What is an easement? It is often defined as giving someone other than the property owner the right to use the property (or a portion of the property) without actually owning or possessing the property. For example, you own property by a lake, and I own adjoining property by a road. The only way you can get to the road is through my land. You have an easement by necessity to cross my property to get to the road.
Public utilities have their pipes and conduits running under my land. They have an easement — recorded on local land records — allowing them to access my property in order to make repairs or correct problems.
Oversimplified, an easement is a restriction on your use of your property. A conservation easement (often called a facade or preservation easement) means that a deed of easement to your property is given to a legitimate conservation organization, and as a result, you are restricted from making changes to the exterior of the house without first obtaining permission from the organization that holds the easement.
Why do homeowners consider granting such an easement, thereby placing significant restrictions on what they can do with their house in the future? There are two basic reasons.
First, you want to preserve the historic nature of your house — and your neighborhood. You are troubled with the many buildings — condominiums or commercial — that are popping up all over your area, and you want to do your part to protect the architectural integrity of your house. Second, if you do it right, you may get some tax benefits.
How does it work? You must make arrangements with a qualified, legitimate organization that accepts such easements. According to the IRS, a qualified organization is either a governmental unit, a publicly supported charitable, religious, scientific, literary organization, or “an organization that is controlled by, and operated for the exclusive benefit of a governmental unit or a publicly supported charity.”
Several years ago, The Washington Post published a series of articles about many “fly-by-night” organizations claiming they could assist homeowners with these easements. It turned out those groups were interested only in taking consumers’ money, and were not qualified to accept easements. Congress tightened the law and now the IRS will carefully scrutinize any tax return that contains a credit for the easement.
The L’Enfant Trust — a recognized and reputable organization in the Washington metropolitan area — points out in its Web site: “Be careful about promoters who steer you to a particular easement holding group, and make sure you find out how and by whom the promoter is paid.”