Pennsylvania law and policy robustly support the binding nature of restrictions in grants of conservation easement on both subdivision and transfer of portions of eased land out of the whole. They provide an ironclad basis for the enforcement of these restrictions in court.
Grants of conservation easement generally and explicitly prohibit subdivision and transfers of less than the entirety of the eased land, making few if any exceptions to this prohibition. The ubiquity of these restrictions (referred to in this guide as “division restrictions”) reflects their profound importance for conservation, a topic addressed in the WeConservePA guide Subdivision and Transfer Restrictions in Grants of Conservation Easement.
In a handful of jurisdictions across the United States, litigants have targeted division restrictions with some version of the argument that perpetual division restrictions are an unreasonable restraint on landowner rights. These arguments have all proven fruitless, as courts have clearly discerned what easement grantees and grantors understand—that division restrictions are crucial to the conservation purposes and public benefits delivered by the easements.
No Pennsylvania appellate court has ruled specifically on a challenge to the enforcement of division restriction in a grant of conservation easement. Such challenges are unlikely in Pennsylvania, thanks to favorable common law principles, supplemented by Pennsylvania’s Conservation and Preservation Easements Act (and buttressed by conservation-friendly decisions in other states).
This guide offers a detailed basis for the clear enforceability of division restrictions in Pennsylvania, including an overview of failed legal challenges in other jurisdictions, the prevailing legal consensus (the Restatement approach), relevant principles of Pennsylvania common law, and special features of the Conservation and Preservation Easements Act.
Lawsuits in several states have challenged division restrictions in conservation easements on a number of theories. Most have involved some version of the claim that equitable common law principles disfavor unreasonable restraints on alienability (the ability to freely sell) of land. And while most states’ conservation easement enabling statutes affirmatively approve of conservation easement restrictions on land use, landowners have argued that limitations on division are different in kind to substantive use restrictions. Despite broad acknowledgment that division restrictions necessarily limit the rights of landowners to sell their property, courts have roundly rejected these claims, holding, among other things, that:
· Limitations on subdivision protect conservation values, just like substantive use restrictions.[1]
· State conservation easement enabling legislation demonstrates strong public policy in favor of conservation, displacing or refuting common law principles to the contrary.[2]
· Transfers of distinct pre-existing lots encumbered by the same easement may be blocked in the same manner as subdivisions first occurring after a conservation easement is granted.[3]
· Where a grant of conservation easement may be construed to permit subdivision at holder’s discretion, holder’s exercise of discretion in rejecting the subdivision is reasonable if it supports conservation values protected by the easement.[4]
· A laches defense to a holder’s enforcement of a division restriction (enforcement was delayed and therefore waived) may be prevented by a waiver of laches provision in a grant of conservation easement.[5]
· Whether a restraint on alienation is reasonable depends on the reason for the restraint; a restraint that actually advances a conservation purpose is reasonable.[6]
In general, courts have been persuaded that the robust public policy favoring conservation easements, as demonstrated by state easement enabling statutes, supports the enforcement of easement provisions that may have been treated with skepticism under common law principles—specifically including division restrictions.
The Restatement of Property, currently in its third edition, is a legal publication of the American Law Institute that distills a broad range of common law principles from the states into simplified and systematized legal rules. The Restatement is not binding law. It is a legal resource to courts and attorneys that offers a reasoned, consensus view. While no Pennsylvania appellate court has cited the current edition’s treatment of restraints on alienation, Restatements are frequently cited as persuasive authority by Pennsylvania courts in ruling on a wide range of matters.
The Restatement (Third) of Property draws a distinction between direct and indirect restraints on alienation. Direct restraints expressly restrict the ability of a landowner to sell land, such as a division restriction in a grant of conservation easement. Indirect restraints impair value or otherwise make it more difficult to sell property, such as the specific use restrictions of a conservation easement. According to the Restatement, direct restraints are “invalid if the restraint is unreasonable.” “Reasonableness is determined by weighing the utility of the restraint against the injurious consequences of enforcing the restraint.” Indirect restraints are presumed valid unless they “lack a rational basis.” This distinction reflects the idea that direct restraints should be held to a higher standard. The restatement leaves no room for doubt on how this principle applies to restraints created for conservation purposes:
The social utility of devoting property to conservation… purposes is strong enough to justify severe restraints on alienation that are reasonably necessary or convenient to assure that the property will be used to carry out the intended purposes. Restraints on alienation of conservation servitudes are… valid as a matter of common law so long as they are imposed to serve a conservation or other legitimate purpose and are rationally related to accomplishing that purpose.
Challenges to division restrictions in Pennsylvania are generally futile:
· First, because the established common law of Pennsylvania provides ample grounds to defend a restraint on alienation that is appropriately tuned to serve a compelling purpose.
· Second, because the Conservation and Preservation Easements Act supplements the common law framework by enshrining conservation as public policy of the Commonwealth.
The following legal analysis identifies the relevant contours of Pennsylvania law.
The weight of Pennsylvania caselaw supports the enforceability of division restrictions, notwithstanding the lack of appellate decisions evaluating them specifically.
Pennsylvania courts’ decisions have not reflected the Restatement’s clear delineation of direct and indirect restraints, tending instead to subject any covenant restricting the use of property (“restrictive covenants”) to a similar analysis. Any restrictive covenant may be construed as a restraint on alienation to the extent that it makes it more difficult sell land.[7]
The initial task of a Pennsylvania court when evaluating a challenge to a restrictive covenant is to determine the intention of the parties in light of the purpose and conditions giving rise to the restriction’s execution.[8] A number of common law principles affect this analysis. First, where the effect of a restrictive covenant is arguable, it will generally be construed against the party seeking to enforce it, preferencing the less restrictive interpretation.[9] Second, courts will not enforce restrictive covenants that amount to absolute or unreasonable restraints on alienation. However, “[a] limited and reasonable restraint on the power of alienation may be valid.”[10]
Whether a restraint is “limited and reasonable” depends on the facts,[11] including the purpose and extent of the restriction.[12] While courts disfavor perpetual restrictions,[13] they will enforce them where they continue to serve their intended beneficiaries, so long as they do not create a “far greater hardship” for the landowner they burden, or become “useless from the standpoint of any practical utility.”[14] Where the restrictions bar the “only reasonable use available for the property,” it will be difficult to justify the restraint.[15] For example, in Schulman v. Serrill, in sustaining the enforceability of a covenant restricting the variety and use of buildings on the affected parcel, the court focused, among other things, on weighing the hardship of the restriction on the affected landowner against the benefits to the neighboring landowners who benefited from the restrictions and sought their enforcement.[16] The court went on to explain that “[i]t is not inequitable to enforce a deed restriction merely because it bars the highest and best use, so long as this is not the only reasonable use available.”[17] This may be contrasted with situations in which restrictions were invalidated as unreasonable. For example, where a deed grantor restricted separate conveyance of a portion of the property in a manner that lacked an ongoing purpose or beneficiary.[18] In another, a restriction was invalidated that gave authority to a third party to accept or reject potential buyers for any reason, or no reason at all.[19]
While Pennsylvania caselaw does not clearly reflect the Restatement’s distinction between direct and indirect restraints, it does resemble the reasonableness and rationality inquiries of the Restatement tests—balancing the burden of the restriction against the purpose.
Were a Pennsylvania court to resolve a direct challenge to the enforceability of a conservation easement division restriction, guided only by its common law precedent, it would weigh the burden of the division restriction against the benefit to the holder of the easement—and, by extension—the broader public. Unlike the Pennsylvania cases, in which restraints on alienation were found unreasonable, the facts that would underlie nearly all conservation easement disputes in Pennsylvania support enforceability:
· The public benefits of a conservation division restriction are current and ongoing.
· The benefits to the easement holder—facilitated easement management, including enforcement—are current and ongoing (and ultimately benefit the public as well).
· The purpose of the restriction is generally stated on the face of the document creating it,[20] and the granting language leaves no room for arbitrariness or unpredictability.
· Division restrictions affect a specific subset of landowner rights; they do not eliminate all reasonable uses of the affected property.
In sum, the enforceability of a division restriction for conservation purposes has a strong foothold in common law.
In 2001, the Pennsylvania General Assembly passed the Conservation and Preservation Easements Act (the “CPEA”).[21] State laws like the CPEA are sometimes referred to as “enabling acts,” for the fact that they dispel a range of possible common law challenges to enforceability. This is something of a misnomer in Pennsylvania, as conservation easements were never held invalid interests under common law prior to the CPEA (and thus needed no “enabling”). However, the CPEA provides a resounding endorsement of conservation easements and a boon to their legal effect. For a more extensive explanation, see the Guide to the Conservation and Preservation Easements Act.
The CPEA has the explicit purpose of advancing the “public and economic benefit” of conservation easements, by protecting the “natural, historic, agricultural, open space and scenic resources of [the] Commonwealth.”[22] For the reasons discussed at greater length in the guide Subdivision and Transfer Restrictions in Grants of Conservation Easement, division restrictions support these precise benefits.
The CPEA defines a conservation easement by the effect of the limitations it contains, not by the specific type of limitation. A conservation easement is defined as “[a] nonpossessory interest of a holder in real property, whether appurtenant or in gross, imposing limitations, … the purposes of which include, but are not limited to, retaining or protecting for 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; [or] maintaining or enhancing land, air or water quality …”[23] Because division restrictions protect these precise conservation values, it would be difficult to distinguish them from any other limitation anticipated by the statute.
The CPEA explicitly refutes the common law principle disfavoring restraints on alienation that are perpetual in nature, explicitly affirming the perpetual nature of conservation easements. “[A] conservation easement… may be perpetual in duration….”[24] But the CPEA doesn't only permit perpetual conservation easements—it buttresses their perpetual nature with a provision requiring that an easement held by a dissolved entity be transferred to a successive holder or to the local municipality if no other suitable successive holder can be identified.[25] Accordingly, the CPEA dismisses any possible question under Pennsylvania common law about whether the perpetual nature of a division restriction (or any other restriction) within a conservation easement cuts against its enforceability.
The CPEA explicitly directs courts to apply principles of law and equity “consistent with the public policy of this act as stated under section 2 when the easement is broadly construed to effect that policy.”[26] The referenced section 2 then provides that “[c]onservation … easements shall be liberally construed in favor of the grants contained therein to effect the purposes of those easements and the policy and purpose of this act.”[27] Thus, the effect of any common law principle is subordinated to advancing the public policy of supporting conservation outcomes and the purposes of the CPEA.
The CPEA explicitly states that the owner of eased land retains “the right to transfer, encumber or otherwise alienate the real property, subject to applicable limitations, including any provision requiring notice to the holder, contained in the conservation or preservation easement.”[28] This clause illustrates clear legislative intent to specifically authorize direct limitations on alienability of eased land, necessarily including division restrictions, which were a garden variety provision of most (if not all) conservation easements recorded prior the CPEA’s enactment.
[1] Taylor v. Taylor, 110 N.E.3d 651, 654 (Ct. App. Ohio, 12th Dist. April 23, 2018).
[2] Dep’t of Agric. & Rural Dev. V. Engle (“Engle”) 999 N.W.2d 73 (Mich Ct. App. 2022).
[3] Stitzel v. State of Maryland, 6 A.3d 935 (2010).
[4] Buckley v. Greensboro Land Trust, Docket No. 139-7-98 (Orleans Sup. Ct., Vermont, April 5, 2000) (Unpublished).
[5] Engle, at 80.
[6] Engle, at 77.
[7] See Grossman v. Hill, 122 A.2d 69, 72 (Pa. 1956); Wells Fargo Bank N.A. 201 A.3d 1241 (2019). (finding that a restriction phrased as a limitation on “use” is effectively a restraint on alienation); Brouse v. Brouse, 281 A.3d 1098 (Pa. Super. Ct. 2022) (non-precedential decision) (holding that development restrictions may be “de facto perpetual restrains on alienation”); Restatement 3rd of Property: Servitudes, §3.4 (distinguishing direct and indirect restraints).
[8] Consolidation Coal Co. v. White, 875 A.2d 318, 326-27 (Pa. Super. 2005).
[9] Schulman v. Serrill, 432 A.2d 643, 646 (Pa. 1968).
[10] Lauderbaugh v. Williams, 186 A.2d 39, 41 (Pa. 1962).
[11] Ralston v. Ralston, 55 A.3d 736, 740 (Pa. Super. Ct. 2012).
[12] See Brouse.
[13] See Lauderbaugh at 41(the fact that a restriction is not limited in time “militates strongly against its enforcement”); See contra Wells Fargo Bank N.A. (relying heavily upon the perpetual nature of the restriction in finding it unenforceable; however, the restriction was a bare grantor restriction without a stated purpose, or an identifiable intended beneficiary).
[14] See Schulman at 647-48
[15] Brouse.
[16] Schulman at 647.
[17] Id.
[18] See Grossman.
[19] Lauderbaugh.
[20] The WeConservePA Model Grant of Conservation Easement and Declaration of Covenants, used by nearly all Pennsylvania land trusts (and many outside of the Commonwealth), states that the owner covenants (including subdivision restrictions at article 2) are “in furtherance of the Conservation Objectives.”
[21] 32 Pa. Stat. § 5051-5059.
[22] § 5052
[23] § 5053
[24] § 5054(d)
[25] Id.
[26] § 5055(c)(1)
[27] § 5055(c)(2)
[28] § 5508.
