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Stewardship, Enforcement and Legal Defense Costs, Polices and Procedures: Recommendations for Foothills Land Trust (FLT)

Stewardship, Enforcement and Legal Defense Costs, Polices and Procedures: Recommendations for Foothills Land Trust (FLT)

May 2010

Prepared by Tracy Lee and Kim Good

Miistakis InstituteMiistakis InstituteMiistakis InstituteMiistakis Institute

c/o EVDS – University of Calgary 2500 University Drive NW Calgary, AB T2N 1N4

Phone: (403) 220-8968 Email: [email protected] Web: www.rockies.ca

FLT Stewardship and Legal Defense i

Acknowledgements

Miistakis would like to thank a number of individual’s who we involved in discussions about stewardship and legal defense to

inform this report; Barbra Heidenreich (Ontario Heritage Trust), Renny Grilz (the Nature Conservancy of Canada -

Saskatchewan), Sue Michalsky (Paskwa Consulting), Dave Walker (Canadian Land Trust Alliance), Sheila Harrington (BC Land

Trust Alliance), Alan Gardner (Southern Alberta Land Trust Society) and Guy Greenaway (Miistakis Institute).

FLT and Miistakis Institute would like to thank the Alberta Real Estate Foundation and The Calgary Foundation for their

support.

FLT Stewardship and Legal Defense ii

Table of Contents

Acknowledgements.................................................................................................................................................... i

Introduction ..................................................................................................................................................................... 1

Reducing the Risks......................................................................................................................................................... 2

Maintain healthy land owner relations .................................................................................................................. 3

Clarity of Language and Record Keeping.............................................................................................................. 4

CE Violation Policy and Procedure ......................................................................................................................... 4

Amending CE’s............................................................................................................................................................ 6

Stewardship Calculator................................................................................................................................................. 7

Costs per Unit Tab...................................................................................................................................................... 7

Costs per Property Tab ............................................................................................................................................. 7

Total Annual Costs Tab ............................................................................................................................................. 8

Stewardship Calculator Results.............................................................................................................................. 8

Generating Stewardship Funds............................................................................................................................... 9

Stewardship Fund Policy .......................................................................................................................................... 9

Legal Defense ............................................................................................................................................................... 10

Communal Defense Approach............................................................................................................................... 11

Legal Defense Learning Centre ........................................................................................................................ 11

Third Party Assistance ....................................................................................................................................... 11

Communal Defense Insurance.......................................................................................................................... 12

Summary of Recommendations to FLT on Stewardship ....................................................................................... 12

References .................................................................................................................................................................... 14

Appendix 1: Violation Policy and Procedure Template Example .................................................................... 15

Appendix 2: Amendment Policy Example ............................................................................................................ 19

Appendix 3: FLT Stewardship Calculator Manual.............................................................................................. 22

Appendix 4 Stewardship Funding ......................................................................................................................... 28

Appendix 5: Stewardship and Legal Defense Fund Policy Example............................................................... 30

FLT Stewardship and Legal Defense 1

INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION The purpose of this report is to provide an assessment of the costs associated with stewardship and legal defense

and to provide recommendations to FLT for reducing the risks relating to enforcement and defense of a

Conservation Easement (CE).

A wide variety of stewardship costs are associated with holding a Conservation Easement. A land trust needs to

be aware of the costs associated with stewardship and ensure they have policies and plans developed to account

for how they will acquire, save and allocate stewardship funds to protect CE lands in perpetuity. Stewardship

Costs are composed of three main components:

1. annual monitoring,

2. maintaining ongoing good land owner relationships, and

3. enforcement and resolution of violations.

It is important to determine the funds needed to support each stewardship component. The first two components,

annual monitoring and maintaining land owner relations are predictable and can be tracked over time to determine

an accurate annual cost to the land trust. Enforcement and resolution of violations is much more difficult to

estimate. In addition, a land trust must be prepared to defend a CE in the event of a legal challenge by a land

owner aiming to amend or terminate the CE.

Since enforcement and legal defense are difficult to assess, a land trust should consider factors that influence risk

and ensure they have policies in place to reduce risk where appropriate. Factors associated with risk include

number of easements held by a land trust; restrictions associated with conservation easement; relationship with

land owners; change in land ownership; quality of CE agreement, baseline and monitoring reports; and/or

price/value of the land.

Many land trusts have developed a separate legal defense fund for addressing enforcement where legal council is

required and to defend against a legal challenge. In this report we have defined legal defense as either a violation

that requires action such as mediation or litigation to resolve or a legal challenge to the land trust. If, however, a

violation is resolved through communication between the land owner and land trust we consider these activities

stewardship. Therefore, in this report legal defense costs and guidelines are addressed independently of

stewardship costs; although, it is important to understand that implementing stewardship best practices and

maintaining good records will help to reduce the risk of needing legal defense. FLT should have disFLT should have disFLT should have disFLT should have discussions at the cussions at the cussions at the cussions at the board level to ensure agreement with this definition of legal defense.board level to ensure agreement with this definition of legal defense.board level to ensure agreement with this definition of legal defense.board level to ensure agreement with this definition of legal defense.

A number of manuals / modules dedicated to stewardship and legal defense funding were reviewed to develop a

set of recommendations for FLT, including;

1. Doscher, P., B. Lind, E. Sturgis and C. West. 2007. Determining Stewardship Costs and Raising and

Managing Dedicated Funds. The Land Trust Alliance.

2. Heidenreich, B. Draft 2009. A Stewardship, Monitoring and Costing Guide for Natural Heritage

Conservation Agreements. Ontario Heritage Trust and Ontario Land Trust Alliance.

3. Michalsky, S. 2010. Dedicated Stewardship Funding Training Module. Alberta Land Trust Alliance.


4. Rately-Beach L. 2009. Managing Conservation Easements in Perpetuity: Fulfilling the Promise of

Permanence through Keeping Records, Managing Amendments and Upholding Conservation Easement

Integrity. Land Trust Alliance.

REDUCING REDUCING REDUCING REDUCING THE THE THE THE RISKSRISKSRISKSRISKS Before we calculate stewardship and legal defense costs it is important to understand the role a land trust can

play in reducing risks associated with violation rates and legal defense. There are a number of variables that can

influence easement violation rates, many of which the land trust has some control over.

The Land Trust Alliance (LTA) has identified a number of variables that may influence risk to a land trust:

• Number of CE’s held by a land trust (more easements = more risk)

• Types of restrictions (affirmative obligations = more risk)

• Quality of CE, baseline and monitoring reports (clearly written CE, baseline and monitoring report that

follow a consistent policy = less risk)

• Consistency in monitoring (regular monitoring = less risk)

• Record keeping (well kept, clearly written records = less risk)

• Relationships with land owners (open and communicative relationship with land owner = less risk)

• Developing good violation and amendment policies to guide the land trust in violation resolution

(developing procedures for violation resolution = less risk).

In addition there are some external factors over which the land trust has little influence. A survey by the University

of Wisconsin (Betterley Risk Consultants, 2008) highlights some external variables that can increase the risk of a

CE being challenged, such as:

• Increasing real estate prices as a result of alternative land uses,

• Increased conversion rate - changes in surrounding land use, such as development pressure or

cultivation,

• Sales of conserved land to successive owners, and

• Third party trespass.

While a land trust may not be able to control external variables, an understanding these variables in the context of

the local setting can assist a land trust in assessing the risk to a CE. For example, although not a common

occurrence, a property’s value for development may become so high, it becomes possible that a developer may

purchase the land and try to terminate the CE in court. The amount a developer could make from a development on

the CE property would enable the developer to justify the expense of litigation. Even though it is likely the CE would

be upheld, the land trust would need to have a substantial amount of funding available for legal defense in this

case. In other words (all other things being equal) a CE associated with areas where land prices and land use

conversion rates are high are at a greater risk and need more attentive monitoring and communication with land

owners than CE properties where land prices and conversion rates are significantly less.

There are cases where a third party trespasses and violates an easement, such as a neighbor, oil and gas

developer and/or utility company removing vegetation or trees. Many land trusts stress the importance of getting

to know neighbors and others active on the landscape where they hold CE’s. This can be done through meet and

greet events or workshops hosted by the land trust. In addition, designing best practice manuals and working with

the land owner and utilities or resource extraction companies can help to reduce any negative impact on the

conservation value of the CE.


Once a land trust starts to hold a number of easements it may be advisable to rate each easement in terms of the

risk to easement violations and challenges. This enables a land trust to prioritize monitoring or determine the

intensity of monitoring as well as prioritize programs aimed at building positive relationships with land owners. A

sample template has been drafted for FLT to evaluate the level of risk (for violations and legal challenge) for each

conservation easement property (see below – numbers included are only examples). FFFFLT should review the LT should review the LT should review the LT should review the template and assess each prtemplate and assess each prtemplate and assess each prtemplate and assess each property to determine current risk levels. operty to determine current risk levels. operty to determine current risk levels. operty to determine current risk levels.

Many of the variables identified above can be influenced by land trusts to reduce the risk associated with a CE. A

land trust can reduce the risk of easement violations and increase its ability to defend an easement by maintaining

healthy relationships with the land owner, ensuring good record keeping and developing a violation resolution

policy and procedure to guide enforcement of conservation easements.

Maintain healthy land owner relations

Land trust experts consulted in Canada and literature from the Land Trust Alliance stress the importance of

building and maintaining healthy land owner relationships. Violations and challenges are often associated with

second or third generation land owners who did not enter into the CE with the land trust. A policy geared toward A policy geared toward A policy geared toward A policy geared toward new new new new land ownerland ownerland ownerland owners, such as meeting and reviewing the s, such as meeting and reviewing the s, such as meeting and reviewing the s, such as meeting and reviewing the CECECECE with new with new with new with new land ownerland ownerland ownerland owners as soon as possible is important.s as soon as possible is important.s as soon as possible is important.s as soon as possible is important. Surveys in the US indicate violations by new land owners often occur prior to meetings held with the land trust

holding the easement. Often, land trusts are not notified when land changes hands and many land trusts do not

have a mechanism for notification. Regular communication with the land owner will help to increase the likelihood

that a land trust is aware of an ownership change. Regular communication with the land owner is the first line of

enforcement and legal defense and should be considered a high stewardship priority. Many land trusts work with

land owners on habitat management projects (e.g. weed pulls, fence mending, and water systems), publish

newsletters and host workshops to help communicate best management practices. Outreach activities with land

owners help to strengthen the relationship between land owners and land trusts and also establish comfortable

communication channels, thus reducing the risk of violations and challenges to the CE.

Conservation Property Risk Assessment T(0)/F(1)

Internal Factors Property 1

Property 2

Property 3

Property 4

Baseline completed/signed 0 1 0 0

Annual monitoring reports completed and signed 0 0 0 0

No violations recorded 0 0 1 0

Intent of landowner for CE was conservation 0 0 1 0

Dealing with original land owner 0 0 1 0

Good relationship with land owner. 0 0 0 1

External Factors

Land prices stable 0 0 0 1

Land conversation rates low 0 0 0 1

No third party concerns 0 0 0 0

Risk Level 0 1 3 3

*Risk increases with higher number (scaled 0-8), with zero as lowest risk


It is recommended that FLT develop a policy for addressing new It is recommended that FLT develop a policy for addressing new It is recommended that FLT develop a policy for addressing new It is recommended that FLT develop a policy for addressing new land ownerland ownerland ownerland owners. FLT should also consider building s. FLT should also consider building s. FLT should also consider building s. FLT should also consider building and maintaining and maintaining and maintaining and maintaining land ownerland ownerland ownerland owner relationships as an import relationships as an import relationships as an import relationships as an important component of stewardship (including associated ant component of stewardship (including associated ant component of stewardship (including associated ant component of stewardship (including associated stewardship costs). stewardship costs). stewardship costs). stewardship costs).

Clarity of Language and Record Keeping

Other areas where a land trust can help to reduce risk relates to the development and implementation of protocols

around CE, baseline documentation and monitoring reports. All of these documents may be needed to help uphold

the easement in court. A land trust needs to consider all official documents as lines of defense and therefore

remove all vague language from templates and protocols, ensure the intent or purpose of the CE is well defined,

maintain good records of all communications with land owners and maintain clear, consistent baseline and

monitoring reports. It is advisable that land owners and land trusts sign baselines and monitoring reports to help

document communication and agreement over the condition of the land.

The wording of easement restrictions should be carefully considered. A land owner should be able to easily

interpret the restrictions to increase likelihood of compliance. In addition, a land trust needs to have detailed

documentation on how they are monitoring the property to determine if restrictions have been violated. Some CE’s

have affirmative obligations, whereby a clause in the CE outlines management goals or conditions that need to be

met. For example an affirmative obligation may be that range health condition must be maintained at a certain

level. A land trust with affirmative obligations needs to consider how they will monitor and measure the clause to

ensure the property is in compliance.

It is recommended that FLT document the process for how records are kept (electronic, hard copy), shared, It is recommended that FLT document the process for how records are kept (electronic, hard copy), shared, It is recommended that FLT document the process for how records are kept (electronic, hard copy), shared, It is recommended that FLT document the process for how records are kept (electronic, hard copy), shared, maintained and destroyed. maintained and destroyed. maintained and destroyed. maintained and destroyed.

CE Violation Policy and Procedure

The expected rate of violations to a CE is difficult to determine. The LTA provides a rough guideline – for every 20

CE’s a land trust holds one violation of varying degree can be expected annually. For FLT, For FLT, For FLT, For FLT, at this point at this point at this point at this point one violation one violation one violation one violation every 10 years every 10 years every 10 years every 10 years can be expected can be expected can be expected can be expected based on current number of based on current number of based on current number of based on current number of CECECECE’s.’s.’s.’s. Resolving a violation may involve a series of steps depending on the severity and scope of the violation in terms of impact on the intent of the CE and

willingness of the land owner to resolve the violation. A land trust may resolve the violation through

communication with land owner, negotiations with the land owner, amending the CE, entering into a mediation

process or through litigation. A number of these steps will require legal advice.

FLT should track the number of violations annually, how they were resolved and the costFLT should track the number of violations annually, how they were resolved and the costFLT should track the number of violations annually, how they were resolved and the costFLT should track the number of violations annually, how they were resolved and the costs associated with s associated with s associated with s associated with resolution to ensure enforcement costs are accurately considered in the future. resolution to ensure enforcement costs are accurately considered in the future. resolution to ensure enforcement costs are accurately considered in the future. resolution to ensure enforcement costs are accurately considered in the future.

The ultimate goal for the land trust when addressing a violation is to implement a violation resolution with the land

owner that ensures the purpose of the CE is upheld for the least amount of cost while minimizing damage to the

relationship with the land owner. Many land trusts have developed policies and/or procedural templates for

dealing with violations to increase the likelihood of finding a desirable resolution for all parties involved. Policies

and procedures for addressing violations should consider who determines the best course of action and who in

the land trust organization should be in contact with the land owner to present a resolution. For violations deemed

major, land trusts should consider legal advice before approaching a land owner.

A land trust should also identify who pays for the costs of addressing violations, in some cases the land owner is

required to pay the costs back to the land trust associated with enforcement of easement violations or legal


defense. However some land trusts prefer not to charge the land owner if a violation is settled through

communication between a land owner and land trust as a way of maintaining good relations. However, many land

trusts have a clause in the CE that requires the land owner pay for the legal costs associated with a law suit.

FLT should develop a violation policy and procedures guide includingFLT should develop a violation policy and procedures guide includingFLT should develop a violation policy and procedures guide includingFLT should develop a violation policy and procedures guide including: o Philosophy statement

� Why is it necessary to enforce a CE?

� FLT’s approach to enforcing conservation easements supports the mission.

� FLT’s philosophy on upholding grantors interest and purpose of easement.

o Discovering and Assessing the extent of the violation

� Describe a system of how FLT discovers and responds to violations.

� How to verify the violation.

� Determine who violated the easement.

� Determine severity of the violation (e.g., impact on the intent of the CE, area impacted,

location impacted, level of difficulty in fixing the problem, legal implications and public

perception of the issue).

� Identify types of violations (e.g., technical, minor, moderate or major) and possible

responses to each type.

o Determining Reponses to Violations

� List of potential responses based on the context of the situation:

o Is the violation a clear breach of restrictions in the CE? Is the language in the CE

ambiguous? Is the issue mentioned in the CE?

o Will the violation set a precedent?

o Accidental or intentional, repeat violation?

o Who caused the violation?

o What are the tools/approaches for addressing the violation?

o Are there third party interests that have to be engaged?

o Who is responsible for different components of violation process?

o Documenting the Violation

� Identify what level of documentation is important depending on the severity.

� Who will document the violation (ties into monitoring reports)?

o Addressing the Violation

� How to communicate with the land owner?

� Who will communicate with the land owner?

� What is the process if the land owner disputes the violation?

� Steps to remediate the violation.

� Who responds to media inquires or calls from third party?

o Additional Requirements

� Whether the land trust will require the land owner to reimburse the organization for its

costs?

� A prohibition against private benefit.

o Statement about post enforcement assessment, education and review of violation policy

o Insert the date of the policy and the date of its last revision.

Appendix 1Appendix 1Appendix 1Appendix 1 includes an example of a violation policy from the Dutchess Land Conservancy in Dutchess County,

New York (www.dutchessland.org/).


Amending CE’s

A land trust may recognize that an amendment to an already registered CE may strengthen the CE or improve the

ability of a land trust to defend the CE. Usually a land trust has a policy that all amendments result in a neutral or

positive change to the conservation value of the property. For example, a land owner may want to remove the

building rights from a CE or change the location of a building envelope and it does not result in a negative impact

to the intent of the CE. The land owner in this case may request an amendment to the CE. Most land trusts will

face the issue of having to amend an easement to clarify language or intent or to resolve a violation where there is

no loss of conservation value to CE. Amending a CE is an evolving field and requires each situation to be assessed

in the context of the CE, local law and requires a balanced approach of upholding the conservation interests of the

property and maintaining good land owner relations.

Within the land trust community there is some disagreement on how often a land trust should consider an

amendment from almost never, (e.g., it should always be discouraged) to amend at will. In Canada a land trust

must also consider “change in use” concerns with respect to Eco-gifts. FLT should engage in discussions at the FLT should engage in discussions at the FLT should engage in discussions at the FLT should engage in discussions at the board level to decide on their philosophy and develop an amendment policy to guide future decisions.board level to decide on their philosophy and develop an amendment policy to guide future decisions.board level to decide on their philosophy and develop an amendment policy to guide future decisions.board level to decide on their philosophy and develop an amendment policy to guide future decisions.

FLT should develop an amendment policy including the following information:FLT should develop an amendment policy including the following information:FLT should develop an amendment policy including the following information:FLT should develop an amendment policy including the following information: o Philosophy statement

� Why is it a necessity to amend a CE?

� Amendments in relation to FLT’s mission and goals.

� FLT’s philosophy on upholding the grantors intent and purpose of CE.

o Amendment Principles (to be acceptable an amendment meets certain guidelines):

� Serves the public interest and is consistent with FLT’s mission.

� Complies with national, provincial and municipal laws.

� Does not jeopardize the tax exempt status or standing as a charitable organization.

� Does not result in private benefit.

� Consistent with conservation purpose and intent of donor or grantor of funding.

� Has net benefit or neutral effect on conservation values protected by the CE.

o Other Considerations

� Public perception test – how will amending the CE be perceived by other land owners,

local community, land trust community and public?

� Will the amendment effect stewardship and administration costs of the CE?

� Are there other stakeholders or parties that should be involved in the process (e.g.,

Environment Canada if CE was an Eco-gift)?

o Allowable purposes of Amendments

� What are the circumstances where a CE could be considered for an amendment?

Consider:

• Prior agreement,

• Correction of an error or ambiguity,

• Consistent with conservation purpose and enhances value,

• Upgrade language and format, and

• Reconfiguring of easement area.

o Amendment Procedures

� Initiating the proposed amendment (process for land owner vs. land trust initiating the

amendment.

� Costs (Who pays for amendment?).

� Decision-making (who evaluates, when legal council is involved and who makes final

decision?).


� Reviewing request (Does the amendment comply with land trust policies).

o Review

� Process and timeline for policy review and updates.

� Always include the date of policy and of last revisions.

Appendix 2Appendix 2Appendix 2Appendix 2 includes an example of an amendment policy from the Gallatin Valley Land Trust in Bozeman, Montana.

(www.gvlt.org/).

STEWARDSHIP CALCULATSTEWARDSHIP CALCULATSTEWARDSHIP CALCULATSTEWARDSHIP CALCULATOR OR OR OR A wide variety of stewardship costs are associated with holding a conservation easement. A land trust needs to

be aware of the costs associated with stewardship and ensure they have policies and plans developed to account

for how they will acquire, save and allocate stewardship dollars to protect conservation easement lands in

perpetuity. The stewardship calculator was developed to assist FLT in estimating the annual costs of stewardship.

The calculator currently supports cost tracking for 15 conservation easement properties. Once FLT has more than

15 properties they will likely need to change the way costs are tracked, such as by setting annual stewardship

costs based on small, medium and large properties. Or if FLT would like to continue tracking costs on a case by

case basis, a stewardship calculator could be developed using database software such as Microsoft Access.

Stewardship Costs are composed of three components:


2. maintaining ongoing land owner relationships, and


The calculator does not currently have a line item for legal defense, but it could be added in per property. The

calculator was developed in Excel and is composed of three main tabs in the spreadsheet, unit costs, CE

Properties (labeled 1-15) and Total Annual Costs.

A manual has been developed to aid FLT personnel in using the calculator (see Appendix 3).

Costs per Unit Tab

FLT stewardship activities are currently undertaken by volunteers from the board and a seconded staff member 1

day a week from the MD of Foothills. The stewardship calculator has been designed to enable FLT to track costs

associated with a variety of personnel (staff, MD Foothills staff, volunteers, board members, consultants, legal

council) both paid and unpaid. In addition a cost per hour has been estimated for paid and unpaid personnel. FLT

can add personnel into this tab, such as new partners and can adjust the cost per hour. It may be important to

track the contribution (in paid time) from volunteers for stewardship to enable FLT to report on volunteer

contribution for grant writing or to better understand the costs of staffing needs in the future.

Costs per Property Tab

Costs associated per CE are divided into six components;

1. Annual monitoring:

o Preparing for site visit: review CE restrictions and baseline report, calling land owners and setting

up visits,

o Site visit: fill out monitoring template, meeting/interviewing land owner,


o Write up,

o Review of monitoring report by board member, and

o Follow up with land owner.

2. Communication with Land owner

o Permissions activities within the CE that require communication, permission from the land trust,

such as areas for future development. These typically are different per CE and require time for

communication, it is important to access how frequently these activities will occur.

o Information transfer – time for FLT to communicate materials of interest to the land owner.

3. Administrative costs

o Records management, communicating with board members and coordinating volunteers to

undertake monitoring.

4. Insurance costs

5. Minor violations/Amendment to CE

o Over time there are likely to be minor violations to the CE. Hopefully minor violations can be

addressed through communication with the land owner, but may require some legal advice.

o It may be necessary to amend the conservation easement agreement, although this is not a

common practice, there are costs associated with it.

o Legal counsel may also be required to provide clarification on the CE or advice on how to address

a violation.

6. Expenses

o Expenses associated with each CE include insurance, mileage for site visit, air photo purchase,

printing, and postage costs.

Total Annual Costs Tab

The costs per property are rolled up into the total annual costs tab. There are a number of annual costs associated

with stewardship that are common to all CE’s, these are tracked under the total annual costs tab. Cost associated

with general stewardship include:

1. Land owner Outreach Activity

o Building land owner relations through habitat management projects (e.g., fencing, weed control, water system), newsletters and/or hosting workshops on topics of interest.

2. General Stewardship Expenses

o Administrative costs associated with office space and overhead.

o Land owner Outreach Activities may have expenses for printing newsletters, organizing workshops and/or costs associated with land owner on habitat management projects.

Stewardship Calculator Results

The resulting values will help guide FLT in the development of a stewardship plan for existing properties, including

a set of strategies to secure necessary funds to steward the properties in perpetuity.

FLT currently has two conservation properties, an initial run through was completed with the calculator based on

current personnel and volunteer commitment estimates. FLT needs to generate approximately $2,000 annually to FLT needs to generate approximately $2,000 annually to FLT needs to generate approximately $2,000 annually to FLT needs to generate approximately $2,000 annually to support asupport asupport asupport annual stewardship costs of two cnnual stewardship costs of two cnnual stewardship costs of two cnnual stewardship costs of two conservation easement propertiesonservation easement propertiesonservation easement propertiesonservation easement properties. This calculation is based primarily on a volunteer work base and it does not include costs associated with legal defense. It is advisable that the board

review the stewardship calculator to confirm the costs per unit, hours, responsibilities and frequency for each CE.


Generating Stewardship Funds

The most common practice for ensuring a land trust has the funds for stewardship in perpetuity is to create a

stewardship endowment and a stewardship fund policy.

To fund the two FLT conservation easement properties in perpetuity, based on the current estimate of $2,000 per

year, through a stewardship endowment, FLT would need to secure an endowment of approximately FLT would need to secure an endowment of approximately FLT would need to secure an endowment of approximately FLT would need to secure an endowment of approximately $$$$50,00050,00050,00050,000 (based on expected 5% annual interest). If the fund achieved a 5% return rate and we considered a 1% inflation

rate, approximately 4% of the endowment would be available for the land trust to use on an annual basis for

stewardship.

Alternatively, some land trusts currently support stewardship costs through operating funds, but usually this is

linked to organizations with a strong membership base that pays annual fees. Technically a land trust could also

generate funds for stewardship per year through project grants, but over time as properties with CE increase the

costs will likely be more difficult to generate through project funding. This may be a short-term strategy while a

land trust seeks funds to help build a stewardship endowment.

FLT should develop a Stewardship Fund PolicyStewardship Fund PolicyStewardship Fund PolicyStewardship Fund Policy to describe how funds will be raised, managed and distributed into

the future.

The Land Trust Alliance provides guidelines to land trusts that have conservation easement properties without the

funds required for stewardship. The LTA suggests land trusts develop a five year stewardship plan for each property that outlines how the land trust will acquire the funds to cover stewardship in perpetuity. The stewardship plan should highlight how stewardship will be covered in the meantime as the land trust generates

the funds for an endowment. There are a number of ways a land trust can fundraise to build a stewardship

endowment fund; see a listing of ideas in Appendix 4Appendix 4Appendix 4Appendix 4.

Stewardship Fund Policy

A stewardship fund policy typically has four key components;

o Way to determine costs,

o Requirement to secure funds for stewardship at securement,

o Highlights when there can be an exception for securing funds at securement, such as including

the development of a stewardship plan, and

o Investment strategy.

Within this policy a land trust also needs to describe the operating procedures (e.g., who can do what),

understand the board’s level of comfort with risk, define appropriate investment types and define allocations of

annual interest. A stewardship fund policy may be a component within a land trusts overall investment and

financial management policy, whereby all funds associated with the land trust are described. Or a stewardship

fund policy may be part of a larger stewardship policy which also includes details on stewardship funding plans

and violation policy and procedures.

FLT should develop a Stewardship Fund Policy including:

o Land trust philosophy:

� Why is an easement stewardship fund necessary?

o Purpose of the fund

� Will it be used to support monitoring expenses only or some level of enforcement as well?

� Are there two separate funds for stewardship and legal defense?


� What are the stewardship costs to be covered?

o Managing the Fund

� Building the fund

• What methods are used to secure funds with the easement, and what sources

are used?

• What is the target amount per easement to be deposited to the fund?

• Under what circumstances will the land trust accept an easement without an

accompanying stewardship contribution?

• How will the land trust add appropriate funding later (e.g., Stewardship Plan)?

� Fund management goals and guidelines

• Is it a true endowment, in which principal cannot be eroded?

• Can all of the income be used, or will part of it be reinvested to grow the fund?

� Authority governing management of the fund

• Who is in charge of securing contributions, investing and managing the fund, and

making decisions?

• Who has authority to withdraw from the fund?

� Criteria for withdrawals

• How much can be withdrawn?

• Earnings or growth only?

• Based on a three-year rolling average of principal?

• Reinvest a portion of earnings?

• For what purposes?

• Direct monitoring expenses?

• Support of stewardship program, including indirect and overhead costs?

• For legal defense?

• If the fund is drawn down for an enforcement action, will it be replenished?

� Review: What is the process by which the policy will be reviewed and updated?

LEGAL DEFENSELEGAL DEFENSELEGAL DEFENSELEGAL DEFENSE A land trust needs to define when an enforcement action is considered legal defense; as previously mentioned, a

land trust typically develops separate legal defense and stewardship funds and develops policies to identify how

the funds will be collected, managed and used. Although a land trust may consider itself low risk for requiring legal

defense, lessons from the LTA suggest that it is not a matter of if a land trust may need legal defense funding it is a

question of when.

Although a land trust aims to avoid litigation, sometimes in order to enforce a CE or defend against a challenge a

land trust may find it has no other choice. This can be costly for a land trust. A review in 2005 of US land trusts

indicated that the average litigation costs “range from $25,000 to $250,000 for a typical trial in a typical jurisdiction.

The average historic cost of all claims was $38,000 including those that did not go to a full trial. This does not

capture the risk of an appeals process.” Although these are average costs, there are several examples where land

trusts spent well over $250,000 on “outside” litigation fees to protect or enforce an easement.

The Land Trust Alliance has developed a general guideline for legal defense, whereby they recommend a land trust acquire a minimum amount of $50,000. After a land trust has acquired 15 CE an additional $1,500-3,000 should be added to the fund for each CE.


Some land trusts use stewardship funds to support legal defense, while others develop separate stewardship and

legal defense funding. Land trusts that incorporate these funds have the advantage of having to manage only one

fund. However, there are some clear disadvantages to this approach such as possibility of using all their

stewardship funds on a legal defense case. Land trusts are typically going the route of having two separate funds

with policies developed around each fund that state the purpose, how funds are generated, how they can be spent

and who makes the decisions on the funds. Appendix 5Appendix 5Appendix 5Appendix 5 displays an example of a Stewardship Fund and Legal

Defense Fund policy written up in one document from the http://www.ctnc.org/site/PageServer.

A legal defense fund policy is written up in a similar format as the Stewardship Fund Policy; however, a land trust

should identify how they plan to replenish the fund if legal defense funding is utilized.

Communal Defense Approach

Research projects in the US have explored community approaches to reduce the burden of legal defense. Some

of the activities include forums for sharing knowledge and lessons learned, relying on third party assistance or

development of communal defense insurance. Discussion on communal approaches is less developed among

Canadian land trusts likely because CE’s are a newer conservation tool, land owners who signed the CE are still on

the property and as a result, cases of litigation in Canada are rare. Regardless, it is advisable that the land trust

community prepare itself for the possibility of a challenge. The ideas explored below are to instigate discussion

within the Canadian land trust community. Communal approaches have not been fully explored in the Canadian

legal context.

LLLLEGAL EGAL EGAL EGAL DDDDEFENSE EFENSE EFENSE EFENSE LLLLEARNING EARNING EARNING EARNING CCCCENTREENTREENTREENTRE The LTA has developed a legal defense learning centre, whereby land trusts can review documents, reports and

results of court cases to help inform their practices and reduce the risk of challenges. A Canadian equivalent

whereby land trusts can share lessons learned from enforcement and challenges will help the community

proactively reduce the risk of challenges.

TTTTHIRD HIRD HIRD HIRD PPPPARTY ARTY ARTY ARTY AAAASSISTANCE SSISTANCE SSISTANCE SSISTANCE There are examples where a third party may help a land trust defend a CE, such as government support, non-

profits designed to protect conservation interests (e.g., Ecojustice),or pooled legal advice from law schools or law

firms.

In the US, a number of states actively protect the intent of a CE because it represents a public service. For

example, the state of Massachusetts provides legal defense support to conservation easements, as all CE are

approved by the state, which has a vested public interest in upholding easements. A research paper by Jessica

Jay (2007), noted that “Massachusetts prepared to step into its first enforcement action in 1997, when the Attorney

General wrote to land owners violating their conservation easement and indicated the Attorney General’s intent to

become involved in the case. The land owners settled out of court shortly thereafter and it is thought that the

perceived threat of government involvement in the enforcement action was enough to encourage these land

owners to resolve the issue out of court.” Although this has proven to be an effective mechanism for protecting

CE, government involvement may scare some private land owners into entering an agreement or it may not be an

option in many regions.

Another possibility is the exploration of pooled defense approach; this could take on many forms, but one

approach could include land trust pooling resources and fundraising as a community to generate a fund to be used


for legal defense. This type of approach would require the development of a set of criteria to enable the

community to decide on when and the funds would be dispersed.

Additionally, groups such as Ecojustice (formally Sierra Legal Defense) could be approached to assist with legal

defense cases. Their ability to help would depend on timing, how precedent setting the case is and Ecojustice’s

capacity.

CCCCOMMUNAL OMMUNAL OMMUNAL OMMUNAL DDDDEFENSE EFENSE EFENSE EFENSE IIIINSURANCE NSURANCE NSURANCE NSURANCE The LTA has investigated a communal insurance program, whereby land trusts pay a fee per easement per year to

ensure protection against challenges and assistance with enforcement of CE’s when violations occur. The risks

associated with these activities are often very difficult to assess and commercial insurance companies in the US

were not interested in providing group insurance. The LTA is in the process of establishing its own captive

insurance program and are currently seeking commitment from membership to proceed with a national communal

defense program.

Some of the concerns expressed by land trust experts in Canada include the variability in standards between

different land trusts (e.g., tying one’s fate to another), a smaller number of land trusts and CE’s to contribute

toward a communal defense approach and different insurance and CE legislation between provinces. Therefore, a

communal approach to legal defense is likely best explored by provincial / regional alliances aimed at supporting

the land trust community.

Given the lessons learned from the US experience, it would seem prudent that the land trust community in Canada

proactively explore options to assist the community to enforce and defend conservation easements in the future.

FLFLFLFLT should where possible support and encourage initiatives aimed at exploring a communal approach to legal T should where possible support and encourage initiatives aimed at exploring a communal approach to legal T should where possible support and encourage initiatives aimed at exploring a communal approach to legal T should where possible support and encourage initiatives aimed at exploring a communal approach to legal defense. defense. defense. defense.

SUMMARYSUMMARYSUMMARYSUMMARY OF RECOMMENDATIONS OF RECOMMENDATIONS OF RECOMMENDATIONS OF RECOMMENDATIONS TO FLT ON STEWARDSHITO FLT ON STEWARDSHITO FLT ON STEWARDSHITO FLT ON STEWARDSHIPPPP AND LEGAL DEFENSE AND LEGAL DEFENSE AND LEGAL DEFENSE AND LEGAL DEFENSE The following recommendations are provided to FLT to assist them in understanding costs and to reduce risks

associated with stewardship and legal defense;

o Assess from FLT’s perspective the internal and external risks to the land trust to guide

development of stewardship and legal defense policies and procedures (see Appendix 1).

o Develop a New New New New LandLandLandLand ownerownerownerowner Policy; Policy; Policy; Policy; include the mechanism used to determine when there is a new

land owner, who from the land trust communicates with the new land owner, what information will

be provided to new land owner.

o Establish guidelines for record keeping including storage of information (electronic and hard

copy), maintenance and destruction of records.

o Develop a Violation Policy, Violation Policy, Violation Policy, Violation Policy, include information on documenting violations, assessing the impact,

violation resolution procedures and tools to minimize impact on CE intent and relationship with

land owners.

o FLT should track the number of violations annually, how they were resolved and the costs

associated with resolution to ensure enforcement costs are accurately considered in the future.

o Develop an Amendment PolicyAmendment PolicyAmendment PolicyAmendment Policy, include when it is acceptable for an amendment to be considered,

components that can be amended and who makes the decisions.


o Review stewardship calculator to assess the costs per unit, hours, responsibilities and frequency

for each CE.

o Board level agreement on definition of legal defense.

o Board level agreement on the amount of funds being raised for stewardship and legal defense per

property or in general.

o Develop a Stewardship Fund PolicyStewardship Fund PolicyStewardship Fund PolicyStewardship Fund Policy – that defines the process of acquiring funds needed for

stewardship, financial model for funds and defines how the money can be spent.

o Develop a five year Stewardship Funding PlanStewardship Funding PlanStewardship Funding PlanStewardship Funding Plan to fund the stewardship endowment fund for two

existing conservation easement properties and others in process.

o Board decision on how to address legal defense, if a separate fund is desirable, develop a Legal Legal Legal Legal

Defense Fund Policy. Defense Fund Policy. Defense Fund Policy. Defense Fund Policy.

o Support and encourage initiatives aimed at a communal approach to legal defense.

o Review and update the stewardship calculator annually to ensure it accurately reflects costs

associated stewardship.


REFERENCES REFERENCES REFERENCES REFERENCES

Aldrich, R. and J. Wyerman. 2005. National Land Trust Census Report. Land Trust Alliance.

Bates, Sylvia. 2007. Conservation Capacity and Enforcement Capability. Land Trust Alliance.

Bertely Risk Consultants Inc. 2008. An Analysis of Historic Data Relating to Easement Violations, Land

Protection and Defense Insurance Feasibility. Land Trust Alliance.

Canadian Land Trust Alliance. 2005. Canadian Land Trust Alliance: Standards and Practices. Modified by

the Canadian Land Trust Alliance from Land Trust Standards and Practices © 2004 by the Land Trust Alliance with permission from the Land Trust Alliance.

Doren, J.V. 2004. 2004 Conservation Easement Violation & Amendment Study: Major Violation Follow-Up

Questionnaire. Land Trust Alliance.

Doscher, P., B. Lind, E. Sturgis and C. West. 2007. Determining Stewardship Costs and Raising and

managing Dedicated Funds. The Land Trust Alliance.

Heidenreisch, B. Draft 2009. A Stewardship, Monitoring and Costing Guide for Natural Heritage

Conservation Agreements. Ontario Heritage Trust and Ontario Land Trust Alliance.

Michalsky, S. 2010. Dedicated Stewardship Funding Training Module 3. Alberta Land Trust Alliance.

Rately- Beach L. 2009. Managing Conservation Easements in Perpetuity: Fulfilling the Promise of

Permanence through Keeping Records, Managing Amendments and Upholding Conservation Easement

Integrity. Land Trust Alliance.

Watkins, M.J. 2007. The Management of Private Conservation Lands by Land Trusts in Canada. Faculty of

Graduate Studies, University of Guelph.


Appendix 1: Violation Policy and Procedure Template Example

DDDDUTCHUTCHUTCHUTCHESS ESS ESS ESS LLLLAND AND AND AND CCCCONSERVANCYONSERVANCYONSERVANCYONSERVANCY,,,, IIIINCNCNCNC.... CCCCONSERVATION ONSERVATION ONSERVATION ONSERVATION EEEEASEMENT ASEMENT ASEMENT ASEMENT VVVVIOLATION IOLATION IOLATION IOLATION RRRRESPONSE ESPONSE ESPONSE ESPONSE PPPPROCEDUREROCEDUREROCEDUREROCEDURE....

Easement EnforcementEasement EnforcementEasement EnforcementEasement Enforcement

The long-term effectiveness of conservation easements in protecting valuable lands depends on the

Conservancy’s ability to enforce the terms of the easements. Strong enforcement builds public confidence in

easements as a land protection tool. By swiftly responding to violations, whether actual or potential, the

Conservancy will preserve the legal right to enforce the easements it holds. In order to accept tax-deductible gifts

and qualify for tax-exempt status, IRS regulations require that easement-accepting organizations commit to

upholding the terms of an easement and maintaining the financial capability to enforce the restrictions. (See

Treas. Reg. 1.170A-14(c)(1).) The Conservancy realizes that each easement violation represents a unique situation

and requires a tailored approach. The following are guidelines to be used to help assure that appropriate steps are

taken to document and notify the property owner about the violation, a well as consult with legal experts.

II. Overall Guidelines for Violation Response and Enforcement:II. Overall Guidelines for Violation Response and Enforcement:II. Overall Guidelines for Violation Response and Enforcement:II. Overall Guidelines for Violation Response and Enforcement:

1. Maintain the conservation purpose of the Conservation Easement.

2. Maintain the Conservancy’s image both in its ability to achieve its mission overall and in its ability to

enforce specific Conservation Easements.

3. Protect the Conservancy’s legal rights and economic value in the Conservation Easement.

4. Maintain the most constructive working relationship possible with the land owner.

5. No one person should make decisions on violation response – get counsel first. Never give a land

owner an on-the-spot opinion about whether or not a violation exists.

6. Maintain professionalism and integrity.

7. Be flexible as the situation warrants. Balance the harm caused by the violation with the cost/benefit of

the selected enforcement response.

8. Use litigation as a last resort and when there is a good chance of success.

9. Maintain consistent responses to similar Conservation Easement violations.

III. ViolatioIII. ViolatioIII. ViolatioIII. Violation Prevention Strategiesn Prevention Strategiesn Prevention Strategiesn Prevention Strategies

1. Maintain good land owner relations. Make a point of getting the land owner involved with the

Conservancy.

2. Provide informal services to the land owner – advice on enhancing wildlife habitat, good forestry

practices, etc. Send them newsletters, outing information, and event brochures, etc.

3. Provide an easement summary to land owners every three years as a reminder.

4. Staff to conduct annual monitoring. Send the land owner annual notification and monitoring follow-up

letters and, if applicable, a written monitoring report.

5. Ensure that we are informed when properties change hands. Make sure local realtors know about

Conservation Easement properties. Check real estate transactions town by town on a monthly basis.

Remind land owners to check the Conservation Easement before altering the property in any way. Ask

land owners to notify the Conservancy if they are planning to sell their land.

6. Provide a “new owner introductory package” to ensure that new owners understand the

Conservancy’s mission, the Conservation Easement for their property, and the concept and purpose of

Conservation Easements in general.

7. Maintain good relations with the local officials. Make sure that local building officials, town planning

boards and conservation commissions are aware of properties with Conservation Easements.

8. Work to ensure tighter drafting of Conservation Easements.


IV. Steps to Take in the Event of a Violation:IV. Steps to Take in the Event of a Violation:IV. Steps to Take in the Event of a Violation:IV. Steps to Take in the Event of a Violation:

Violations may be discovered in any number of ways: through annual monitoring inspection, as reported by

neighbors, easement donors, new property owners, passersby, or Board or Advisory Committee members.

If an easement violation is suspected, the President and/or stewardship staff should:

1. Review the Easement Terms. 1. Review the Easement Terms. 1. Review the Easement Terms. 1. Review the Easement Terms. Review the easement document, baseline inventory, and monitoring

reports to determine the exact nature of the suspected violation and when it took place. The President

should carefully review the easement history to determine the original intent of the donor and the

Conservancy, and refer to the Board minutes when the easement was approved. The President should

also request an interpretation of the easement by legal counsel.

2. Document the Suspected Violation. 2. Document the Suspected Violation. 2. Document the Suspected Violation. 2. Document the Suspected Violation. Visit the site to inspect and document the suspected violation. The

violation must be described in detail including material impact, location and extent. Photos keyed to a

photo map should be taken, signed and dated by the photographer. Quantitative measurements of the

violation should be noted as appropriate, e.g. area of impact, number of trees damaged. Field notes should

be signed and dated by the person conducting the inspection.

3. Contact the 3. Contact the 3. Contact the 3. Contact the Land ownerLand ownerLand ownerLand owner. . . . Meet with the land owner in person if possible to discuss the suspected

violation. Violations can be caused unintentionally. Listen to the land owner, ask questions, take notes, and

ask them to CEse any further work until the matter can be reviewed by the Conservancy’s Board Chairman

and the Executive Committee. Document all meetings and write a follow-up letter (send certified – return

receipt requested) to the land owner confirming any on site discussion.

4444 Hold a Meeting with the Board Chairman/Executive Committee. Hold a Meeting with the Board Chairman/Executive Committee. Hold a Meeting with the Board Chairman/Executive Committee. Hold a Meeting with the Board Chairman/Executive Committee. Review the suspected violation,

easement interpretation and discussion with the land owner with the Board Chairman/Executive

Committee.

a) a) a) a) The President, Board Chairman and the Executive Committee shall review the easement, the

Conservancy’s legal counsel’s interpretation of the easement, Board minutes when the easement

was approved, baseline documentation and all other relevant information to decide whether there

is in fact a violation under the terms of the easement. If the decision is no, it is not a violation, the

process ends and a letter is sent to the land owner.

b) b) b) b) If a clear violation of the Conservation Easement exists or if the Executive Committee

determines under 4a) that a violation does exist, the Executive Committee then determines

whether or not it is a minor or major violation. This determination is used to gauge the

expectations for remediation and compensation. If it is major, and may require court action, then

the Conservancy’s full Board of Directors will be consulted about the appropriate action.

5. Work with the 5. Work with the 5. Work with the 5. Work with the Land ownerLand ownerLand ownerLand owner to Correct the Violation. to Correct the Violation. to Correct the Violation. to Correct the Violation. After the Executive Committee’s decision, the

President calls the land owner concerning the Executive Committee’s decision and sends a follow-up

letter (sent certified - return receipt requested) which specifies the Conservation Easement violation,

references appropriate passages from the Conservation Easement document, and the Executive

Committee’s decision.

a) Ask the a) Ask the a) Ask the a) Ask the land ownerland ownerland ownerland owner to voluntarily correct the violation. to voluntarily correct the violation. to voluntarily correct the violation. to voluntarily correct the violation. If the Land owner voluntarily agrees to

restore the Property, re-inspect the site on the deadline date. Carefully document the restoration

work with photographs, narrative description, and quantitative measurements. Send the land

owner a follow-up letter (send certified – return receipt requested).


b) If the b) If the b) If the b) If the Land ownerLand ownerLand ownerLand owner does not agree to voluntarily restore the Property, does not agree to voluntarily restore the Property, does not agree to voluntarily restore the Property, does not agree to voluntarily restore the Property, the President then

consults with the Chairman of the Board and the Executive Committee to further discuss the

violation and come to a final decision regarding its enforcement.

c) If the c) If the c) If the c) If the land ownerland ownerland ownerland owner does not agree that there is a violation does not agree that there is a violation does not agree that there is a violation does not agree that there is a violation or does not agree on the solution to a

violation, the President and Board Chairman consult the Conservancy’s legal counsel.

i) If it is a major violation and the Conservancy has exhausted all attempts at negotiation,

the Board Chairman will seek Board approval to take the violation to court.

ii) If it is a minor violation, and after exhausting attempts at negotiation for removal and full

restoration, the Conservancy may consider temporary approval (limited term) or less than

full restoration.

d) For either a major or a minod) For either a major or a minod) For either a major or a minod) For either a major or a minor violation, the Conservancy may consider the use of an amendment r violation, the Conservancy may consider the use of an amendment r violation, the Conservancy may consider the use of an amendment r violation, the Conservancy may consider the use of an amendment

or a waiver or a waiver or a waiver or a waiver (similar to amendment but not signed by land owner) to resolve the violation. However,

there are number of considerations that the Conservancy must weigh before pursuing this route

(refer to DLC’s Conservation Easement Amendment Policy):

i) Consider the precedent set of condoning a violation with an easement amendment.

Consider encouraging easement land owners to ask for a review of a proposed change to

the easement protected property whether or not it’s allowed under the terms of an

easement in order to hold off a potential violation.

ii) There has to be increased resource protection in exchange for any adverse impact of

the amendment. If the monetary value of the Conservation Easement is increased or

decreased by the amendment, an addition of other restrictions should be negotiated so

that the easement value remains the same or is increased (requires an appraisal).

Amendments should be either conservation neutral or improve the conservation value.

iii) Consider whether or not the amendment would be controversial or incite negative

public reaction in the community.

iv) Consider the time and expense for the approval process (Board approval, appraisal,

and any secured lender that must subordinate its interests to an easement amendment).

Note: If an amendment is pursued, Board approval is required before informing the land owner. Document and update baseline data immediately. The Conservancy should refer to its amendment policy for guidance. The Executive Committee may develop alternative suggestions for remediation and/or compensation by the land owner and should present

them to the Board. At this time, the Executive Committee may identify specific legal

counsel to provide consultant legal services.

6.6.6.6. Going to CourtGoing to CourtGoing to CourtGoing to Court Taking a violator to court should be considered as a last resort. Going to court is

expensive and time consumptive and will likely irreparably damage the relationship between the

property owner and the Conservancy. Court decisions can set precedent that will affect easements

either favorably or unfavorably. In certain cases the Conservancy will have to go to court in order to

defend an easement, stop damaging activities, or obtain reparations. In such cases, the Conservancy


should consult with an experienced trial lawyer to assess the merits of the case, the documentation of

the alleged violation and the likelihood that the court will interpret the activity as a violation of the

easement. The Conservancy must also be sure to maintain adequate enforcement funds to cover legal

expenses.


Appendix 2: Amendment Policy Example

GGGGALLATIN ALLATIN ALLATIN ALLATIN VVVVALLEY ALLEY ALLEY ALLEY LLLLAND AND AND AND TTTTRUSTRUSTRUSTRUST:::: CCCCONSERVATION ONSERVATION ONSERVATION ONSERVATION EEEEASEMENT ASEMENT ASEMENT ASEMENT AAAAMENDMENT MENDMENT MENDMENT MENDMENT PPPPOLICY OLICY OLICY OLICY

I. General Policy Statement I. General Policy Statement I. General Policy Statement I. General Policy Statement

A. The Gallatin Valley Land Trust (GVLT) acquires and holds conservation easements on property in order to

protect, in perpetuity, the conservation values on the land, including scenic, agricultural, and/or wildlife

resources of the property and surrounding areas, for the benefit of present and future generations. GVLT is

committed to ensuring the perpetuity of the conservation easements it holds, and shall not seek

termination of any conservation easement in response to a request for an amendment.

B. Because GVLT's acquisitions are primarily achieved through voluntary agreements with land owners, the success of the conservation easement program depends upon the confidence of these land owners that

GVLT will meet its obligation to monitor and enforce the agreements. This confidence would be seriously

eroded if GVLT were to allow indiscriminate and unwarranted modification of its conservation easements.

C. Furthermore, amendments to conservation easements can raise serious problems with the Internal Revenue Service. GVLT's tax-exempt status as an organization may be jeopardized if easements are

amended gratuitously. An easement donor who has claimed a charitable deduction for a gift of an

easement may lose that deduction if the easement is amended. Any amendment which results in a benefit

to a land owner or any other private party may create “private inurement" or "private benefit," if the

benefits conferred by the amendment are more than incidental. The U.S. Tax Code prohibits GVLT from

engaging in any actions that create private inurement or private benefit.

D. For these reasons and others, it is the policy of GVLT to hold and enforce its conservation easements as

written. Amendments to conservation easements will be authorized only in limited situations and only in

the types of conditions outlined below. No amendments to conservation easements will be granted which

could jeopardize GVLT’s tax-exempt status, or which could cause the easement to fall out of compliance

with applicable federal, state or local laws, regulations or ordinances.

E. GVLT's policy is that the requester of the amendment shall pay all costs, including staff time and

consulting fees for reviewing the request, whether or not the amendment is granted, and of implementing

the amendment if approved. GVLT may require that the party requesting the amendment cover the cost of

a qualified appraisal of the value of the requested amendment, in order to assess whether the amendment

will result in any private inurnment or will confer any private benefit, if the amendment request is

approved. At GVLT's sole discretion, GVLT may waive the foregoing requirement that the requester of the

amendment pay all or some of the costs of amendment review, approval, appraisal, or implementation.

II. Conditions Under Which Amendment Requests May Be Considered II. Conditions Under Which Amendment Requests May Be Considered II. Conditions Under Which Amendment Requests May Be Considered II. Conditions Under Which Amendment Requests May Be Considered

GVLT will consider amendments to its conservation easements only under the following circumstances:

A. Prior AgreementPrior AgreementPrior AgreementPrior Agreement. In a few cases, a conservation easement may have a specific provision allowing

modification of the easement at a future date under specified circumstances. Such agreements must be

set forth in the conservation easement document or in a separate written document signed by GVLT and

the conservation easement grantor at the time the document was executed. The amendment must be

consistent with the terms and conservation intent of the original agreement.


B. Correction of an Error or Ambiguity. Correction of an Error or Ambiguity. Correction of an Error or Ambiguity. Correction of an Error or Ambiguity. GVLT may authorize an amendment to correct an error or oversight

made at the time the conservation easement was executed. Such errors or oversights may include, but

shall not be limited to, correction of a legal descriptions, inclusion of standard language that was

unintentionally omitted, or clarification of ambiguities. Any amendment authorized to clarify conservation

easement ambiguities shall be supported by written statements, affidavits, agreements between GVLT and

the conservation easement grantor, or other tangible evidence that the intention of the amendment is to

clarify and implement the parties' original intentions when GVLT first acquired the conservation easement

from the grantor.

C. Settlement of Condemnation Proceedings. Settlement of Condemnation Proceedings. Settlement of Condemnation Proceedings. Settlement of Condemnation Proceedings. Conservation easements GVLT holds in land are subject to

condemnation for public purposes, such as highways and schools. Where it appears that the

government's condemnation power will be properly exercised to terminate a GVLT conservation

easement, GVLT may enter into a settlement agreement with the condemning authority and land owner in

order to avoid the expense of litigation. In reaching such an agreement, GVLT shall attempt to preserve the

intent of the original conservation agreement to the greatest extent possible.

D. Amendments Consistent with Conservation Purpose and Enhancing Conservation Values. Amendments Consistent with Conservation Purpose and Enhancing Conservation Values. Amendments Consistent with Conservation Purpose and Enhancing Conservation Values. Amendments Consistent with Conservation Purpose and Enhancing Conservation Values. GVLT may

authorize amendments to a conservation easement provided that the amendment is determined to be

consistent with the original intent of GVLT and the donor, consistent with the statement of purpose in the

easement, and provided that the amendment enhances, or has no adverse effect on the Conservation

Values protected by the easement. No amendment will be granted under any circumstances if GVLT

determines, in its sole discretion, that the amendment would affect the conservation easement's perpetual

duration, would afford less protection to the Conservation Values protected by the original conservation

easement, or would result in private inurnment or private benefit to any party. Nothing in this policy

statement shall be interpreted to require GVLT to grant a conservation easement amendment request,

even if all of the foregoing criteria are met. GVLT shall have unlimited discretion to grant or to deny each

amendment request and shall evaluate each request on a case-by-case basis.

III. Amendment Procedures III. Amendment Procedures III. Amendment Procedures III. Amendment Procedures

Any land owner or other party seeking an amendment to an existing conservation easement must present to GVLT

a request in writing, stating what change is being sought and the specific reasons why it may be needed or

warranted. The request shall be accompanied by appropriate maps and other documentation.

A. Upon receipt of a request, GVLT will hold an initial consultation meeting with the land owner or other

person who requests the amendment. During this initial consultation meeting, costs to review and process

the request and payment arrangements will be discussed and agreed upon. A cost agreement will be

developed and signed before proceeding. GVLT staff shall review all requests and, where appropriate, a

representative of GVLT may conduct a site visit(s).

B. Evaluation of requests shall include consultation with the third parties, when applicable and appropriate, including:

• Reasonable efforts to discuss the proposed amendment with the principal parties to the original

transaction, including the land owner who granted the restrictions or his/her heirs or successors.

• Funders, if any, of the original easement. GVLT shall comply with all applicable funding

requirements.


• Additional third parties, public or private, whose opinions or expertise GVLT determines may be

helpful to its evaluation of the amendment request.

However, in all cases except funding requirements, GVLT shall have no obligation to confer with third

parties, and, if it does, any third party opinions about the propriety of granting or denying an amendment

request shall be advisory only. GVLT retains exclusive authority to grant or deny amendment requests,

within the constraints of funding requirements.

C. GVLT staff will compile information and review the request for amendment, and make a recommendation

to the Lands Committee. If the Committee finds that the amendment is legally permissible, consistent with

the terms of this policy, and clearly warranted by the circumstances, the Committee will forward the

request and the Committee's recommendation to the Board at its next regularly scheduled meeting. A

decision by the Committee to disapprove the amendment will be final, unless the land owner presents a

written request for review by the Board, with his/her reasons for requesting Board review.

D. The Board may approve, reject, or approve with modifications the request; approval shall require a 2/3

majority vote of the full Board. FAll easement amendments that are approved by the Board must be made

in writing, signed by both parties, and must be recorded in the land title records of the local jurisdiction in

which the affected property is located. The appropriate planning board will be notified of any conservation

easement amendments within that planning board's jurisdiction.

Approved by GVLT Board of Directors November 9th 1999, revised, updated and approved June 23, 2008

FLT Stewardship and Legal Defense

22

Appendix 3: FLT Stewardship Calculator Manual

SSSSTEWARDSHIP TEWARDSHIP TEWARDSHIP TEWARDSHIP CCCCALCULATOR FOR ALCULATOR FOR ALCULATOR FOR ALCULATOR FOR CCCCONSERVATION ONSERVATION ONSERVATION ONSERVATION EEEEASEMENTSASEMENTSASEMENTSASEMENTS MMMMANUAL ANUAL ANUAL ANUAL

IIIINTRODUCTIONNTRODUCTIONNTRODUCTIONNTRODUCTION

A wide variety of stewardship costs are associated with holding a conservation easement. A land

trust needs to be aware of the costs associated with stewardship and ensure they have policies

and plans developed to account for how they will acquire, save and allocate stewardship dollars

to protect CE lands in perpetuity. This stewardship calculator was developed to assist Foothills

Land Trust, and can be used or adapted by other small land trusts, in estimating the annual costs

of stewardship. This calculator currently supports cost tracking for 15 CE properties. Once a land

trust has more than 15 properties they will likely need to change the way costs are tracked, such

as by setting annual stewardship costs based on small, medium and large properties. Or if the land

trust would like to continue tracking costs on a case by case basis, a stewardship calculator

could be developed using Microsoft Access.

Stewardship Costs are composed of three components:


5. maintaining ongoing landowner relationships, and


The calculator does not currently have a line item for legal defense, but it could be added in per

property it the land trust. The calculator was developed in excel and is composed of three main

tabs, unit costs, CE Properties (labeled 1-15) and Total Annual Costs. The Land Trust enters

information into the green cells on the spreadsheet.

UUUUNIT NIT NIT NIT CCCCOSTS OSTS OSTS OSTS TTTTABABABAB

The unit costs tab enables a land trust to enter in the personnel involved in stewardship activities,

cost per hour of personnel and if the position is volunteer or paid staff. Personnel involved in

stewardship may include staff, volunteers, board members, consultants, legal council or

partnering organizations. The cost per unit tab enables the land trust to track the number of

volunteer hours and dollars saved through volunteer contribution to the land trust. Tracking the

hours a volunteer contributes may be important for grant writing and/or for understanding the long

term costs associated with stewardship should the land trust evolve toward hiring staff to take

over volunteer activities. A land trust can add personnel and change costs per hour as they see

appropriate.


23

Unit Cost Tab

PersonnelPersonnelPersonnelPersonnel Cost/hrCost/hrCost/hrCost/hr

Volunteer / Volunteer / Volunteer / Volunteer /

PaidPaidPaidPaid

None $0.00

Staff Member $50.00 P

Partner Organization $50.00 V

Legal Counsel (P) $120.00 P

Legal Counsel (V) $120.00 V

Board Member $50.00 V

Volunteer $50.00 V

Consultant $90.00 P

CECECECE PPPPRRRROPERTY OPERTY OPERTY OPERTY TTTTABABABAB

There are currently 15 tabs where individual CE properties can be entered, enabling a land trust to

track stewardship costs relating directly to the individual property. Costs associated with

stewardship that could be applied across more than one CE, are included in the total annual costs

tab. The table is divided into five categories:

1. Monitoring

2. Landowner Relations

3. Administration Costs

4. Enforcement of violations and amendments to CE

5. Annual Expenses

At the top of the excel spreadsheet on Tab 1, enter the name of the conservation easement

(currently labeled as “????? Conservation Easement”). The following fields occur in the CE

Property Tab, information is entered into green fields.

• Activities/hours Activities/hours Activities/hours Activities/hours field field field field (to be filled in by land trust)

A user can enter in the number of hours associated with the first four categories and there

listed activities. Activities can be added in as appropriate to the CE, for example, under

landowner relations, a user may add in a list of permissions in the CE that may take time for

the land trust to monitor, grant permission or clarify with a landowner.

• Primary rPrimary rPrimary rPrimary responsibility field esponsibility field esponsibility field esponsibility field (to be filled in by land trust)

Once the activities are listed for each category and the hour filled in, the user determines who

is responsible for the activity by selected the appropriate person from a drop down list under

the primary responsibility field. The drop down list is tied into the cost per unit; if the user

wants to add a new personnel position they must enter the position on the cost per unit tab.

• Unit Cost and volunteer/Paid FieldsUnit Cost and volunteer/Paid FieldsUnit Cost and volunteer/Paid FieldsUnit Cost and volunteer/Paid Fields (generated by spreadsheet)

The unit cost and if the role is undertaken by a volunteer or paid personnel is generated by the

spreadsheet, based on the information filled in on the unit costs tab. This information can be

changed on the Unit Costs Tab.

• Frequency in Years Field Frequency in Years Field Frequency in Years Field Frequency in Years Field (to be filled in by land trust)


24

Stewardship activities do not always occur annually, such as enforcement of violations or

amendment of a CE. The calculator therefore enables a user to enter the frequency in years of

the identified activity occurring (default 1 year). This is important when calculating the annual

stewardship costs as the costs are multiplied by the frequency of occurrence.

• Expenses Expenses Expenses Expenses (generated by spreadsheet)

The costs associated with each activity are generated by excel based on the number of hours,

the cost per hour of specified personal and frequency of the activity. Annual Expenses for

each property can be filled out as a cash value and frequency of expense can also be added.

The spreadsheet calculates the total annual in-kind contribution from volunteers, the total

needed for paid personal and total expenses for each property.


25

????? Conservation Easement

Annual Stewardship Costs Template

Time (Hrs)

Primary

Responsibility

Unit Cost

Volunteer/

Paid

Frequency

(yrs)*

Costs

Monitoring of Conservation Easement

Staff time

Pre-monitoring Prep

None

-$

01

-$

Travel time to site

None

-$

01

-$

Site Visit

None

-$

01

-$

Post monitoring write up

None

-$

01

-$

FLT Staff Review

None

-$

01

-$

Monitoring follow-up

None

-$

01

-$

Subtotal

0-

$

Landowner Relations

Communication with Landowner

**Permissions activity for landowner

None

-$

01

-$

None

-$

01

-$

None

-$

01

-$

Information transfer

0None

-$

01

-$

Subtotal

0-

$

Administrative costs

Records management (posting to website)

None

-$

01

-$

Communication with board members

None

-$

01

-$

Co-ordinating volunteers

None

-$

01

-$

None

-$

01

-$

None

-$

01

-$

Subtotal

0-

$

Minor Infringments/Ammendments to CE

Mis-interpretation of easement restrictions, compliance

None

-$

05

-$

Violations

None

-$

05

-$

Ammendments to CE

None

-$

010

-$

Legal Costs associated w ammendment, CE Clarifications

None

-$

05

-$

None

-$

01

-$

None

-$

01

-$

Subtotal

0-

$

Annual Expenses

Expense ($)

Insurance

1-

$

Mileage assocaited with site visit (0.45)

1-

$

Air photo's

3-

$

Printing costs

1-

$

Postage costs

1-

$

Subtotal

-$

Total in-kind / volunteer

-$

Total paid personnel

-$

Total expenses

-$

Total Cost Required

-$


TTTTOTAL OTAL OTAL OTAL AAAANNUAL NNUAL NNUAL NNUAL CCCCOSTS OSTS OSTS OSTS TTTTABABABAB

In the total annual stewardship tab costs are rolled-up for all properties and costs associated with stewardship

tasks that apply to all CE properties are tracked. The costs associated with each property, including in-kind

volunteer, paid personnel and expenses are rolled up into the total annual cost tab.

Costs that are associated with stewardship for all properties include Landowner Outreach Activities and expenses

relating to landowner outreach activities, administration and monitoring.

Landowner outreach activity Landowner outreach activity Landowner outreach activity Landowner outreach activity

The calculator enables a land trust to identity and cost outreach activities, such as workshops, newsletters or

actual habitat management projects with landowners. The user enters in number of hours required by the land

trust to undertake these activities, primary responsibility and frequency of the activity (in years). The fields are the

same as the CE Property.

Expenses Expenses Expenses Expenses

A land trust is able to include administrative costs, such as office space, computer costs and general overhead

into its stewardship budget. In addition expenses associated with outreach activities and monitoring equipment

can be included in the stewardship calculator.

The calculator provides a land trust with the total paid personnel, total in-kind volunteer value, and total expenses

and enables a land trust to add in a contingency budget (recommended at 5%). In addition the total annual

stewardship funds required be the land trust to steward the land are identified and the total annual in-kind

contribution.

Summary Summary Summary Summary

The stewardship calculator was designed to assist small land trusts in tracking costs associated with annual

stewardship costs. Once a land trust understands the costs associated with stewardship it can develop a plan for

acquiring the funds to ensure they are able to steward the land in perpetuity. For a description of fund raising

options please refer back to Stewardship, Enforcement and Legal Defense Costs, Policies and Procedures –

General Recommendations on the Foothills Land Trust website (also in Module 3: Dedicated Stewardship Funding

Training Module of the Alberta Land Trust Alliance series).

It is highly advisable that a land trust review the stewardship calculator at least once a year to access the

accuracy in hours, primary responsibility and frequency of occurrence.


Total Annual Costs

Time

(Hrs)

Primary

ResponsibilityUnit Cost

Volunteer/

Paid

Frequency

(Yrs)Annual Costs

Conservation Easement Stewardship Costs1 ????? Conservation Easement 0 -$

In-kind / volunteer 0 -$

Paid personnel -$

Expenses -$

2 ????? Conservation Easement 0 -$

In-kind / volunteer -$

Paid personnel -$

Expenses 0 -$



Paid personnel -$

Expenses 0 -$



Paid personnel -$

Expenses 0 -$

Subtotal -$

Landowner Outreach Activity

Stewardhip activity (Habitat management) 0 None -$ 0 1 -$

Newsletter 0 None -$ 0 1 -$ Workshop 0 None -$ 0 1 -$ Subtotal -$

General Stewardship Expenses Expenses ($)

Administration

FLT Overhead Costs $ - 1

Office Space $ - 1 $ - 1

$ - 1

Landowner Relations

Workshop expenses -$ 1

Stewardship activity expenses -$ 1 $ - 1 $ - 1

Monitoring

Camera -$ 1

GPS unit -$ 1Computer -$ 1Subtotal -$

TotalsTotal Paid Personnel Cost -$

Total In-kind/Volunteer Value -$

Total Expenses -$

Contingency Budget (5% total annual costs) -$

Total Annual $ Stewardship Fund -$

Total Cost (including in-kind) -$

Prepared by Miistakis Institute for Foothills Land Trust

With support from Alberta Real Estate Foundation and The Calgary Foundation


Appendix 4 Stewardship Funding

Fundraising ideas were extracted from the Alberta Land Trust Alliance, Dedicated Stewardship Funding Training

Module by Paskaw Consulting and The Ontario Heritage Trust.

The following funding sources are those most commonly tapped by land trusts:

Land ownerLand ownerLand ownerLand owner Contributions: Contributions: Contributions: Contributions: Many land trusts ask their easement and property donors to consider making a

contribution to the stewardship fund, either as a one-time gift or as a contribution made over time.

Income from the Property: Income from the Property: Income from the Property: Income from the Property: Income can be generated from fee simple properties which may offset some of the

many expenses. For example, the property could be leased for agricultural, forestry or recreational use. The

income from leases should, at a minimum, be designed to cover the costs of administering the lease and ideally to

generate income to cover other stewardship costs. Rarely will leases cover all of a property’s stewardship costs.

Costs for administrating leases should be rolled into staff time budgets, legal expense budgets and perhaps

administrative overhead.

Local Fundraising: Local Fundraising: Local Fundraising: Local Fundraising: Land trusts can seek stewardship funds from neighbors, municipalities and other project

partners. Some create fundraising drives or events. When land or conservation easements are purchased, land

trusts commonly mount a campaign to raise acquisition funds, rolling transaction costs and the stewardship

contribution into overall fundraising goals.

Major Donors: Major Donors: Major Donors: Major Donors: Land trusts may cultivate major donors by educating them about the importance of stewardship and

the challenges of raising stewardship funds.

Grant Support: Grant Support: Grant Support: Grant Support: Certain public and private grant programs support land stewardship funds. For purchased land or

conservation easements, grants may be an excellent source for stewardship funds when the stewardship fund

contribution is presented as part of overall project costs.

Transfers from the Organizational Operating Budget: Transfers from the Organizational Operating Budget: Transfers from the Organizational Operating Budget: Transfers from the Organizational Operating Budget: Some land trusts have built their easement stewardship

funds using occasional and/or routine transfers from the operating budget. For example, some organizations have

started their dedicated stewardship funds with a significant transfer of funds from the operating budget or from

surplus funds. Others make an annual contribution based on a percentage of the operating budget so that all the

land trust’s members and financial supporters share in long-term stewardship.

Planned Giving: Planned Giving: Planned Giving: Planned Giving: Land trusts may seek planned gifts from major donors for the dedicated stewardship fund. Such

gifts can include bequests of land and money, gifts of cash and securities, and non cash gifts that can be

liquidated. This technique has been used successfully by land trusts that are “catching up” their stewardship

endowment.

Conservation Buyer Programs: Conservation Buyer Programs: Conservation Buyer Programs: Conservation Buyer Programs: Donated lands protected by a conservation easement and sold to a conservation

friendly purchaser is another way to raise funds for a dedicated stewardship fund.

Profit Making Business ArmProfit Making Business ArmProfit Making Business ArmProfit Making Business Arm: : : : Some land trusts develop an affiliated subsidiary or organization that undertakes

profitable ventures relating to the work of the land trust and donates or grants the profits from that business back

into the land trust. The Land Conservancy of BC is an example of a land trust that undertakes fundraising through a


business arm. TLC operates gift shops, mail and web order catalogues, tea rooms, heritage facility rentals, holiday

cottage rentals, boat cruises and holiday programs.

Transfer Fee: Transfer Fee: Transfer Fee: Transfer Fee: A “transfer fee” clause (sometimes called a “stewardship fee” or “private transfer fee” clause) is a

method that land trusts may use to generate revenue to offset the costs of administering conservation easement

agreements (CE). A transfer fee is a voluntary arrangement included as a provision in the CE as agreed to by a CE

donor and CE recipient that directs a small percentage of the gross sale price of lands protected by the CE to the

CE holder by the vendor (or the buyer if so negotiated by the vendor) when the parcel is sold or transferred in an

arms length transaction. Transfer fee language generally exempts all real estate transfers where there is no

financial consideration, such as gifts to not-for-profits, among family members or for inheritance, or in cases of

foreclosure. (Extract from OLTA description).

For non-governmental, individual private donors, the fee has been in the range of one to two percent of the sale

price. The clause has been used by several non-governmental conservation bodies in Ontario including Evergreen

and the Kawartha Heritage Conservancy.

The Ontario Land Trust Alliance (OLTA) has adopted the following clause 6.3 in its 2008 annotated natural heritage

Conservation Easement template:

No less than ten (10) days in advance of a transfer of the fee simple title to or a

possessory interest in the whole or any part of the Property, the Owner shall pay to the

[Easement Holder] two (2) percent of the sale price or make alternative arrangements for

such payment to the satisfaction of the [Easement Holder]. A lease of up to five (5) years

total duration and all transfers by bequest, by right of survivorship or for now or nominal

consideration up to a value of fifty (50) dollars are exempt from this provision. Any failure

to make such payment shall be a debt with interest at the rate of five (5) percentage points

above the prime rate of interest from time to time charged by the Bank of Canada and

shall be a charge on the whole Lands enforceable in the same manner as a mortgage, and

shall be recoverable by the [Easement Holder] in a court of law. (Source: OLTA. Annotated Sample Conservation Agreement. October 2008. p.12)

Canada Helps: Canada Helps: Canada Helps: Canada Helps: A non-profit organization set-up to assist charities in taking donations on-line. There are multiple

ways a donor can contribute through Canada Helps, by making a one-time donation, setting up monthly donations,

starting a fundraising campaign or processing donations of securities (stocks and mutual funds). Canada Helps

can be used as a mechanism for accepting donations such as planned giving, where the donor contributes

monthly to a stewardship fund or for promoting a fundraising campaign by setting up fund designation category

through the Canada Helps website.

Drafting easements to match organizational capacity: Drafting easements to match organizational capacity: Drafting easements to match organizational capacity: Drafting easements to match organizational capacity: Land trust recognizes certain restrictions or affirmative

obligations within a CE are difficult to monitor and interpret. There maybe other ways to achieve the desired state

without time intensive monitoring of a CE restriction. In addition challenging obligations that are difficult to

interpret may increase the risk of a land trust to a legal challenge.


Appendix 5: Stewardship and Legal Defense Fund Policy Example

CCCCONSERVATION ONSERVATION ONSERVATION ONSERVATION TTTTRUST FOR RUST FOR RUST FOR RUST FOR NNNNORTH ORTH ORTH ORTH CCCCAROLINAAROLINAAROLINAAROLINA:::: CCCCONSERVATION ONSERVATION ONSERVATION ONSERVATION EEEEASEMENT ASEMENT ASEMENT ASEMENT SSSSTEWARDSHIP AND TEWARDSHIP AND TEWARDSHIP AND TEWARDSHIP AND MMMMONITORING ONITORING ONITORING ONITORING LLLLEGAEGAEGAEGAL L L L

DDDDEFENSE EFENSE EFENSE EFENSE FFFFUND FOR UND FOR UND FOR UND FOR CCCCONSERVATION ONSERVATION ONSERVATION ONSERVATION PPPPROPERTIESROPERTIESROPERTIESROPERTIES....

A. PURPOSE OF THE FUNDSA. PURPOSE OF THE FUNDSA. PURPOSE OF THE FUNDSA. PURPOSE OF THE FUNDS

The donation or sale of a conservation easement is a major commitment for any land owner. Although tax benefits

may result from gift of an easement, the primary reward for granting an easement is the knowledge that a

cherished property will be protected forever.

In accepting a conservation easement, the Conservation Trust for North Carolina (CTNC) is also making a serious

commitment. The Conservation Trust assumes the legal responsibility to carry out the donor’s intentions by

upholding the terms of the conservation easement in perpetuity. The sale, bargain sale or gift of an easement to

CTNC allows the organization to further its mission of protecting lands that are essential to the character of North

Carolina, but each easement also represents a perpetual obligation for CTNC.

Although it is unusual for grantors of easements to violate the terms of those easements, the possibility that

violations will occur increases as time passes and the property changes hands. In order for CTNC to care for the

easements it holds, established protocols will be used for property baseline condition reports and regular

monitoring reports as developed adopted by staff. CTNC should monitor easements and owned properties at least

annually, and be prepared to enforce their terms. Annual monitoring involves a significant amount of staff time and

travel. If necessary, CTNC must be prepared to defend the terms of any conservation easement in court, which

could be very expensive.

The Conservation Easement Stewardship & Monitoring Fund has been established solely for the purpose of

covering the costs associated with monitoring and defending CTNC’s easements. The Conservation Easement

Legal Defense Fund has been established solely for the purpose of enforcing the terms of a conservation

easement or property rights of parcels owned by CTNC or defending the organization against litigation related to

its easements or properties. A gift to the Easement Stewardship & Monitoring and/or Legal Defense Funds is

distinct from the support necessary to prepare a conservation easement. That gift allows CTNC staff to visit each

property at least annually on the ground and/or by air to collect information about current conditions of the

protected property.

B. CALCULATING AND COLLECTING THE FUNDSB. CALCULATING AND COLLECTING THE FUNDSB. CALCULATING AND COLLECTING THE FUNDSB. CALCULATING AND COLLECTING THE FUNDS

It is the policy of CTNC to request that land owners make a tax-deductible gift of cash, securities or other assets to

the Conservation Easement Stewardship & Monitoring Endowment and Legal Defense Funds at the time their

easement is recorded. If a donation is not possible at the time of the easement, land owners are asked to consider

pledging a future contribution that may be donated over several years or as a bequest. The Board of Directors of

CTNC recognize that not all land owners are able to make such a contribution and a cash gift is not a condition of

CTNC’s acceptance of an easement. However, we do ask that each donor consider the following:

1. Costs of monitoring and enforcing conservation easements (staff time, travel costs, etc.) vary dramatically. An

estimated cost for any given property will be communicated to each easement donor. The goal, but not the

requirement is to preserve the principle and draw annual monitoring costs for all properties from the interest

accrued from this account.

2. If donors are able, they will be asked to consider a larger gift. Larger gifts will allow CTNC to build a reserve for

the monitoring and defense of all easements should violations occur in the future. Larger gifts to the Stewardship


& Monitoring and Legal Defense Funds will also allow CTNC to work with committed land owners who are not able

to make a financial gift to the Funds with their easement. The generosity of those who are able will help CTNC care

for all of its easements in a responsible manner.

3. When making a gift to the Stewardship & Monitoring and Legal Defense Funds, donors are asked to consider the

following complicating factors that may suggest a higher than average contribution: a) difficulty of access to the

property for monitoring personnel, b) large size of the parcel, c) degree of future development permitted, d)

complexity of the easements and permitted uses, e) present and future risk that the easement terms may be

violated. CTNC staff can help land owners assess which, if any, of these factors may apply to their property.

There are many ways of structuring a gift to the Stewardship & Monitoring and Legal Defense Funds. Some land

owners choose to make a one-time cash gift at the time their easement is signed; others pledge gifts over a period

of years. Gifts of appreciated assets, including stock, bonds and personal property, can also be an effective way to

contribute as the actual cost to the donor is usually far below the market value.

CTNC currently uses a stewardship calculation spreadsheet for calculating Stewardship & Monitoring and Legal

Defense Fund Contributions for the projected amount needed for any individual project.

C. USES OF THE FUNDS:C. USES OF THE FUNDS:C. USES OF THE FUNDS:C. USES OF THE FUNDS:

Annual income from the Stewardship & Monitoring and Legal Defense Funds is available for the costs of several

related activities:

1. Annual monitoring of the property under easement held by CTNC; expenses include staff travel and time,

expense reimbursement, photography, mapping, administration, associated follow-up reports and

correspondence, and maintaining up-to-date records;

2. Enforcement expenses, primarily legal fees and court costs, in the unlikely event that remedial measures or legal

action are needed to correct a misunderstanding or a willful violation;

3. Preventive measures, in addition to monitoring, such as orientation meetings with new land owners, surveys,

boundary marking, and active management required to protect the conservation values of the property;

7. Approval of special actions, which may include the review of the location of permitted structures, landscape

alterations, exercise of other rights reserved by the owner, response to requests for interpretation of easement

terms, or entertaining proposals by owners to amend easement provisions;

D. MANAGEMENT OF THE FUNDSD. MANAGEMENT OF THE FUNDSD. MANAGEMENT OF THE FUNDSD. MANAGEMENT OF THE FUNDS

1. The Conservation Easement Stewardship & Monitoring Endowment and Legal Defense Funds consist of

principle invested in insured accounts. Income received accrues to principal, unless expended for the uses

specified above.

2. Donations to the Stewardship & Monitoring Endowment and Legal Defense Funds are pooled in a single account

for administration and for investment purposes. Because funds are pooled, contributions made by a donor

primarily to safeguard a particular property may be used toward payment of monitoring and enforcement costs for

other properties that CTNC protects. All properties will be defended to the extent that CTNC’s resources allow

within the discretion of its Board of Directors. Special fundraising efforts may be undertaken as necessary to

replenish the fund following any major expenditure or to strengthen the fund.

Technology

Legal defense costs 2009 18 foothills land trust $24,420 2 of 5