You might have seen or heard recent press related to the Campbell Ranch in Hotchkiss. This local cattle ranch, located on the floor of the North Fork Valley between Hotchkiss and Paonia, has been owned by the same family for over 100 years, and they are choosing to put 410 acres into a conservation easement.
What, exactly, does this mean?
In real estate terms, an “easement” is, at its most basic, one party’s interest in another party’s property. There are lots of different kinds of easements – we frequently hear about utility easements and shared driveway easements. These easements give rights to those OTHER than the property owner. Sometimes, these easements can affect the value of the property that is burdened by them.
A conservation easement, which is voluntarily placed on the property by its owner, preserves a property in a certain way. The word “conservation” means just that; its objectives can include protection of water rights, ecological and environmental qualities, wildlife and habitat, scenic views, forestry and sustainable agriculture. The point is to conserve the current use and qualities of the property. Another common purpose of a conservation easement is to prohibit a property from being developed or subdivided into parcels intended for different use (think: selling a farm to a developer who builds lots of houses on it). Conservation easements “run with the land” which means they are permanent and future owners of the property must comply with the easement.
Other reasons to put property into a conservation easement could include significant federal and state tax benefits with regard to the valuation of the property. As with many conservation easements, because the property can never be developed, over time its value could go DOWN, which could be helpful for estate planning. There is also the potential for a charitable contribution tax deduction as well.
Because of the complexity and permanence of creating a conservation easement, the owner works with a land trust business such as Colorado West Land Trust to plan and execute the easement, develop a management plan to maintain the property, and ensure the transaction will meet IRS and state tax requirements. Thousands of acres on the Western Slope have been placed into conservation easements. To read the story about the Campbell Ranch or other neighbors who have made this commitment, visit www.cowestlandtrust.org.
Published July 2022