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The Model Grant of Conservation Easement and Declaration of Covenants may be used to amend and restate a grant of conservation easement by following the instructions contained in this guide.
[The words are the same, but some users may find the formatting of the PDF version of this guide more helpful in preparing a restatement than this web version.]
Depending on the particular facts and circumstances, changes to a conservation easement may be best accomplished through a simple amendment or by an amendment and restatement in full of the easement document. The guide Amend OR Amend and Restate describes the situations that best lend themselves to each approach.
If a simple amendment is judged most appropriate, the Model Amendment of Grant of Conservation Easement and Declaration of Covenants with Commentary may be used to accomplish the changes.
The guide Adding to Land Under Conservation Easement describes three alternatives for adding to eased land and includes a model document to help implement one of the alternatives.
For the broad range of scenarios where it is advantageous to restate an existing grant, the Model Grant of Conservation Easement and Declaration of Covenants (the “Model”) may be modified for the task. This guide provides detailed instructions to accomplish this while ensuring that the restated grant retains the same priority and enforceability as the original grant.
Entitle the restated grant “Amended and Restated Grant of Conservation Easement and Declaration of Covenants” to indicate that it is not an entirely new grant of easement.
In the opening recital, replace “THIS GRANT OF CONSERVATION EASEMENT AND DECLARATION OF COVENANTS” with:
THIS AMENDED AND RESTATED GRANT OF CONSERVATION EASEMENT AND DECLARATION OF COVENANTS.
In the opening recital, change the term “Easement Date” to “Restatement Date.” Generally, that substitution may be made throughout the restated grant; however, in a few instances (noted below), reference to the date of the original grant is more appropriate.
Change the caption of §1.01 from “Property” to “Original Grant; Property” and substitute the following for the first sentence of §1.01:
On _______ (the “Easement Date”), [insert name or names of the original grantors of the easement or, if the ownership has not changed, the “undersigned Owner or Owners”] granted and conveyed to Holder a [insert name of document; for example, “Deed of Grant of Conservation Easement and Declaration of Restrictive Covenants”] (the “Original Grant”) on the Property described below and more fully in exhibit A (the “Property”). The Original Grant was recorded on ____ in the Public Records in Book ___ Page ____. The undersigned Owner or Owners and Holder desire by the execution and recordation of this Grant to amend and restate the Original Grant in its entirety commencing as of the Restatement Date set forth above.
(Follow this text with the Property identification table set forth in §1.01.)
If the restated grant incorporates a new description of the Property or an expanded set of Conservation Objectives, replace the first sentence of §1.02(a) with the following text:
The Owners have granted and conveyed or, by this Grant, do grant and convey to Holder an unconditional and perpetual easement upon the entire Property including any land not described as within the bounds of the Property under the Original Grant for the purpose of advancing the Conservation Objectives described below (that easement, the “Conservation Easement”).
This text assures that the conservation easement has been granted with respect to the entirety of the Property described in the restated grant regardless of any inaccuracies in the description incorporated into the original grant. If there is absolutely no change in the Property description, then delete from the provision the words “including any land not described as within the bounds of the Property under the Original Grant.”
If the Property description is not changing, then replace the first sentence of §1.02(a) with the following text:
The undersigned Owner or Owners and Holder agree and confirm that, as of the Restatement Date and at all times thereafter, the easement granted and conveyed under the Original Grant and affirmed with this Grant (that easement, the “Conservation Easement”) (1) remains valid, binding and enforceable with respect to the Property prior in right to all other Liens or other matters affecting title to the Property but for Existing Servitudes and (2) includes within its scope all of the purposes identified as the Conservation Objectives whether or not mentioned in the Original Grant.
This text reconfirms the continued validity, enforceability and priority of the conservation easement established by the original grant.
In §1.02(b) replace “establish” with “amend and restate the.”
If the Holder Covenants are being modified, in §1.02(c) replace “accepts” with “affirms its acceptance of” and replace “establishes” with “amends and restates the.”
If the Holder covenants are not being modified, shorten §1.02(c) to “By this Grant, Holder affirms its acceptance of the Conservation Easement.”
The Model provides users the ability to designate up to three protection areas for the Property, each with its own set of land use restrictions and permissions. As one moves from Highest Protection Area to Standard Protection Area to Minimal Protection Area, the easement is progressively more permissive regarding the improvements, activities, and uses permitted on the land. (The Model also provides for the potential designation of Woodland Area to allow users to further refine restrictions in the Standard Protection Area.) Older grants generally lack such a fine-tuned system, identifying differing levels of protection, if at all, by identifying a building area. When practicable, implementing protection areas for the first time as part of a restatement process provides an opportunity to better attune restrictions to the desired conservation outcomes and improve stewardship efficiency. Doing so will require a new Easement Plan attached as exhibit B and incorporated into §1.03.
However, many benefits of restatement can be achieved by simply transferring the substantive restrictions contained in the original grant into the Model’s structure and format for a single protection area, taking care to resolve ambiguities and add clarity wherever possible. Where this is intended, use only the Model’s Highest Protection Area or Standard Protection Area, and reference as appropriate the options in the Model’s Commentary labeled No Highest Protection Area, No Standard Protection Area, and No Minimal Protection Area.
You should not simply rename an older grant’s “building area” as a “Minimal Protection Area” in the restatement. The building area and the Model’s Minimal Protection Area are similar in that they both usually identify an area where a substantial structure is permitted; however, beyond that, they are likely quite different in concept and implementation. (The philosophy behind the Minimal Protection Area is to sharply limit its size but to be quite permissive regarding what is permitted and to minimize the need for monitoring in the area.)
Section 1.04 of the Model sets forth the Conservation Objectives of the easement. To complete this section for a restatement, you will have to study the text of the original grant and likely the baseline documentation to glean the easement’s intended purposes. You should take care to be as accurate as possible in reflecting the original intended purpose of the easement in the Conservation Objectives. (See the guide Amending Grants of Conservation Easement: Legal Considerations for Land Trusts.)
Many easement documents drafted before the Model’s debut defined the purposes of the easement rather generally—often reciting verbatim the definition of conservation purposes contained in the charitable gift provisions of the federal internal revenue code (IRC 170(h)) with little elaboration. Rather than shoe-horning conservation goals into a tax code-driven provision, the Model’s philosophy is to be conservation-driven and tax law-compliant, which tends to deliver a more comprehensive set of conservation purposes and a more detailed description of each purpose. Grants that used the tax code formulation or a similarly generic approach to conservation purposes can be amended and restated to expand the purposes and improve upon the ultimate conservation results delivered by the easement. For example, older grants seldom included water resource protection goals; a restatement is a perfect opportunity to include this valuable conservation purpose.
Conservation objectives in older grants commonly included extensive recitation of now-obsolete public policies, documents, or records (e.g., comprehensive plans, county planning documents, stream and watershed designations, etc.). In most cases, these references were intended to demonstrate consonance with public policy in support of the contribution’s tax deductibility under the Code. Retaining these references for historical reference (adjusting to past-tense verbiage as necessary) is harmless at worst and mildly illuminating at best. Replacing them with references to modern analogous materials is not necessary, unless it is judged to be useful in service of a new tax deduction to be claimed in connection with the restatement.
Restatement affords Holder the opportunity to check the adequacy of existing baseline documentation and supplement it to reflect existing conditions as of the Restatement Date and current standards for such documentation. To assure clarity as to the definition of “Baseline Documentation,” substitute the following for the definition of Baseline Documentation in §1.05:
As of the Restatement Date, the undersigned Owner or Owners and Holder have signed an acknowledgment of the accuracy of a report that incorporates both the baseline documentation referred to in the Original Grant as well as additional photographs and information that reflect existing conditions as of the Restatement Date (that report, the “Baseline Documentation”).
With respect to the amended and restated grant, no charitable gift is allowed unless the Owners make an additional donation either by giving up valuable rights reserved in the original grant or by conveying the easement over land not included in the original grant.
No Past or Present Qualified Contribution
Section 1.07 may be deleted if the original grant was not used and the amended and restated grant will not be used as a qualified conservation contribution for purposes of the charitable gift provisions of the Code.
Past Contribution—No; Present Contribution—Yes
If the original grant was not used as a qualified conservation contribution but the greater conservation value created by the amended and restated grant will be used as a qualified contribution, keep §1.07 in place and unchanged.
Past Contribution—Yes; Present Contribution—No
If the original grant was used as a qualified conservation contribution but the amended and restated grant will not be used as an additional contribution, replace the first sentence of §1.07(a) “Qualified Conservation Contribution” with the following text:
The Original Grant, a transfer of a partial interest in real estate, was intended to qualify as a qualified conservation contribution (as defined under §170(h)(1) of the Code).
In the first sentence of §1.07(b) “Conservation Purposes,” change “The undersigned Owner or Owners have granted the Conservation Easement exclusively for…” to “The Conservation Easement has been granted exclusively for…”
For an amendment to an existing conservation easement to qualify for a tax deduction, the added conservation value must qualify as a new and separate qualified conservation contribution under the Code and Regulations. This restatement should therefore be drafted to equally honor the Code’s requirements of both contributions.
If the original grant was used as a qualified conservation contribution and the amended and restated grant is intended to result in an additional qualified conservation contribution, replace the first sentence of §1.07(a) “Qualified Conservation Contribution” with the following text:
This Grant and the Original Grant, each a transfer of a partial interest in real estate, are intended to qualify as qualified conservation contributions (as defined under §170(h)(1) of the Code).
In the first sentence of §1.07(b) “Conservation Purposes,” change “The undersigned Owner or Owners have granted the Conservation Easement exclusively for…” to “The Conservation Easement has been granted exclusively for…”
For a conservation easement to become a qualified conservation contribution under the Code, the Regulations (Section 1.170A-14(g)(6)(i)-(ii)) require that, in the unlikely event that the easement (or a portion of the easement) is extinguished, the holder of the easement is entitled to a share of the proceeds at least equal to the proportionate value of the easement to the unrestricted value of the property, calculated and fixed at the time of donation, and that those proceeds must be used to advance the same conservation purposes served by the original contribution. This “proportionate value” requirement advances the Code’s “protected in perpetuity” objective by resolving an important issue: how can the public purposes of the federal subsidy (foregone tax revenue to the federal government) be perpetually preserved if the easement itself is one day compromised? The proportionate value regulations represent the mechanism selected by the Internal Revenue Service to ensure that the full value of the claimed tax deduction will continue advancing conservation purposes forever, even if the easement cannot. The Model’s §1.07(e) is designed to accommodate this requirement as to an easement’s donation.
Note: In 2024, the Federal Tax Court held that Section 1.170A-14(g)(6)(ii) is procedurally invalid; however, the prevailing view among practitioners appears to be that it is prudent to continue preparing easement documents consistent with the requirements until revised guidance is available.
In the case of an amendment that is itself intended to qualify as a deductible contribution, satisfying the Regulations’ extinguishment proceeds requirements is not straightforward. Because property values are dynamic and complex, simply recalculating proportionate value as of the restatement date presents a risk that the ratio might decrease. This could occur even if the amendment objectively increases restrictions and decreases fair market value. This possibility presents a clear tension with the Regulations: the amount of federal subsidy flowing to the easement has increased, coincident with a decrease in the amount of the subsidy that will be protected in perpetuity in the event of an extinguishment. Absent clear guidance from the IRS, prudent practitioners will prepare the restatement language in a manner that prevents this outcome and honors the perpetuity objectives of the Code.
The simplest scenario occurs where the additional qualified conservation contribution results solely from adding land to the eased property while restrictions on the original property remain constant. This is functionally identical to acquiring a new easement. Accordingly, it is reasonably sufficient to provide in the restated grant that (1) the proportionate value established at the time of the original grant will remain constant with respect to the previously eased land, and (2) a new and separate proportionate value is established with respect to the additional land on the Restatement Date. In this instance, replace the second sentence of 1.07(e) with the following:
The fair market value of the right is to be determined in accordance with the Regulations; i.e., with respect to the portion of the Property that was subject to the Original Grant, it is at least equal to the proportionate value that the Conservation Easement bore to the value of the land subject to the Conservation Easement on the Easement Date; and with respect to any portion of the Property that is added by this Grant, it is at least equal to the proportionate value that the restrictions contained in this Grant pertaining to such added portion bears to the value of such added land on the Restatement Date (individually, or collectively, as the case may be, the “Proportionate Value”).
A more nuanced approach is required if the new tax deduction is predicated upon changes to the restrictions contained in the Grant affecting the originally eased land (e.g., elimination of a building right or Minimal Protection Area), whether or not accompanied by additional land. In the absence of specific direction from the IRS, various approaches might be taken to ensure that the perpetuity purposes of the Code will be honored. Two are offered here.
The first option is to provide that the controlling proportionate value is the greater of two ratios: the ratio of the easement value to the Property value at the time of the original grant, and the ratio of the easement value to the land value at the time of the restatement. This formula guarantees that the controlling ratio will be at least as great as the one originally established and that any increase in proportionate value resulting from the amendment will also be captured. The principal benefit of this approach is its simplicity, reducing the likelihood of confusion or conflict. To implement this framework, replace the second sentence of 1.07(e) with the following:
The fair market value of the right is to be determined in accordance with the Regulations; i.e., it is at least equal to the greater of (1) the proportionate value that the Conservation Easement as of the Easement Date bore to the value of the Property as a whole as of the Easement Date; and (2) the proportionate value that the Conservation Easement as of the Restatement Date bears to the value of the Property as a whole as of the Restatement Date (such greater ratio, the “Proportionate Value”).
A significantly more complex option can ensure that Holder’s share of extinguishment proceeds will in all cases increase with landowner’s claim of an additional qualified conservation contribution, while also making sure that the total share of proceeds remains rational. While ensuring that the share of proceeds increases along with the increase in protected conservation values has a compelling logic to it, this option requires a confoundingly complex mathematical formula, creating potential risks of confusion and disagreement. If this method is selected, notwithstanding its challenges, replace the second, third, and fourth sentences of 1.07(e) with the following:
The fair market value of the right is to be determined as follows: it is at least equal to the sum of (1) the value of the Property unencumbered by the Conservation Easement minus the value of the Property as encumbered by the Original Grant, that number divided by the value of the Property unencumbered by the Conservation Easement, all values being as of the Easement Date, the resulting number then multiplied by the value of the Property as unencumbered by the Conservation Easement as of the applicable date of reference and (2) the value of the Property as encumbered by the Original Grant (but not this Grant) minus the value of the Property as encumbered by this Grant, that number divided by the value of the Property as encumbered by the Original Grant (but not this Grant), all values being as of the Restatement Date, the resulting number then multiplied by the value of the Property as encumbered by the Original Grant (but not this Grant) as of the applicable date of reference. If the Conservation Easement or a portion of it is extinguished, Holder is entitled to the greater of (1) the amount provided for in this paragraph, and (2) the amount otherwise payable to Holder under this Grant. Holder must use funds so received for conservation purposes (as defined in the Regulations).
You must choose whether to define “Existing Improvements” (article 9) as of the Restatement Date or the original Easement Date. Holders desiring to make a fresh start with the easement documentation will prefer the definition to refer to the Restatement Date. Others will find it clearer to define Existing Improvements as of the Easement Date.
If the Restatement Date is selected, you must consider that Improvements constructed before the Restatement Date are grandfathered as Existing Improvements under the restatement and the reference point for determining Additional Improvements likewise moves forward to the Restatement Date. As a result, limitations included in the original grant must be checked and revised in the restated grant to reflect the change.
If the Easement Date is selected, you must consider that the revised Baseline Documentation updated to the Restatement Date will show Improvements constructed after the Easement Date. To clarify, the definition of Additional Improvements in the Glossary may be supplemented as follows:
Improvements shown on the Baseline Documentation as of the Restatement Date but not included as Existing Improvements as of the Easement Date are considered to be Additional Improvements for purposes of interpreting and applying the provisions of this Grant.
A summary of the rationale for Holder’s decision to change the terms of the original Grant guards against misinterpretation and supports the conclusion that Holder has acted in accordance with all legal and ethical standards. You may want to consider adding a section, such as the following, to the end of article 1 to present background material relevant to the Holder’s decision to amend and restate:
1.1_ Consistency of Amendment and Restatement with Applicable Law and Policy
Holder has entered into this Grant because it has concluded that the amendment and restatement of the Original Grant strengthens the conservation easement held by it with respect to the Property, furthers the conservation purposes of the Original Grant, and otherwise complies with Applicable Law and Holder’s policy on amendment of easements.
The provision may stop here or additional support may be added, for example:
This Grant does not diminish in any material way the protections on natural and scenic resources set forth in the Original Grant.
This Grant strengthens the Conservation Easement by defining as the Conservation Objectives the protection of the specific resource values within the Property intended to be protected by the Conservation Easement.
This Grant enhances enforceability and easement administration by clearly stating the limitations on future use and development agreed to by Owners and Holder.
This Grant brings easement administration practices into conformity with Holder’s current practices, which more effectively and efficiently serve to uphold the Conservation Objectives than Holder’s older practices.
Holder, having made all requisite inquiry, is satisfied that: (i) the amendment and restatement effected by this Grant significantly advances Holder’s charitable purpose of protecting natural resources, and (ii) any benefits to private interests resulting from the amendment and restatement are no more than incidental (in both nature and amount) within the meaning of the Code and Regulations.
