Introduction to Preservation Easements
Preservation easements currently preserve thousands of historic
properties across the United States--from single-family dwellings,
complexes of buildings and nationally-significant historic landmarks to
rural villages, cultural landscapes, farms and farmland—and a wide
variety of resource types—from New England Cape Cod cottages to
Southwestern archaeological sites, from Kentucky horse farms to mid
twentieth-century Modernist houses in California. If conservation values
such as open space, designed landscapes, or other natural, scenic,
agricultural, or archaeological values are present on a historic site,
the preservation of these important features of properties should be
evaluated and considered for protection under a preservation easement as
Preservation easements are flexible tools; they can be crafted to
address the specific characteristics of a property, the property owner's
interests, and the mission, goals, and interests of the
easement-holding organization. In many instances, preservation easements
protect historic properties that are not under the purview of local
historic preservation laws, and in these instances, the preservation
easement may well be the only protection against demolition or
alteration of a property’s significant historic resources.
Protecting a historic property through the use of a preservation
easement can have numerous benefits, including peace of mind that a
cherished property is perpetually protected and in some cases, for
properties listed on the National Register of Historic Places
(individually or certified as a contributing property to a National
Register historic district), a federal income tax deduction.
Basic Information About Easements
An easement is a private, legal interest conveyed by a property owner to
a qualified preservation organization or government agency. The
donation of an easement is usually voluntary; once in place, however,
most easements are perpetual (that is they are permanent) and bind both
current and future owners to protect the historic character and values
of the property. On occasion, an easement may last for a defined period
of time (for examples, twenty or thirty years); this type of easement is
referred to as a "term" easement and is often a condition of
grant-funded projects on historic properties.
Legally, preservation easements are a "partial interest" in real
property: owners retain numerous rights to the property (for example,
the right to live in, use, maintain, sell, or give away) but transfer
other specific rights to the easement-holding organization. These
transferred rights protect a historic property from activities that
would be inconsistent with the preservation of the property, such as the
demolition or inappropriate alteration of historic buildings, or the
subdivision of surrounding land. Preservation easements also typically
protect against the deterioration of protected features by imposing
maintenance obligations on the property owner.
The use of preservation easements is supported by state and federal
preservation policies and laws that encourage public participation in
the preservation of America's historic resources by providing an
important economic incentive: property owners who donate qualified
preservation easements to qualified easement-holding organizations may
be eligible for a federal charitable tax deduction based on the value of
the preservation easement, as provided for in the standards set forth
by the Internal Revenue Service (IRS).
Frequently Asked Questions About Preservation Easements
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What is a Preservation Easement?
The term "preservation easement" is commonly used to describe a type
of conservation easement – that is, a private, legal arrangement between
a property owner and a qualified nonprofit organization or governmental
agency for the purpose of protecting a historic property's conservation
and preservation values. Preservation easements may also be referred to
as "preservation covenants" or "preservation restrictions" and the
terms are often used interchangeably. Conservation easements have long
been used to protect land that has open space (including farmland,
forest land, and land with scenic value), natural environmental value
(including natural habitat), outdoor recreational value, or land that
has historic, architectural, or archaeological significance.
Some easements last for a certain number of years (often referred to
as "term" easements), with the interests of the easement-holding
organization expiring at the end of the term. This type of easement is
commonly required to receive grant funding or financial assistance from
state or local governments or nonprofit organizations. Most
preservation easements, however, are perpetual (that is, permanent),
including any easements for which a donor plans to seek a federal income
The specific terms and requirements of an easement may vary depending
upon a particular state's laws, which are often referred to as a state’s
easement “enabling law.” Property owners and easement-holding
organizations are advised to work with professionals (attorneys, tax
advisors, and others) who are familiar with the state laws in which the
property is located.
What can preservation easements protect?
Preservation easements typically identify: (1) the physical features
of the property that will be preserved; (2) activities that could damage
or destroy significant historic or architectural features and thus are
prohibited; (3) activities that are permitted subject to the approval of
the easement-holding organization; (4) activities that are permitted by
the owner as a matter-of-right (with no oversight or involvement of the
easement holder); and (5) maintenance obligations that a property owner
must undertake. Preservation easements also address other issues,
including requirements for maintaining property insurance, providing
limited public access to the property, and steps the easement holder can
take to enforce the easement.
Preservation easements are as varied as the properties they protect.
At a minimum, most preservation easements protect the exterior
character-defining features of historic buildings; many also preserve
the historic setting of the protected buildings, sometimes including
natural as well as designed landscape features. Preservation easements
can also protect interior features of historic buildings. Finally,
preservation easements can also control (or, in some instances,
prohibit) additions to existing buildings or the construction of new
buildings and structures on the property.
Are preservation easements the same as façade easements?
The term “façade easement” is often used to describe a type of
preservation easement that only protects the exterior elevations (the
"façade") of a historic building (and often, only those elevations that
are visible from public ways). Typically, a "façade easement" refers to
an easement placed on a property, such as a row house, in a more densely
built urban environment. Exterior easements on properties in more rural
settings often cover not only the exterior "façades" (that is, all
elevations) of a historic building but also cover the land surrounding
the building, sometimes referred to as the building’s “context.”
Who accepts or “holds” preservation easements? What is a “qualified” easement holder?
Preservation easements are generally donated to (and then
subsequently referred to as "held by") either governmental agencies
(such as the State Historic Preservation Office or a city or town
through its local historic preservation commission) or by a nonprofit
organization with a mission focused on historic preservation and/or land
conservation. In order for an easement donor to qualify for federal tax
benefits, the organization to which they donate a preservation easement
must have (1) the preservation of historic places as a primary part of
its mission and (2) the resources to monitor and enforce its easements.
Many easement-holding organizations set aside easement endowments or
stewardship funds to ensure that the organization has a long-term
designated funding source for its easement obligations.
There are hundreds of organizations and governmental agencies across the
country that accept and administer preservation easements. Most
easement holders are based at the local level; however, state, regional
and national organizations hold preservation easements as well.
The National Trust strongly encourages donating easements to an
organization that has a well-established track record in historic
preservation and which is well-positioned to responsibly exercise a
long-term stewardship role in its easement holdings. To find qualified
easement holding organizations or agencies in your area, contact your
State Historic Preservation Office.
Are fees charged by easement-holding organizations? What is a "stewardship" fee? Are there other costs to the easement donor?
Most easement-holding organizations request – or may require – that
the donation of a preservation easement be accompanied by a one-time
financial donation to the easement-holding organization. Sometimes
referred to as a "stewardship fee" or "endowment contribution,” this
financial donation helps ensure that the easement-holding organization
will have the necessary resources to administer its preservation
easements, including routinely monitoring properties as well as legally
enforcing a preservation easement, if necessary. Whether described as a
fee or a contribution, this financial donation is considered by most
easement-holding organizations to be an integral part of the
preservation easement donation transaction. Donors wishing to seek a
charitable tax deduction for the financial portion of an easement
donation should seek the advice of a qualified attorney or tax advisor.
Easement-holding organizations use a variety of methods to calculate
the amount of money required to responsibly administer each preservation
easement they accept. There are a variety of ways that organizations
calculate easement stewardship fees, including (i) a "flat" fee; (ii) a
sliding scale with a cap; (iii) a percentage of the appraised value of
the preservation easement; (iv) a percentage of the property's value
prior to the easement donation; or (v) a capitalization model that
estimates the annual expenses needed to responsibly administer the
Easement donors are likely to incur some additional costs beyond the
stewardship fee or endowment contribution paid to the easement-holding
organization. These additional costs include fees charged by attorneys,
appraisers, and perhaps tax advisors; banks will occasionally charge
fees for executing mortgage subordination agreements (for properties on
which there is a mortgage). In all cases, donors are encouraged to seek
the advice of qualified legal counsel and tax advisors if they are
contemplating donating preservation easements.
What constitutes the "baseline documentation" referred to in a preservation easement?
"Baseline documentation" refers to the photographs, site plans, floor
plans, and any other material that is incorporated into the
preservation easement to document the scope of the preservation
easement's protection and the existing conditions of the property and
protected features at the time of the easement donation.
If a historic property is already protected by a local preservation
law (or is a contributing property within a locally regulated historic
district), would preserving the property with an easement be redundant?
Preservation easements and local historic preservation laws are two
distinct legal tools. Easements use private legal rights of property
owners to protect historic properties; local laws (or ordinances) use
governmental regulatory powers.
Preservation easements can be granted on properties already subject
to local historic preservation laws; if the local preservation law is
weak and the preservation easement is strong, the easement may provide
more protection than the local law. A local law may, for example,
authorize a municipality to delay but not prohibit demolition of a
historic property, while a preservation easement protecting that same
historic property may absolutely prohibit demolition of buildings on the
property. And even in the case of a strong local preservation law, an
easement may include terms that go beyond those protections offered by
the local law. For example, preservation easements can protect interior
architectural features or, in some cases, may require public access or
visitation to the protected property, provisions that are rarely
included in local preservation laws. Further, a preservation easement
may prohibit the property’s subdivision (or limit some other development
right) into what might otherwise be buildable lots under a community's
local zoning laws.
Where a preservation easement imposes conditions that are
substantially similar to the local preservation laws, the easement may
still provide substantial public benefit. Although local preservation
laws have rarely been repealed or overturned in their entirety, the
historic designation of individual properties – or even entire historic
districts – could be (and in rare instances, has been) withdrawn by a
municipality facing a threat or court challenge by a property owner or
developer, or through being unduly persuaded by less preservation-minded
or politically powerful forces. Even strong local preservation laws
often include variance provisions, exceptions for cases of economic
hardship or "special merit" – regulatory loopholes that are occasionally
utilized by the owners of historic properties to allow development that
would not otherwise be permitted under the local preservation law. In
cases like this, preservation easements serve as an important supplement
to the local preservation laws.
Are there federal tax benefits for an easement donation?
Property owners donating "qualified" conservation or preservation
easements to a "qualified" easement-holding organization, under the
regulations set forth in 170(h) of the Internal Revenue Code, may be
eligible for a federal income tax deduction. The complexities of the
federal tax code and the applicable IRS regulations are beyond the scope
of this summary; however, this document contains some of the key
provisions applicable to easement donations. Prospective donors are
strongly advised to seek the advice of an attorney, tax advisor, and
other professionals with experience in these areas.
Does the National Trust hold easements?
The National Trust strongly encourages regional, state, and local
easement-holding groups to hold the preservation easements in their
area. Under certain circumstances, the National Trust will accept
easements on National Historic Landmark properties or other highly
significant historic sites.
Does the National Trust have a sample preservation easement available?
A sample preservation easement is available by request via email. Contact us at email@example.com.
I've heard that easements are under scrutiny by the IRS. Should I be concerned?
The IRS continues to actively audit, and in some cases litigate, in
Tax Court and Federal Court, a number of easement donations. For more
information, go to: www.irs.gov/Charities-&-Non-Profits/Conservation-Easements.
Where can I get more information about preservation easements?
Many easement-holding organizations have comprehensive information
available on the internet or through publications available for
purchase. The following sources address issues related to preservation
- Establishing an Easement Program to Protect Historic, Scenic, and Natural Resources is an information booklet that provides practical
advice on legal and administrative issues for organizations interested
in establishing an easement program.
Appraising Conservation and Historic Preservation Easements is an
up-to-date guide on appraising land conservation and historic
- The Land Trust Alliance has extensive resources on conservation
easements, and while the Alliance serves as a source of information and
assistance to land trust organizations, much of that information is also
relevant to preservation easements. The Alliance has a range of
excellent publications on conservation and preservation topics including
the Conservation Easement Handbook (with contributions by the National
Trust for Historic Preservation) as well as a comprehensive set of
"Standards and Practices" for land trusts, which the National Trust
strongly recommends to organizations that currently hold (or intend to
hold) preservation easements.
The National Park Service also produces information and materials on the
subject of preservation easements, readily accessible on the internet