Managing Conservation Easements in Perpetuity - Environmental ...

Some land trusts include this representation by the landowner in the
baseline documentation report signature page or in the conservation
easement recital clauses. At a minimum, the project file should include
a letter from the land trust to the landowner, recommending that he or
she obtain independent legal and tax advice. For tax deductible easements,
this letter should also notify the donor that the project must
meet the requirements of IRC Section 170(h) and the accompanying
Treasury Department regulations and inform the donor of the IRC
appraisal requirements.
Addressing item 6 may be more difficult. Here you need to anticipate
litigation and think about what risks are inherent in this particular
transaction. Was it highly negotiated? Were the owners motivated
almost exclusively by financial interests? Were the heirs involved and
supportive or hostile to the grant of a conservation easement on land
they stood to inherit? Are you confident the landowners understood
what they were doing? Were there serious points of contention in the
easement negotiations? The answers to these questions may require the
land trust to obtain and keep additional documentation.
Item 7 concerns the future enforceability of the conservation easement
and the documents needed to demonstrate that the land trust is fulfilling
its legal obligations. In addition to keeping annual monitoring
reports, photos and related data, reserved right and other approvals,
interpretation letters, amendments and violation resolution documents,
a land trust’s completed Form 990 will also contain information
relating to its fulfillment of its obligations with respect to tax
deductible easements.
For more assistance in determining what records your land trust must
keep and examples of what other land trusts have done, see the Sample
Documents beginning on page 105.
Records Retention Decision Tree
The following questions may help your land trust evaluate whether a
document is essential. While not necessarily specific to your land trust,
they can assist you and your attorney in constructing the right questions
to determine if a record should be retained and for how long.
1. Does the law require that the record be retained for a period
of years (for example, contracts must be kept for seven years
Recordkeeping 43
The IRS Form 990 now requires
information on how land
trusts fulfill their stewardship
obligations.