What is a Land Protection Agreement?
A land protection agreement is a voluntary legal agreement a landowner makes to restrict the amount and type of future development and use of his or her property. The landowner maintains the title to the property, but transfers certain property rights, such as the right to subdivide, to a nonprofit conservation organization. The sale or donation of a land protection agreement does not require the landowner to provide access to the public. A land protection agreement is tailored to the property and the needs of the individual landowner. They are written into the deed and “run with the land” so that all subsequent property owners are bound by the terms of the land protection agreement. MMF will take on the permanent responsibility and legal right to enforce the terms of the land protection agreement.
What are the Benefits of a Land Protection Agreement?
Landowners may opt for land protection agreements for both personal and economic reasons. A land protection agreement keeps the property in private hands and provides cash payment and/or tax benefits to the donor for protecting scenic, natural and agricultural resources. The sale, donation or “bargain sale” of a land protection agreement to a qualified organization may qualify the seller/donor for tax benefits, including income tax deductions, and reductions in property and estate taxes. The amount and type of tax benefits depends on a variety of factors, including the value of the donation, the income level of the landowner, and the total amount of the estate. Landowners should always consult with a financial advisor and/or an attorney to fully understand the tax implications.
What is the Value of a Land Protection Agreement?
The value of a land protection agreement is the difference between the property’s values before the land protection agreement is in place and after it has taken effect. For example, a farmer’s 200-acre ranch is valued at $1,000,000 before a land protection agreement is in place. The land protection agreement transfers the property’s development rights reducing the value to $500,000. Therefore, the land protection agreement value is $500,000 or the difference between the “before land protection agreement” and “after land protection agreement” value. Land protection agreement values vary widely depending on the value and extent of the rights that are conveyed. A certified appraiser will be hired to complete an independent appraisal of each land protection agreement.
How do I determine if a land protection agreement is the right choice for me?
First, contact Middle Mountain Foundation to discuss your interest in a land protection agreement. If you decide to proceed, the terms of the land protection agreement will be negotiated between the landowner and Middle Mountain Foundation. Next, an independent appraiser will be hired to determine the value of the property. If agreement is reached on the purchase price, Middle Mountain Foundation will sign a one-year option with the landowner. Over the course of the option period, funding will be secured to purchase the land protection agreement. Funding for land protection agreement purchases is anticipated from several private and public sources.