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By statute and by common law interpretation, a conservation easement is a real estate interest and is governed by real estate law, in particular, the law of servitudes. This guide analyzes the nature of the conservation easement and the operation of the document granting the easement. It includes discussion of the mechanisms that assist in upholding the easement’s conservation objectives in perpetuity.
The Grant of Conservation Easement and Declaration of Covenants (called the “grant” in this guide) is the legal document used to grant the conservation easement. It conveys to the easement holder an interest in the land itself—splitting the ownership into two concurrent interests: the conservation easement and the remaining fee simple ownership interest as encumbered by the easement.
The Conservation Easement is a real property interest that may be described as the power to block land uses within a particular property that are inconsistent with the conservation purposes of the easement. The conservation purposes of the easement define the scope of the easement holder’s power and the corollary limits on the landowners’ freedom to use the property as they wish.
Covenants. The grant of conservation easement and declaration of covenants (again, the “grant”) establishes (1) the conservation easement and (2) the covenants—the covenants being the restrictions and limitations placed on what the landowners and the easement holder can do with their property interests in furtherance of the easement’s conservation purposes.
Holder Covenants. The easement holder declares (in the grant) covenants on its interest enforceable by beneficiaries of the grant. The holder covenants are safeguards to assure that the power conveyed to the holder by the grant of conservation easement will remain robust and viable in perpetuity.
Landowner Covenants. The landowners declare (in the grant) covenants on their land ownership interest to clarify the land uses that are, or are not, understood to be consistent with the easement’s conservation purposes at the time of the grant.
Pennsylvania’s Conservation and Preservation Easements Act (the “CPEA”) [i] codifies and elaborates on the nature of the property interest known as a conservation easement, defining a conservation easement as a real estate interest and squarely placing it in the subset of real estate law called the law of servitudes. Section 2 of the CPEA defines conservation easement as:
A nonpossessory interest of a holder in real property, whether appurtenant or in gross, imposing limitations or affirmative obligations, the purposes of which include, but are not limited to, retaining or protecting for the benefit of the public and economic benefit the natural, scenic or open space values of real property; assuring its availability for agricultural, forest, recreational or open-space use; protecting, conserving or managing the use of natural resources; protecting wildlife; maintaining or enhancing land, air or water quality or preserving the historical, architectural, archaeological or cultural aspects of real property.
In the early years of conservation easements, the documents establishing them were entitled “Grant of Conservation Easement and Declaration of Restrictive Covenants.” Some practitioners still follow this practice and do so for good reason: the title was, and remains, a precise and accurate description of the nature and effect of the document that grants the conservation easement.
WeConservePA adopted the practice of entitling these documents “Grant of Conservation Easement and Declaration of Covenants”—dropping the word “restrictive”—to reflect that modern documents typically contain not only restrictive covenants binding on the landowners but also other covenants binding on the easement holder.
Regardless of title used, the document (again, called the grant in this guide) operates to convey a real property interest from the landowners to the easement holder; it is thus properly categorized as an instrument of conveyance just like a deed used to transfer a house, farm, or other real property from one party to another.
Over time, many practitioners began abbreviating the title of the grant to “Grant of Conservation Easement” and, eventually, to appear even less legalistic, “Conservation Easement.”
Confusion has arisen with these abbreviated titles. Conflation is the error in logic of treating two distinct concepts as if they were one. With the use of abbreviated titles, the unwary may conflate the instrument of conveyance—the piece of paper—with the property interest conveyed by the instrument. But, just as a deed is not the fee ownership of land, the grant is not the conservation easement.[ii]
A more recent marketing innovation has been to entitle these instruments of conveyance “Conservation Agreements” to emphasize that the parties are entering a real estate transaction voluntarily.[iii] Unfortunate to this usage, the word agreement can inadvertently and falsely suggest that conservation easements are grounded in contract rather than property law.
To be clear, no matter the title of the grant, a conservation easement is not an agreement. The easement cannot be established without landowners and easement holder coming to agreement, and the granting document used to establish it contains a whole series of provisions that must be agreed to by the landowners and holder. Nevertheless, the easement itself is not an agreement; rather, it is an interest in real property.
The body of law that applies to the creation, interpretation, and enforcement of easements and covenants is the law of servitudes. A servitude is a non-possessory (not a leasehold) interest that the holder holds in a real estate interest owned by another.[iv] Both easements and covenants are servitudes and the law governing servitudes is the only appropriate body of law to apply to the creation, interpretation, and enforcement of these land-based legal relationships.
The grant is a legal instrument that performs three functions, each of which is discussed separately below.
The landowners “grant and convey”[v] to the holder an interest in the land itself, referred to as the conservation easement.
The holder burdens its easement interest in the land with covenants running with its conservation easement interest in the land (called “holder covenants” in this guide). The holder covenants are enforceable by those land trusts or governmental entities identified as beneficiaries in the grant. As discussed later in this guide, Pennsylvania law allows courts to infer other intended beneficiaries. Further, the common law doctrine of parens patriae (to protect charitable assets from misuse or misappropriation) supports the conclusion that the Commonwealth of Pennsylvania acting through the Office of the Attorney General (the “Attorney General”) is also a beneficiary.
Drafting practices vary but, in Pennsylvania, holder covenants are typically written to:
The landowners burden their remaining fee simple interest in the land with covenants running with the land (called “landowner covenants” in this guide). The landowner covenants clarify the understanding of the granting landowners and the holder as to what is, or is not, consistent with the purposes of the conservation easement. The covenants typically place limitations on subdivision, improvements, activities, uses, and disturbance of resources on the land.
The grant of an easement splits the ownership of the land into multiple interests held by different owners at the same time (called “concurrent interests”), and the law of servitudes has devised rules to sort out their priority vis-a-vis each other. The interest of the holder of an easement is paramount or dominant compared to the interest of the fee simple owner of the property. The holder of the servient estate (the landowner) is legally obligated not to interfere with the uses authorized by the easement. Another way to describe the relationship of the two land holdings is that the easement holder holds a power and the landowner is under a disability (the inability to stop the holder’s exercise of easement rights). The conservation easement, being the dominant property interest, is a powerful, highly defendable, conservation tool.
Holders of easements (including conservation easements) have a number of powerful remedies available to them in Pennsylvania. They are empowered to enter the land to remove an interference to their authorized uses if this can be accomplished without violence or threat of injury.[vi] The easement holder is also entitled to injunctive relief for the same purpose[vii] whether or not compensatory damages might suffice. These remedies are particularly important as applied to conservation easements because swift action to preserve resources may be imperative.
The legal scholars who characterized a conservation easement as a negative easement in gross for conservation purposes understood the operation of, and spoke the language of, the law of servitudes. That compact, but tightly packed, definition is deconstructed below for those who lack familiarity with the terms used in the classic definition.
The real estate interest granted to the holder is properly characterized as an easement:[viii] the holder has the right, whether or not the landowners consent, to enter the land for the purposes of the easement. Easements always include the concept of the easement holder having the right to do something, or block something, within the land of another.
Many easements, such as early versions of telephone and electric easements, are not specific to a particular location—they can float until the holder determines the location to be committed to the easement purpose. That is not true with conservation easements established pursuant to the CPEA; the boundaries of the area subjected to a conservation easement must be clearly described in the grant.[ix]
A conservation easement is properly categorized as a negative easement because the key feature of a conservation easement is the power to block activities and uses within land of another for certain purposes.[x] With that said, the grant may, and often does, include affirmative easements in support of the negative easement. These include the power to enter the land to monitor compliance and to exercise holder’s remedies to restore natural features.
Negative easements (sometimes referred to as scenic easements or easements for light and air) have applicability beyond conservation. For example, the value of a tower project in Manhattan will be increased dramatically if the developer has acquired the power to block construction of other buildings in the vicinity that may spoil the view or cut off light to interior spaces.
The phrase “in gross” added after “negative easement” clarifies that the benefit of a conservation easement need not run only to an adjoining landowner (such as the developer of the tower in the above example) but may also run to the benefit of a non-neighboring holder such as a land trust.[xi]
All easements must serve specific purposes. The conservation purposes are an integral part of the conservation easement. As long as the easement holder is acting to protect natural and scenic resources consistent with the conservation purposes of the easement (and the grant’s covenants), the landowner may not interfere with the exercise of the holder’s powers.
Easements by their nature are granted and held for specific purposes. An easement without a useful, viable purpose is a nullity and may be removed as an encumbrance on the land by a court of competent jurisdiction.[xii] Thus, a clear description in the grant of the valuable and viable purposes of the easement extending over an indefinite period of time is the foundation for an easement enforceable in perpetuity.
The purposes specifically stated in a conservation easement are called the “conservation objectives” in this guide and in the Model Grant of Conservation Easement and Declaration of Covenants (the “Model Grant”).[xiii] This is to avoid confusion between a conservation easement’s full set of conservation purposes (again, the “conservation objectives”) and the use of “conservation purposes” as a defined term in the Internal Revenue Code charitable gift rules, which require the inclusion of one or more of said purposes in the grant to support a qualified conservation contribution.[xiv]
In summary, the classic definition of a conservation easement may be restated in plain language as follows.
The power held by the easement holder to block land uses within a specifically identified property that are inconsistent with the conservation purposes of the easement.
A covenant “running with the land”—meaning it applies to present and all future owners of the real estate interest—is a promise declared by the owner of the real estate interest in the land to do, or not do, something that touches and concerns the land. In the grant, the landowners declare covenants applicable to their rights and privileges to do what they want with their property. Less readily apparent is that, in the grant, the holder declares restrictions and limitations on its conservation easement interest.[xv]
As earlier noted, grants may include one or more holder covenants, those covenants commonly including what this guide will label:
The nature and operation of these covenants are individually addressed below. The parties to a grant may expand upon these holder covenants to address other issues of concern, if any.
The safeguard against inappropriate transfer[xvi] is to limit transfer of holder’s easement interest to a nonprofit charity committed to conservation of natural resources or a governmental entity. The Model Grant requires any transferee to be both a “qualified organization” as defined in the IRC charitable gift rules[xvii] and duly authorized to hold conservation easements under the CPEA. Although a restraint on alienation,[xviii] the restriction is reasonable because it assures that all future transferees will have the commitment to enforce the easement in perpetuity and will qualify as successive holders under the CPEA.[xix]
The safeguard against conservation loss due to extinguishment [xx] assures that, in the event all or a portion of the eased property is the subject of either a taking in condemnation or a court order releasing the easement from the property, (1) the holder is entitled to be compensated for the loss of its easement interest in an amount commensurate with the value of the easement; and (2) that the holder must use such proceeds in furtherance of conservation purposes.
The safeguard for upholding conservation purposes[xxi] serves to assure that the holder and all successive holders will exercise their easement rights as and when needed to protect the natural and scenic resources of the eased property.[xxii] The safeguard of conservation purposes rounds out the safeguard on transfer by providing assurance that, not only will the holder have proper qualifications to serve as holder but will, in fact, take action, when necessary, to block land uses inconsistent with the conservation objectives of that easement.
Many easement holders, including users of the Model Grant, have demonstrated their commitment to enforce easements in perpetuity by voluntarily putting their easement assets at risk of forfeiture and transfer to a successive holder should they fail to do so.[xxiii] These land trusts accept that if, for whatever reason, the holder at some time in the future is no longer able or willing to exercise its power to block land uses inconsistent with conservation objectives, then the power ought to be removed from that holder and transferred to another.[xxiv]
The forfeiture provision creates a future contingent interest in the holder’s landholding, which may be diagrammed as follows: O to A but if condition X occurs then to B. The future interest is categorized as a shifting interest subject to condition subsequent. When incorporated into restricted gift agreements, this structure is recognized as imposing a measure of accountability by motivating the alternative beneficiary to monitor compliance with the terms of the gift.[xxv] In the case of a conservation easement, the structure provides the means for a beneficiary of a holder covenant to oust an ineffectual holder and transfer the easement to a successive holder willing and able to enforce the easement.
The Model Grant provision avoids, for several reasons, an automatic shifting of the easement interest from the existing holder to the successive holder. One reason is to protect the holder by requiring a court determination that the condition subsequent has, in fact, occurred before the easement interest shifts from the existing holder to the successive holder. The holder is entitled to due process of law before a beneficiary of the grant declares a forfeiture for failure to enforce the easement. Another reason is to protect the successive holder from finding itself, without warning, obligated to enforce a poorly funded, mismanaged, or disputed easement. The court proceeding will allow the successive holder the opportunity to raise these issues for resolution before accepting the easement.[xxvi]
The Internal Revenue Code’s charitable gift rules, which are relevant if a donor seeks federal tax benefits for the gifting of an easement, necessitate the establishment of covenants regarding transfer and extinguishment:
The federal regulations explicitly require a safeguard against inappropriate transfer:
A deduction shall be allowed for a contribution under this section only if in the instrument of conveyance the donor prohibits the donee from subsequently transferring the easement (or, in the case of a remainder interest or the reservation of a qualified mineral interest, the property), whether or not for consideration, unless the donee organization, as a condition of the subsequent transfer, requires that the conservation purposes which the contribution was originally intended to advance continue to be carried out. Moreover, subsequent transfers must be restricted to organizations qualifying, at the time of the subsequent transfer, as an eligible donee…”[xxvii]
The federal regulations also explicitly require a safeguard against conservation loss due to extinguishment:
When a change in conditions give [sic] rise to the extinguishment of a perpetual conservation restriction under paragraph (g)(6)(i) of this section, the donee organization, on a subsequent sale, exchange, or involuntary conversion of the subject property, must be entitled to a portion of the proceeds at least equal to that proportionate value of the perpetual conservation restriction, unless state law provides that the donor is entitled to the full proceeds from the conversion without regard to the terms of the prior perpetual conservation restriction.[xxviii]
The IRC charitable gift rules do not require incorporation of a specific holder covenant requiring holder to exercise its easement rights in perpetuity in furtherance of the conservation purposes of the easement. Nevertheless, a safeguard for upholding conservation purposes evidences that the holder qualifies under the gift rules as an organization having the commitment to protect the conservation purposes of the donation.[xxix]
The IRC charitable gift rules also do not require a forfeiture remedy but, again, such a remedy evidences the holder’s commitment to protect the conservation purposes of the donation.
Servitudes law requires separate analysis of the running of the burden of a covenant from the benefit of a covenant. In the case of holder covenants, the burden runs with the holder’s easement interest in the land and each successive holder of that interest.
The benefit of the holder covenants runs to those who have the power to compel holder to comply with the holder covenants either by being specifically named as a beneficiary in the grant, by application of the CPEA, or as a result of a court order in which the court recognizes certain persons as having enforcement rights with respect to the easement notwithstanding that they are unnamed in the grant.
The general rule in Pennsylvania is that a covenant may run to anyone intended to benefit by it. The common law rule that restrictive covenants only run to the benefit of adjoining landowners (the privity of estate requirement) was discarded in Pennsylvania by a 1956 appellate court decision (Appeal of J.C. Grille cited above). One result of that decision is that grants of conservation easement and declarations of restrictive covenants were legally valid and enforceable before passage of the CPEA. Another result of that decision is that there is no clarity under Pennsylvania law as to the universe of persons who may claim that they are intended beneficiaries[xxx] of a restrictive covenant. That is true as a general rule but, as to conservation easements under the CPEA, that law limits beneficiaries (those eligible to hold third-party enforcement rights) to land trusts and government.[xxxi]
If a land trust or other entity qualified to be holder[xxxii] is identified as a beneficiary in the grant, the identified beneficiary will have the right to enforce the holder covenants[xxxiii] running to its benefit.
The CPEA provides that, if the holder ceases to exist and no beneficiary is specifically named in the grant, and no qualified organization is found to voluntarily accept transfer of the holder’s interest in the land, the municipality in which the land is located automatically becomes the default holder.[xxxiv]
Pennsylvania courts are not bound by traditional common law rules limiting the running of the benefit of covenants. The court may hold, on the basis of the particular facts and circumstances of the case, that the benefit was intended to run to others who are not party to the covenant, not named as a beneficiary of the covenant and not the owner of neighboring land.[xxxv] The possibility that the Attorney General may be recognized by Pennsylvania courts as having a third-party right of enforcement of the holder covenants, whether or not specifically identified in the grant, is discussed below.
The grant is not a contract; thus, there is no reason to assume that the benefit of the holder covenants runs to the original easement grantors or the then-current landowners.
In the typical form of grant, the covenants running with the landowner’s interest in the land consume a large part of the text; for example, in the Model Grant the entirety of articles 2, 3, 4, and 5 address issues that may arise in the future pertaining to what landowners may or may not do with the land. Some mistake the landowner covenants as the essence of the grant. However, as discussed above, the landowner covenants are but one of three servitudes (conservation easement, holder covenants and landowner covenants) included in the grant. Of the three, the landowner covenants are accorded the lowest priority. They are subordinate to the conservation easement and the holder covenants burdening the superior interest held by the holder.
The grant of the conservation easement vests in the holder the power to take action to protect the conservation objectives of the easement. The landowner covenants handle the details about whether existing or future practices and improvements are—or are not—consistent with the conservation objectives.
Example. Landowners assume that farming and timbering in accordance with their past practices is consistent with conservation objectives and, thus, do not interfere with the conservation easement. The holder may not have fully considered whether all of their existing practices are, or are not, consistent with the conservation objectives. A discussion of the rules typically included in the holder’s form of grant affords them both the opportunity to address concerns and set a program satisfactory to both that allows farming and timbering to continue subject to a set of limitations that will avoid a later dispute about whether a particular practice is or is not consistent with conservation objectives.
Covenants establish an ongoing relationship between the holders of concurrent estates or interests in the property. They serve a useful purpose (avoiding disagreements and mistaken assumptions) whenever multiple parties hold different interests in the same property at the same time. Well-drafted real estate documents typically include both a grant of the interest (for example, easement or leasehold) and a detailed list of covenants documenting the arrangements between the holders of the concurrent interests.
Simple Example: One neighbor grants an access easement over a shared driveway to the adjoining neighbor. A well-drafted granting document will address issues such as intensity of use and responsibilities for repair and maintenance to achieve the common goal of shared access without disputes or misunderstandings.
Complex Example: The developer of an office park records a declaration in which easements for roads and other common facilities are established for the common purpose of serving a number of buildings within the development. The declaration then establishes, by a program of affirmative and negative covenants, a reasonable and responsible system for multiple owners, lessees, and mortgagees to coexist and share responsibilities to achieve the common goal of a well-operated, functional office park.
The burden of landowner covenants runs with the fee simple estate in the land. Any transferee of the landowners’ interest in the land is bound to observe the landowner covenants. That includes not only subsequent owners but any grantee of an easement, lease, or other real estate interest by, through, or under the landowners.
The Model Grant, as with other documents granting conservation easements, explicitly provides the holder with a right of enforcement of the landowner covenants.[xxxvi] However, the analysis of the running of the benefit does not end there under the law of servitudes. Covenants may run to others who are not parties to the grant. Who else may be entitled to the benefit of the landowner covenants either by the terms of the grant or by applicable law?
A land trust or governmental entity named as a co-holder of the easement has a direct right to enforce the landowner covenants exactly the same as the first-named holder.[xxxvii]
The Model Grant provides an opportunity in article 1 to specifically identify beneficiaries of the easement and, if one or more beneficiaries are named in article 1, provisions are added to article 6 to identify the specific rights accorded each beneficiary. (See the Supplemental Provisions: “Providing for Beneficiaries of the Grant.”) The identified beneficiaries are often local or state governments contributing funding for the conservation project. They are sometimes another land trust willing to take over responsibility for enforcement of the landowner covenants should the holder fail to do so.[xxxviii] Both of these types of entities qualify as holders of third-party enforcement rights under the CPEA and have standing to intervene in a matter involving the conservation easement under the CPEA.[xxxix]
The law in Pennsylvania is that landowners who purchase lots subject to a common plan of development have equitable rights to enforce the plan limitations as against each other. A conservation easement plan, or a program for limited development included in the covenants of a grant, may be found to be such a common plan. However, the common law right of landowners to enforce, among themselves, restrictions inferable from a common plan does not elevate them to persons holding a “third-party right of enforcement” under the CPEA.[xl] Those rights can only be held by an entity qualified to be a holder.[xli] Individuals are excluded as beneficiaries; nevertheless, the landowners under a single grant have standing under §5 of the CPEA to commence a legal or equitable action affecting a conservation easement. Presumably this is to preserve their rights, if any, to enforce (as against other lot owners) a common plan of development.
Some advocates for government policing of a holder’s management of its conservation easements have looked to the public trust doctrine or charitable trust law as a means to impose governmental oversight upon amendment (and perhaps other) management decisions of easement holders. The policy objective of these advocates is clear: to insert the state attorney general or the courts as a control on the discretion of the holder’s governing board so as to better assure the continuing achievement of the conservation purposes set forth in grants of conservation easement.
As explained in the WeConservePA guide Not a Public Trust, no legal precedent exists in Pennsylvania for finding that a conservation easement acquired by a private land trust is a public trust and, should such a claim be asserted, this would constitute a taking for which compensation would be due to the land trust. (The applicability of either the public trust doctrine, or its codification in the Donated or Dedicated Property Act, to government-held conservation easements is beyond the scope of Not a Public Trust and this guide.)
The WeConservePA guide Not a Charitable Trust discusses the application of charitable trust principles to donated conservation easements. In brief, there is little evidence to support that a gifted conservation easement, in the absence of a charitable trust agreement (not to be confused with the grant), is a charitable trust in Pennsylvania; indeed, there is compelling evidence to the contrary.
The conclusions (that the public trust doctrine and charitable trust theory are largely inconsequential to conservation easement management in Pennsylvania) do not discount a potential role for the Attorney General in conservation easement oversight. To the contrary, the following section identifies two pathways by which the Attorney General may justify a role in ensuring the perpetuity of the natural resource protections provided by conservation easements. [xlii]
What happens if the viability of an easement is jeopardized by a holder unable or unwilling to take appropriate steps to uphold the conservation purposes of the easement and there is no named land trust beneficiary or local government beneficiary available or willing to do so?
The Attorney General has at least two bases of authority upon which to justify acting when necessary to protect the long-term viability of conservation easements held by land trusts. The first basis is to exercise its rights as an intended beneficiary of holder covenants provided in the grant either because it is named in the grant or a court finds it an intended, albeit unnamed, beneficiary. The second basis is to exercise the Attorney General’s legal authority to protect charitable assets from irresponsible use or diversion from their charitable purposes.
Pennsylvania law permits a court of competent jurisdiction to preserve the viability of covenants by inferring the existence of beneficiaries not identified in the grant and not appurtenant landowners.[xliii] An example of the legal argument that may persuade a court to recognize the Attorney General as a third-party beneficiary of the holder covenants is as follows:[xliv]
The Model Grant furnishes the opportunity to name beneficiaries of the easement and to specify the rights accorded to each. If agreeable to the parties, the Attorney General may be specifically identified in the grant to provide assurance of the availability of at least one easement beneficiary authorized to enforce the easement if neither the holder nor any other identified beneficiary is ready or willing to do so.
In its capacity as an intended beneficiary of holder covenants (a holder of third-party rights of enforcement), the Attorney General has standing to intervene in matters affecting a conservation easement under §5(a)(5) of the CPEA.
The Attorney General has authority under Pennsylvania common law to intervene to protect the public interest[xlv] in the responsible use of charitable assets.[xlvi] Included in this general authority is the right and duty to exercise oversight to see that charitable assets are used consistent with the purposes for which the charity was formed and accorded favorable tax and other treatment under applicable law.
The Attorney General has authority to act to ensure that assets committed to charitable purposes are not wasted, frittered away, or diverted.[xlvii] Conservation easements are charitable assets, whether purchased or gifted. Thus, apart from the power to enforce holder covenants directly as an intended beneficiary, the Attorney General has the authority to intervene when easement assets are abandoned, used irresponsibly, or diverted from their conservation purposes as indicated in the below examples:
The Attorney General has standing under §5(a)(6) of the CPEA to exercise its common law authority to protect the public interest in the responsible use of charitable assets as a “person otherwise authorized under Federal or State law.”
In summary, this piece addresses, among other aspects of conservation easements, the following concepts and observations:
[i] The act of June 22, 2001 (P.L. 390, No. 29) (32 P.S. §§5051-5059) was enacted in its final form by House Bill 975, PN 2294.
[ii] This is an important distinction for a number of reasons. For one, changing the text of the grant (an amendment) may or may not change the conservation easement. The easement is an interest in the conserved land. It cannot be amended although it may be changed (strengthened or weakened) by an amendment to the grant. The perpetuity requirement in §170(h) of the Internal Revenue Code applies to the conservation easement—not the grant.
[iii] This title also avoids the word “easement,” which can bring to mind transmission line, gas pipeline, and other types of access easements that do not engender the same warm feelings as the notion of a voluntary agreement.
[iv] Restatement of the Law Third, Property (Servitudes) §1.2(1) (hereafter referred to as the “Restatement”).
[v] Any deed or instrument in writing that is conveying or releasing land in Pennsylvania is, by the use of the words “grant and convey” effective to pass fee simple title in the premises conveyed to the grantee [or, if so designated, a lesser estate], if the grantor in fact possessed such a title. 21 P.S. §2.
[vi] Frable v. Green, 2 Pa. D&C 4th 179 (1989); Manbeck v. Jones, 190 Pa. 171.
[vii] Tide-Water Pipe Co. v. Bell, 280 Pa. 104 (1924).
[viii] An easement creates a nonpossessory right to enter and use land in the possession of another and obligates the possessor not to interfere with the uses authorized by the easement. Taylor v Heffner, 359 Pa. 157 (1948).
[ix] CPEA §4(b).
[x] Simplex Precast Industries Inc. v. Biehl, 395 Pa. 105 (1959).
[xi] Adoption of Pennsylvania’s CPEA was desirable but not necessary to ensure the rights of non-neighboring holders. Grants of conservation easements before the adoption of the CPEA in 2001 created legally valid and enforceable real estate interests under the common law whether or not running in gross or appurtenant to the land subject to the easement. For a more detailed discussion, see the discussion of Appeal of J.C. Grille, 181 Pa. Super. 460 (1956) in WeConservePA’s Guide to the Conservation and Preservation Easements Act.
[xii] McCullough v. Commonwealth DOT, 134 Pa. Commw. 95; 578 A.2d 568 (1989).
[xiii] Published by WeConservePA. The Model Grant of Conservation Easement and Declaration of Covenants, the most thoroughly vetted conservation easement granting document in the nation, is available free-of-charge to all thanks to WeConservePA’s donors. It includes nearly 100 pages of commentary.
[xiv] 26 U.S.C. 170(h)(4)(A). 26 I.R.C. §170(h) and accompanying regulations will be referred to in this guide as the “IRC charitable gift rules.”
[xv] The focus of this guide is on Pennsylvania law and practice. No exhaustive survey has been made of grant forms in use in other states. References to holder covenants included in forms other than the Model Grant are based upon personal experience of the authors and review of the model form included in the Model Conservation Easement and Historic Preservation Easement, 1996, (Land Trust Alliance, 1996) authored by Thomas S. Barrett and Stefan Nagel (the “1996 LTA Model”) and the sample provisions included in The Conservation Easement Handbook (2nd ed., Land Trust Alliance and The Trust for Public Land, 2005) authored by Elizabeth Byers and Karin Marchetti Ponte (the “2005 LTA Provisions”).
[xvi] Model Grant §6.01(b) of the 7th edition. The corresponding holder covenant in the 1996 LTA Model is found at ¶10 (Assignment) and in the 2005 LTA Provisions at ¶14.C. (All Model Grant references in this guide refer to the 7th edition, most recently updated on 11/8/2021 as of this writing.)
[xvii] IRC Regulations section 1.170A-14(c).
[xviii] Restraints against alienation (transfer) are not enforceable under the law of servitudes unless they are reasonable. Reasonableness is measured by balancing the utility of the purpose served by the restraint against the harm that is likely to flow from its enforcement. §3.4 Restatement comment c.
[xix] The CPEA defines an easement transferee as a “successive holder.” Only a land trust or a governmental entity is qualified to be a holder or a successive holder.
[xx] Model Grant §6.01(c) and §1.07(e).
[xxi] Model Grant §6.01(a); the 1996 LTA Model does not contain a specific duty to enforce in perpetuity; the 2005 LTA Provisions provide in §14.B. that the holder has “the commitment to preserve the conservation values of the Protected Property.”
[xxii] The only exception to this general rule is that the holder is not obligated to contest a taking of the conservation easement under eminent domain. CPEA §4(d).
[xxiii]Model Grant §6.01(d). The 1996 LTA Model provides, as a supplementary provision, an executory limitation to follow ¶10 that provides for automatic transfer to a backup grantee if grantee ceases to exist or to qualify as a qualified organization under the charitable gift rules. ¶16.A. of the 2005 LTA Provisions provides that “If Holder shall cease to exist or to be a qualified organization under §170(h) of the Internal Revenue Code, or to be authorized to acquire and hold conservation easements under [state law] or should Holder acquire the entire fee interest in the Protected Property, then Holder’s rights and obligations under this Easement shall become immediately vested in [a backup grantee or as determined by a court of competent jurisdiction].
[xxiv] Those who opine that the conservation purposes of an easement are not protected in perpetuity unless a public trust or charitable trust is imposed on them have not considered whether, as a general rule, charitable organizations (other than land trusts) are willing to put their charitable assets at risk of forfeiture, without compensation, for failure to use them responsibly in furtherance of their charitable mission. If land trusts are notable exceptions to that general rule, and voluntarily follow a higher standard than other charitable organizations, then it would appear that conservation easements are afforded greater protection from misuse than charitable assets held by other charitable organizations.
[xxv] Eason, John K., The Restricted Gift Life Cycle, or What Comes Around Goes Around, 76 Fordham L. Rev. 693, 704 (2007).
[xxvi] In Pennsylvania, the successive holder is not obligated to enforce the easement until it signs and records an acceptance in the public records. CPEA §4(c). See discussion of “Automatic Shift to Backup Grantee” in the WeConservePA guide Holders, Beneficiaries, and Backup Grantees.
[xxvii] Reg. 1.170A-14(c)(2).
[xxviii] Reg. 1.170A-14(g)(6)(ii).
[xxix] Regulations section 1.170A-14(c). See the WeConservePA guide Amending Grants of Conservation Easement: Legal Considerations for Land Trusts for a discussion of items furnishing evidentiary support for a finding that a land trust is a qualified organization under the IRC charitable gift rules.
[xxx] The meaning of “beneficiary” may change depending upon the context. When applied to the discussion of servitudes (other than conservation easements), as is the case here, it means the person intended to benefit from a covenant. The CPEA narrows the range of beneficiaries of conservation easements covered by that statute to land trusts and government. Trust law beneficiaries are determined by an entirely different set of principles as discussed in Not a Charitable Trust.
[xxxi] The CPEA defines third-party right of enforcement as “[a] right provided in a conservation easement to enforce any of its terms, granted to a governmental body, charitable corporation, charitable association or charitable trust, which, although eligible to be a holder, is not a holder.” §3.
[xxxii] The CPEA requires a holder to be a governmental body or a charitable corporation, charitable association, or charitable trust registered with the Pennsylvania Bureau of Charitable Organizations, exempt from taxation pursuant to IRC §501(c)(3) or other statute, and having a conservation purpose. CPEA §3.
[xxxiii] See Holders, Beneficiaries, and Backup Grantees for suggestions as to agreements providing for notice and opportunity to cure before covenant beneficiaries take action to enforce holder covenants.
[xxxiv]CPEA §4(d). The CPEA provision does not explain how that transfer will occur without adjudication by the courts nor does it consider how an unwilling municipality may be compelled to accept the transfer.
[xxxv] As to conservation easements, the CPEA limitation to land trusts and government remains applicable.
[xxxvi] See, for example, §6.02 of the Model Grant.
[xxxvii] For an in-depth discussion of the relationships between easement co-holders, see Holders, Beneficiaries, and Backup Grantees.
[xxxviii] The Model Grant provides a menu of options the beneficiaries may select as their beneficial rights with respect to the grant (or they may craft their own customized rights).
[xxxix] CPEA §5(a). For a fuller discussion of issues pertaining to standing to intervene in a matter involving a conservation easement, see the WeConservePA guide Who Has Standing?.
[xl] Holders of third-party rights of enforcement are limited to persons eligible to be holders—land trusts and governmental entities. CPEA §3. For an in-depth discussion of the rights of “Beneficiaries” as defined in the Model Grant and as persons holding “Third Party Rights of Enforcement” in the CPEA, see Holders, Beneficiaries, and Backup Grantees.
[xli] The Model Grant rules out other owners as potential beneficiaries of the grant although the Commentary provides alternate provisions if it is intended that the owners of lots bound by the same grant have the right to rely upon the easement plan as a common plan of development.
[xlii] Holder covenants are included in many if not most grants to better ensure enforcement of the easement in perpetuity. However, except as required by the IRC charitable gift rules and perhaps in conjunction with requirements for tax credits in states that offer such tax benefits , legal requirements that a grant include holder covenants appear to be generally absent. The land trust community may want to turn its attention to this as a public policy issue because it directly addresses concerns about the long-term viability of conservation easements as a tool for resource protection. Moreover, inclusion of meaningful holder covenants in every grant would assure that all conservation easements are accorded the same base level of protection. The (misguided) notion that charitable trust law can be used to better ensure easement permanence, in contrast, excludes from consideration all purchased easements and those containing an amendment clause in the grant.
[xliii] Appeal of J.C. Grille cited above.
[xliv] For example, the Attorney General may want to exercise the forfeiture remedy contained in a grant that does not explicitly identify a beneficiary. While the taking of a conservation easement by the government for transfer to another holder is an illegal condemnation, a lawful means to accomplish the goal of upholding the conservation easement’s purposes may be for the Attorney General to proceed as the beneficiary of that holder covenant.
[xlv] The General Assembly has recognized the public interest in conservation easements; for example, §3 of the CPEA provides as follows: “The General Assembly recognizes the importance and significant public and economic benefit of conservation and preservation easements in the ongoing efforts to protect, conserve or manage the use of the natural, historic, agricultural, open-space and scenic resources of this Commonwealth.
[xlvi] Property committed to charitable purposes has special protection under the law because it relieves the public burden by advancing one or more general or specific charitable causes. As soon as money or property is donated or committed to a charitable purpose, the Attorney General acts on behalf of the public’s interest to ensure it is duly administered; including the assets held by nonprofit organizations formed for charitable purposes. Handbook for Charitable Nonprofit Organizations published by Commonwealth of Pennsylvania, Office of Attorney General.
[xlvii] The Attorney General is responsible for public supervision of charities through his parens patriae powers. In re Milton Hershey School Trust, 807 A.2d 324 (Pa.Commw. 2002).
[xlviii] 15 Pa.C.S.A. §5547 (b) provides as follows: Nondiversion of certain property.--Property committed to charitable purposes shall not, by any proceeding under Chapter 59 (relating to fundamental changes) or otherwise, be diverted from the objects to which it was donated, granted or devised, unless and until the board of directors or other body obtains from the court an order under 20 Pa.C.S. Ch. 61 (relating to estates) specifying the disposition of the property. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989).
[xlix] As applied to grants of conservation easements, the possibility of judicial extinguishment is reason to resist restricting easement purposes to a few narrow objectives (which may become defunct over time) and, instead, support expansive easement objectives with a greater likelihood of remaining viable over an indefinite period.
[l] In re Preservation Alliance for Greater Philadelphia, O.C. No. 759 (Ct. Com. Pl. of Philadelphia County, PA June 28, 1999). Restatement §7.11 provides the following with respect to “Modification and Termination of a Conservation Servitude because of Changed Conditions”:
A conservation servitude held by a governmental body or conservation organization may not be modified or terminated because of changes that have taken place since its creation except as follows:
