Leasing and Conservation Easements

Provided that agricultural uses are not prohibited by the easement agreement, your land can still be rented for farm production.  However, it is important to ensure your tenant is aware of the restrictions in place.  An effective way to do this is to reference the easement in the lease agreement and ensure your tenant receives a copy, at least of the allowed and restricted uses.

If you are thinking of using a conservation easement in the future, the present leasing arrangement can also impact your ability to enter the arrangement.  The organization receiving the easement will likely want your tenant to relinquish some of their rights to use and possess the property.  This is especially important if you’re engaged in a long-term lease.

However, this should not discourage you from entering a long-term lease.  Rather, you might simply need to do a little extra planning and negotiating at the outset of the agreement.  For instance, you can make sure your tenant understands your intentions and that there is agreement on the possibility of a conservation easement in the future.  Provisions can be used to address the tenant’s right to learn of any easement offers and voice concerns.  Early termination provisions can also be used to protect the tenants investment if an easement precludes further farm production.