home : Protecting Lands : FAQs

FAQs

What is a Conservation Agreement?

A Conservation Agreement is a legal agreement reached voluntarily between a property-owner and a conservancy that:

  • Protects water quality, wildlife habitat, scenic vistas, agricultural productivity, and/or other conservation values.
  • Permanently restricts the use of property by current and future landowners.
  • Keeps property in private hands.
  • Donating some or all of the development rights to a qualified, tax-exempt organization like the Legacy Land Conservancy, and meeting other specific conditions, allows a landowner to be eligible for certain tax benefits.

The Agreement must be recorded with the county register of deeds to be effective. The Conservancy becomes responsible for ensuring that the restrictions are upheld for the length of the agreement, usually in perpetuity.  If violations occur, the Conservancy will work to have them corrected.

The Conservancy occasionally considers the purchase of a Conservation Agreement and offers free, no-obligation assistance with local state and federal programs that purchase conservation agreements.

How does an Agreement affect property rights?

Owners of properties protected by a Conservation Agreement must abide by the agreement reached between the owner who signed it and the conservancy. All rights to the property not specifically relinquished in the Agreement are retained and may be exercised. The landowner owns the land, can live on it and can use it in any way consistent with the Agreement and can sell, give or pass on the property to anyone. The landowner is obligated to pay taxes on the property and ensure that the terms of the Agreement are not violated.

Can the property be developed?

Some Agreements permit a limited amount of development. If development is allowed, it usually applies only to a portion of the property. Agreements are flexible documents that can accommodate sensitive development as long as the property’s conservation values are not negatively affected. The Agreement can be applied to the entire property or to only a portion of it, such as the land along the bank of a stream. Each Agreement is designed specifically to address a property’s unique characteristics and the interests and needs of the landowner.

How long does the Agreement last?

Most Agreements are perpetual in order to permanently preserve the land. The Agreement must be granted in perpetuity if the landowner will be claiming a charitable deduction for federal income tax purposes.

Does the public have access?

The public does not have access to Conservation Agreement properties unless specifically authorized in the Agreement.  Granting public access in the Agreement document at the time of donation is one way to qualify for a federal income tax deduction but is usually not necessary for the landowner to obtain tax benefits.

How does the Agreement impact property taxes?

The property’s current assessment for tax purposes determines if tax benefits may be realized by protecting it with a Conservation Agreement.  If the assessment reflects the property’s development potential and those rights have been permanently relinquished, the landowner has standing to make a case to the local assessor for a reduction in property assessment. If that is granted, a property tax reduction will occur.  In addition, Conservation Agreement properties in Michigan are exempt from the reassessment and subsequent substantial increase of property tax that ordinarily occurs when a property changes hands. This is great news for conservation-minded landowners who are considering selling or passing on their land.

How does the Agreement impact estate taxes?

The donation of a Conservation Agreement—whether made during a landowner’s life, by bequest, or by the heirs while settling the estate—can reduce the value of the estate upon which taxes are calculated. In some cases, the value of an estate after an Agreement donation may fall below the lifetime exemption so that taxes are avoided. Good planning is necessary to ensure that heirs of estates that include property receive maximum tax advantages.

What is PDR?

PDR stands for the Purchase of Development Rights.  PDR works in a similar way to donated Conservation Agreements, with the key difference being the landowner is compensated for some or all of the fair market value of the development rights, and a cash payment is made in exchange for the landowner signing a deed restriction that is recorded with the county register of deeds.