§ 14.8 - Duration and Termination of Conservation Easements

• Jurisdiction: Washington

§14.8 DURATION AND TERMINATION OF CONSERVATION EASEMENTS

This section discusses how and when a conservation easement may terminate.

(1) Duration

There is no state law specifying a minimum term for conservation easements. Consequently, the extent and duration of an easement will be determined from the terms of the grant. Zobrist v. Culp, 95 Wn.2d 556, 561, 627 P.2d 1308 (1981). Perpetual easements will be enforced. City of Seattle v. Nazarenus, 60 Wn.2d 657, 374 P.2d 1014 (1962).

Federal law allows income tax deductions only for conservation easements granted in perpetuity. Treas. Reg. § 1.170A-14(g). See §14.4(5)(d). A conservation easement not in perpetuity also would not be considered in calculating the taxable value of an estate, thus potentially resulting in higher estate taxes. Treas. Reg. § 25.2703-1(a)(4). See §14.4(4). Further, conservation easements with less than perpetual terms typically would not provide long-term protection and, thus, potential recipients generally would be less interested in such easements.

(2) Eminent domain

Generally, nothing should prevent a government agency acting under proper eminent domain authority from condemning either an existing conservation easement or property encumbered by a conservation easement. State ex rel. Polson Logging Co. v. Superior Court, 11 Wn.2d 545, 555, 119 P.2d 694 (1941) (easement subject to condemnation). See Volume 4, Chapter 13 (Eminent Domain), of this deskbook. As a holder of a real property interest, an easement grantee would be entitled to just compensation if its easement were taken through eminent domain. Wash. Const. art. I, § 16 (amend. 9); Lange v. State, 86 Wn.2d 585, 589-90, 547 P.2d 282 (1976).

Practice Tip: Giving a partial interest in land to one government agency may serve to protect the entire property from eminent domain. One property owner in Texas was able to avoid condemnation by a state agency by having previously conveyed a conservation easement to a federal agency. Sabine River Auth. v. U.S. Dep't of Interior, 951 F.2d 669, 673 (5th Cir.), cert. denied 506 U.S. 823 (1992); see also Minn. v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235 (1939) (states do not have authority to take property held by the United States without Congressional consent).

The more significant eminent domain issue with conservation easements is the allocation of condemnation proceeds between the fee holder and the easement holder. The federal tax code requires a proportional allocation of proceeds if an easement is extinguished because of changed conditions, which may include condemnation actions, unless state law provides otherwise. Treas. Reg. § 1.170A-14(g)(6). The federal tax regulations do not address the division of proceeds in the event of a condemnation of land subject to a conservation easement, and there is very little state authority on this point. See Hartford Nat'l Bank & Trust Co. v. Redevelopment Agency of City of Bristol, 164 Conn. 337, 321 A.2d 469 (1973); Schwartz v. State, 95 Misc.2d 525, aff'd, 426 N.Y.S.2d 100, 72 A.D.2d 490 (1980). Conservation easements often...