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Donate an Easement on Your Historic House

Introduction to the Subject of Easements

You can think of property ownership as a bundle of sticks, each stick representing one of your rights. For instance, you have the right to sell the property, the right to use it peacefully, the right to develop it, the right to change its appearance, the right to demolish buildings on it. Exercising some of the rights can change others, or even trump them outright. And certain acts of public governance – such as zoning - can take precedence over your rights.

One of your legal privileges is that you may dismantle the bundle of rights and treat them individually. When you do so, that’s when the interaction of different rights comes into play. For instance, think about your right to change the appearance of your house. Suppose you separate out that right from the rest of the bundle, and transfer it to someone else. Then you can no longer change the way it looks – and certainly demolition would be a form of change.

This is the principle that makes an easement work. When you donate a façade easement to a non-profit organization, then the organization – and no longer you – has whatever right you give it. Usually the easement applies to the exterior façades, and it specifies that they may not be changed. So much for demolition. The easement is recorded with your deed at the courthouse, so that the information is publicly available.

Here’s how the process works in historic preservation:

The site must be listed on the National Register of Historic Places, either individually or as part of a district. You find a 501(c)(3) non-profit organization that is willing to hold the easement, and to police it regularly to check for violations of the easement terms. You hire a lawyer with experience in the area to draft the easement document, and then consult with the organization to make sure that you meet their requirements. The document constitutes a legal transfer of the particular property right(s) described in it. Because you are giving away part of your property value to a recognized charitable organization, you may take that piece of the value as a deduction from your federal income tax calculations. A qualified property assessor must certify the value. That’s one of the financial rewards for you, and you may take it right away once the transfer is made. The second benefit is that you may go, valuation in hand, to your local tax board and apply for a reduction in property taxes. The decision is theirs, of course. The third benefit, if you plan to hold the property till your death, is a reduction in its value in your estate.

These are formal financial benefits, but most people who donate easements do so because they love their homes, and want to be sure that they are community assets in perpetuity.

An easement is the safest form of protection for several reasons. First, there is someone whose job it is to make sure that the terms are met. Deed restrictions are often mentioned as another form of protection, but the weakness of those is that, although both easements and deed restrictions are recorded with the deed in the courthouse, usually no one has responsibility for implementing the deed restriction, and the only way to enforce it is to take the violator to court (if you have standing). The non-profit organization may also have to resort to court action, but there are many possible steps to take before that. An effective enforcing organization maintains relations with the current resident, and is known to them. Often moral suasion does the trick.

Easements are still the best protection for a historic property. The only legal process that trumps them is eminent domain.

The Trust would be happy to discuss with you the possibility of placing an easement on your house. It is not recommended that you consider making such a donation to an entity that is politically sensitive, even if they are currently sympathetic to the idea.

 

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