Easement Sales & Bargain Sales
Some landowners need financial assistance to protect their land. In such situations, easement sales or bargain sales can be viable options.
In a sale, a landowner sells the easement value (definition below) to a conservation organization. When the conservation easement is signed, the landowner gets a check for the easement value.
In a bargain sale, a landowner sells the easement at a price lower than its appraised value. This choice is a hybrid between a sale and a donation. It reduces the cost for the conservation organization, provides a financial benefit to the landowner, and allows the landowner to receive tax benefits for the donated portion of the easement. (See “Donating an Easement”).
For sale and bargain sale projects, Cacapon & Lost Rivers Land Trust seeks grant funds to make the purchases.
What is Easement Value?
Because land protected by an easement can no longer be subdivided or developed to the extent it could before the easement, its market value is usually less. Easement value is the difference between the market value of a property before the easement and the value of a property after the easement. Put another way, it is the value of the development rights “given up” in the easement.
EXAMPLE:
- Fair market value of the property without the easement (“before”) = $300,000
- Fair market value of the property with the easement (“after”) = $120,000
- Easement value = $180,000
Easement value is determined by an independent, specially qualified appraiser. It tends to range from 20-60% of a property’s fair market value and depends on the property’s location, ease of being developed, value of nearby lands, and other factors.