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A conservation easement may have one or more holders responsible for upholding the easement’s conservation objectives. It may have a beneficiary, an entity with some rights to manage the easement in furtherance of the conservation objectives but no responsibility to do so. It may also provide a contingency plan to replace a holder in the event the holder cannot or will not perform its duties. Effective long-term easement management requires that when more than one entity shares easement management rights, the relationship between the entities must be carefully delineated.
By its nature, every conservation easement needs an easement holder—a land trust or government unit that, in accepting the grant of an easement, takes responsibility for proper easement management. Not everyone seeking to conserve a property needs to be an easement holder to assure that their interests, and the conservation objectives of the easement, will be met. The interests of a funder or other crucial conservation partner often may be protected by making them an easement beneficiary or backup grantee; the relationship between holder and beneficiary or backup grantee may be simpler to manage, more cost-effective and less prone to misunderstandings than the alternative of having each partner serve as a holder. If, however, there is a compelling reason to grant the easement to more than one holder, the holders need to carefully consider and arrange how they will interact with one another to fulfill their easement management responsibilities.
Land conservation is based on relationships, the most important being the relationship of the landowner to the land. Quoting Aldo Leopold, “when land does well for its owner, and the owner does well by his land; when both end up better by reason of their partnership, we have conservation.1
A grant of conservation easement seeks to shape a healthy landowner-land relationship, and it expands the relationship to include the easement grantee (called the “easement holder” in this guide). Some grants expand this relationship further, extending certain easement rights and benefits to easement beneficiaries or backup grantees.
This guide examines these relationships and easement management2 roles:
The grantee of a conservation easement is called a holder for good reason. The grant of conservation easement conveys a real property interest in the eased land to see that the land’s conservation values are maintained. The holder of this interest holds the power to block uses of the eased land inconsistent with the conservation objectives of the easement. The conservation easement is a vested interest, which means it cannot be taken away by anyone else.5 It is a present interest, not a future interest triggered by a contingency.6 It exists as a powerful asset of the holder from the moment the grant of easement is signed and delivered.
Simply holding the power to block land uses inconsistent with conservation purposes is not enough; the conservation easement must be managed on an ongoing basis to maintain its viability and effectiveness. Easement management responsibilities, whether dictated by the terms of the grant or by the operation of the law, typically include the duty to monitor the eased property; to keep permanent records of changes in the eased property from baseline documentation; to respond to landowner requests to determine whether a proposed activity is inconsistent with the grant or to interpret the grant covenants as applied to changed circumstances; to review landowner plans and make recommendations to further the conservation purposes of the easement; to consider whether changes to grant covenants further the conservation purposes of the easement; and, when a land use occurs or is threatened that is inconsistent with the conservation purposes of the conservation easement, to wield the power to block it.
From the moment a grant of conservation easement is signed, the easement holder enters into a relationship not only with the landowners granting the easement but with all of their successor owners extending indefinitely through time. The covenants within the grant are the foundation for the holder-landowner relationship as discussed below.
Land ownership is sometimes described as a bundle of sticks because it can be divided into many different interests running concurrently in the same land. One stick might be the right to build a house; another stick—the right to take timber; another—the right of access via an easement; still another—the right to possession via a lease.
Whenever land ownership is broken apart into concurrent interests in the same land, the holders of these interests typically enter into covenants to sort out potential sources of conflict and misunderstandings. For example, leases as a rule explain what changes may or may not be made to the leased premises. Documenting this understanding protects both landlord and tenant by setting clear limits on each of their interests.
The covenants in a grant of conservation easement serve a similar purpose. Clarity as to the sorts of changes to the eased property that are, or are not, consistent with the conservation objectives of the easement protects both landowners and easement holder. The clarity delivered by the covenants promotes harmony and eliminates sources of discord based upon mistaken assumptions.
The covenants establish a framework for mutual participation by landowners and the holder in key decisions affecting natural and scenic resources within the property. The rights of review and approval granted to the holder over certain proposed changes open the door to a dialogue between holder and landowners as to whether a change would be consistent with or contrary to the conservation objectives of the easement. The covenant relationship with the easement holder affords landowners the opportunity to call on the holder to interpret the terms of the grant in light of new circumstances and, in some cases, to provide other assistance pertaining to resource management issues.
Having multiple holders for a single easement risks confusion or even conflict in the management of the easement. This and the extra costs of redundant management generally make it preferable to avoid multiple holder situations. However, the demands of project funders or other considerations sometimes necessitate having multiple holders. In these cases, the potential for management problems may be minimized if the holders carefully and explicitly set forth their expectations and define their relationship.
The term “Holder Agreement” means, for purposes of this guide, a written document evidencing a meeting of the minds among multiple holders as to how easement management responsibilities will be handled. The content of a Holder Agreement will vary depending upon the relationship of the holders. The core issues to be addressed in the Holder Agreement, regardless of the specific relationship, are outlined in the “Independent Easement Holders” section below. The Principal-Agent Easement Holders and Partnering Easement Holders sections that follow identify additional issues that should be addressed with those relationships.
Standard 8, Practice J of Land Trust Standards and Practices states the following:
If engaging in a partnership on a joint acquisition or long-term stewardship project, agreements are documented in writing to clarify, as appropriate, the goals of the project, roles and responsibilities of each party, legal and financial arrangements, communications to the public and between parties, and public acknowledgement of each partner’s role in the project.
Holders may use the grant of conservation easement to document their arrangements but, if they do, they need to exercise caution for the following reasons:
The Holder Agreement is a contract between the holders. Unless there is a specific reason to give future landowners or other persons notice of one or more of its provisions, there is no need to record.
The discussion below of issues to be addressed in different types of Holder Agreements notes, as to specific issues, the reasons why recorded notice of those provisions may be appropriate.
The arrangements among easement holders need not fall entirely into one category or the other for all easement administration tasks. For example, easement holders may have an understanding that they will act independently of each other except that one holder will act as agent for the other if an easement enforcement action is required.
The status of independent easement holders is the default if the easement holders do not form any other relationship, intentionally or not. Absent an agreement otherwise, multiple owners or holders of an interest in real estate have no implied duty to cooperate with each other, share any responsibilities or communicate with one another.8
As to routine administrative tasks (monitoring and recordkeeping), performing independently may not be particularly burdensome on the easement holders or the landowner. That is not always the case when key decisions must be made.
Example: A conservation easement is granted to Holder A and Holder B. They each perform their own monitoring and recordkeeping. A proposal is submitted to each for an improvement permitted under the grant subject to review and approval. Holder A notifies landowner of its finding that the improvement is consistent with easement objectives and, thus, is approved. Holder B notifies landowner of its disapproval. Each submits a separate bill to landowner for the costs of review.
Holder A may be exercising its review responsibilities in good faith but to no avail because, as a practical matter, Holder B has a veto power over Holder A’s decision; likewise, the reverse. The landowner is, understandably, confused and dismayed to find that the easement holders have no obligation to (at the very least) discuss their concerns with each other.
As is evident from the above example, easement holders (even independent ones) must work together on certain key decisions for the easement to be managed in a reasonable and efficient manner. A Holder Agreement may be used to set a protocol to be followed when critical decisions need to be made. Some of the issues that may be addressed in a Holder Agreement between independent holders are as follows:
Ideally an organization will not become an easement holder unless it is fully willing and able to manage the easement. If it is not willing and able, but needs the right to intervene in certain circumstances to protect its conservation interests, it will instead be better served by becoming an easement beneficiary, as described later in this guide. However, there are instances in which the requirements of a project funder necessitate a unit of government or another organization to be named as an easement holder, whether or not it intends to actively participate in easement management. In such cases, that holder often turns to the other holder to manage the easement. After all, if one holder is investing its time and resources into easement management on its own account, why not let that holder perform for both holders? Seems simple and straightforward but, as discussed below, both holders need to be aware of unintended consequences and potential pitfalls.
An easement holder managing an easement for itself alone answers only to its own governing board. An easement holder managing an easement both for itself and another holder answers to its own governing board and, in its capacity as manager holder, answers to the other holder as well. What legal and ethical concerns must the manager holder consider in taking on this dual role? What about the non-manager holder? Does the law reward its passive approach and let the other holder shoulder all of the burdens? To find the answers to these questions under applicable law, the first step is to categorize the relationship. The category that most closely fits the “one holder providing services for both” scenario is the law of agency. The manager holder is providing easement management services both for itself and as agent for the other holder (its client or, using legal terminology, its principal).
The principal-agent relationship does not alter the independence of each holder and the separate responsibilities of each holder. Each holder remains at all times an independent actor retaining full right and power to act on behalf of itself.
The principal-agent relationship lasts only for so long as neither holder terminates it; in other words, it is terminable at will. The Holder Agreement may provide for a minimum term or a notice period before termination is effective but, in general, both holders are free to go their separate ways. Neither has made any long-term commitment to the other to take actions or make decisions together, not separately. This is a key feature that distinguishes the principal agent relationship from the partnering arrangement discussed below.
The trickiest aspect of the principal-agent relationship is that the parties may form the relationship without realizing or intending it. An agency may be created by implication or course of conduct.
Example: The Township is legally bound by ordinance to be holder of any easement it acquires with municipal funds; however, the Township does not have the staff or the expertise to provide easement management services on a regular basis. The Township sees that it can avoid the burden of management yet still achieve conservation by relying on a second holder, the Land Trust. Over the ensuing years, the Township relies upon the Land Trust to perform all easement management; the Land Trust has assumed the role of easement manager; and the landowners have come to rely upon the Land Trust in that capacity.
In the above example, the Land Trust is managing the easement on behalf of itself as well as the Township; thus, whether or not they enter into a formal agreement, a court is likely to resolve issues pertaining to their easement management responsibilities by applying the legal rules governing a principal-agent relationship.
When the legal rules applicable to agency are applied to an informally created principal-agent relationship, the parties may be surprised by the unintended consequences and pitfalls, for example one holder’s ability to bind the other to a decision or for one holder to be liable for the actions of the other. These surprises may be avoided by good planning and formalizing the relationship with an appropriate Holder Agreement.
Under the legal rules applicable to agency, the agent is authorized to act on behalf of its principal. This rule protects those who reasonably rely upon an agent’s apparent authority. In the above example, the landowners have become accustomed to dealing solely with the Land Trust on easement management issues; thus, it may be reasonable for them to rely upon the Land Trust’s apparent authority for all easement management issues. If the Township expects to retain its right to approve certain critical management decisions, it needs to make that clear to the Land Trust and landowners.
One of the pitfalls of agency is that, as a legal matter, responsibility always remains with the principal – it never shifts to the agent. Thus, in the above example, regardless of the relative knowledge and experience of each, the Township is viewed as controlling the acts of its agent, the Land Trust, including the negligent or wrongful acts of its employees acting in the course of the agency. An indemnity provision in a Holder Agreement, and adequate liability insurance coverage, will help to mitigate these consequences. But the easement holder who allows an agency relationship to be formed by course of conduct may not realize that it is at risk for the acts and omissions of employees of the other holder.
The agent has a duty of loyalty to its principal, which means that the agent must act in the best interests of the principal rather than its own interest. As applied to the above example, this is not a problem so long as both Township and Land Trust are in accord on easement management decisions. But, if not, the Land Trust will find itself in a predicament:
Example: Same facts as above but, upon reporting a potential easement violation to the Township, the Township demands that the Land Trust commence immediate legal action because it is in the Township’s best interests to avoid the public perception that easements are not strictly enforced. Upon further investigation, the Land Trust concludes that there is no immediate danger to natural or scenic resources and that the Land Trust’s mission is furthered by working with the landowners to implement a mitigation plan that will not only restore but enhance resource values of the eased property.
What is the appropriate path for the Land Trust? As agent for the Township, it cannot decline to follow the Township’s directions without breaching its duty of loyalty. On the other hand, if the Land Trust follows the Township’s directions, even though not considered a prudent course of action by the Land Trust board, then the Land Trust violates its duty to act in the best interests of its own organization. Thus, any Holder Agreement for principal-agent holders that sets a mandatory term of commitment must also make it clear that if conflict occurs (and is not timely resolved), the manager holder has the right to withdraw from the relationship and act only in its own best interests.
The above discussion suggests that if a principal-agent relationship is desired or inevitable, a Holder Agreement tailored to address key matters is strongly advisable. It is also advisable to formalize and clarify a relationship that has already developed informally. Key issues pertinent to the principal-agent relationship include the following:
Easement holders may form a partnering relationship for a single project (similar to a joint venture in a business context) or may come to form it for a series of projects (similar to a partnership in a business context). The essence of a partnering relationship is that it is a long-term commitment to manage one or more easements together, not separately.
Partnering has a number of advantages for holders interested in forming a long-term relationship for easement management purposes:
The association of partnering holders may be informal (whether or not documented by a Holder Agreement) or, if the partners elect, may be formalized as a separate legal entity.16
The partnering holders may give their association a separate name. For example, the easement grantee may be identified as AB Greenway, an association of A Land Trust and B Land Trust. Public notice of the name is given by filing with the Corporation Bureau of the Pennsylvania Department of State17.
Whether or not under a separate name, a tax identification number for the association may be obtained to facilitate opening deposit accounts for stewardship and other funding held as partners.
As a general rule, either partnering holder may enter into binding commitments on behalf of the association. For that reason, the Holder Agreement must identify the key decisions that require the consent of both easement holders to be effective. Landowners need to know this as well; otherwise, either holder may appear to have the authority to bind the association and landowners will be protected if they rely on that authority and their reliance is reasonable under the circumstances18
Easement holders considering a partnering arrangement must be candid with one another about their expectations and how they will unwind their association if those expectations are not met. No one wants to dampen enthusiasm about initiating an exciting collaboration but forever is a long time. Most likely at some point, one easement holder will no longer be willing or able to bear its share of the burdens of easement management. Addressing that eventuality upfront will assure both that there is a fair and orderly path to handle it when it occurs.
The issues arising in a partnering arrangement in a conservation context are much the same as in a business context.
An “easement beneficiary” holds some or all the rights of an easement holder but is not burdened with the easement management obligations of a holder. Making an entity an easement beneficiary is often a practical alternative to having multiple holders. The easement beneficiary, though not a signatory to the grant, has a protected interest in the conservation easement.
The grant of conservation easement may provide one or more rights to an easement beneficiary in accordance with the needs and wishes of those involved with the easement transaction. These rights are called “third-party rights of enforcement” under Pennsylvania law.20 Rights might include:
The rights may be written to apply to all the land subject to the easement or just a portion if that portion is all that is of interest to the easement beneficiary. For example, a local municipality may financially support the placement of an easement on woods adjacent to the local park and thus want to have some beneficiary rights regarding those woods but may be utterly indifferent to the contiguous farmland to be conserved with the same easement.
There are a number of distinct advantages afforded by the role of easement beneficiary.
Unlike easement holders, easement beneficiaries are not responsible for long-term easement management. They are not even responsible for overseeing long-term easement management.
Easement beneficiaries are not responsible for the negligent or wrongful acts or omissions of holders.
Easement beneficiaries are recognized under Pennsylvania law as having the right to commence an action affecting a conservation easement without the approval of anyone else.21 Unless otherwise modified in the grant or other agreement with the easement holder, they may take action as and when they consider it necessary or advisable to protect their interests, as described in the grant of easement, from easement mismanagement.
There are pragmatic reasons for the parties planning a conservation easement to establish easement beneficiaries rather than multiple easement holders:
The easement beneficiary may act independently to exercise its third party enforcement rights without consulting with the easement holder. The potential for precipitous action without notice is a legitimate concern for the easement holder. The holder will want to establish a protocol with the easement beneficiary that affords an opportunity for the holder to discuss concerns with the easement beneficiary and perhaps agree upon a mutually satisfactory course of action. In this respect, the relationship between the easement beneficiary and the easement holder is much like the relationship between two independent easement holders and the core issues to discuss and reach an accord upon are also similar.
The commentary to the Model Grant of Conservation Easement (published by the Pennsylvania Land Trust Association) includes provisions for identifying easement beneficiaries and their respective rights.
What happens if a holder ceases to function or fails to provide appropriate management (including enforcement) of a conservation easement?
The parties to a grant of conservation easement sometimes address this concern by identifying a “backup grantee”, a public entity or land trust recognized by the parties to the grant as being an appropriate replacement if the easement holder is no longer performing its easement management responsibilities.
This backup grantee strategy involves grafting into the grant of conservation easement a kind of contingency plan to ensure continued and proper management of the easement. But how does the contingency plan work? Several strategies are available:
A. Provide an automatic shift to the backup grantee in the event the easement holder fails in its duties;
B. Make a recommendation to the court as to a suitable substitute holder in the event that the court finds itself giving an order for a transfer; or
C. Authorize an organization to monitor the easement holder’s performance and petition the court to order a transfer of the easement if the performance is inadequate.
A grant of conservation easement may be written to provide an automatic shift of ownership of the easement if the easement holder fails in its duties.
A deed of real property to one owner (Owner A) may be made upon condition that, if a certain occurrence happens, title will shift to another owner (Owner B). Owner A enjoys total ownership until such time (if ever) as the triggering event occurs; then title automatically shifts to Owner B, the holder of the future interest. The technical term for this is a shifting executory interest.
If the understanding of the parties is that the backup grantee is to hold an executory interest,23 then the granting clause of the easement must convey both the present (but limited) interest to the easement holder and the future (executory) interest to the backup grantee as in the following example
Landowners grant and convey a conservation easement on the premises to Land Trust A but if Land Trust A ceases to exist or fails to enforce this conservation easement, then to Land Trust B.
The advantage of the shifting executory interest approach is that it is automatic and needs no court intervention; however, there are some significant concerns for both the present easement holder, Land Trust A, and the future successive holder, Land Trust B:
A grant of conservation easement may be written to recommend to a court the identity of a substitute holder – the backup grantee – in the event a court finds itself giving an order for a transfer of the easement.
Section 6.01 of the Model Grant of Conservation Easement states that:
If Holder fails to enforce the terms of this Grant, or ceases to qualify as a Qualified Organization, then the Conservation Easement may be transferred to another Qualified Organization by a court of competent jurisdiction.
The model does not identify a particular Qualified Organization because a court exercising its jurisdiction over the disposition of a charitable asset, such as a conservation easement, has complete authority to decide (at the time the issue arises) whether one organization or another is best suited to manage the easement appropriately. The model provision could be modified, however, to make a recommendation to the court but it would be just that – a recommendation. For example, the following sentence could be appended to the provision:
In this event, the undersigned Owner or Owners and Holder recommend that the court transfer the Conservation Easement to [name of Qualified Organization] because of the close match between the Conservation Objectives and the mission and work of [name of Qualified Organization].
With this approach, the naming of a particular backup grantee serves an informational purpose. If the easement held by a non-performing easement holder is to be transferred by order of a court of competent jurisdiction exercising cy pres jurisdiction, the court will decide whether the backup grantee is a suitable substitute to further the purposes of the conservation easement.
If the identification of the backup grantee is merely informational for the court, the named backup grantee is a non-party to the transaction and has no interest at all in the conservation easement. It has no more rights regarding the conservation easement than if it were not named at all. (If it is desired for the backup grantee to have one or more rights, then the grant could be written to provide it rights as an easement beneficiary.)
The grant of conservation easement may be written to identify an organization whose role is to monitor the performance of the easement holder and, if it finds the holder defunct or non-performing, to petition the court to remove the easement holder and order the transfer to a substitute easement holder who will enforce the easement. (If a need to petition the court arises, the petitioner may propose itself as the substitute easement holder; also, the grant of easement may be written to identify an organization as both the petitioner and the recommended substitute easement holder.)
The monitor role serves a useful purpose because, otherwise, the typical backup grantee provision is missing a key piece of information: who has the right (other than the state attorney general) to request the court to replace the easement holder?
Any citizen may ask the state attorney general to investigate an alleged dereliction of duty in the management of charitable assets. If the attorney general determines that court action to replace the holder is necessary and appropriate, the court must allow the attorney general the opportunity to present the case. The attorney general has what is called “standing“.
A grant of conservation easement may name an organization to monitor holder’s performance and, if it finds a dereliction of duty, petition a court to transfer the easement to another. However, courts are not bound by private agreements. The court will judge for itself whether the organization has a sufficient connection to the conservation easement to be allowed standing to present its case for replacement of the holder. And what will be allowed in one state will not necessarily be allowed in another.
In Pennsylvania, only the state attorney general has standing to commence an action to remove the existing holder for failure to enforce the conservation easement or to enforce the easement itself.24 The backup grantee, just like almost everyone else, must seek the assistance of the Office of the Attorney General to petition the county orphan’s court for removal and replacement of the easement holder. The rationale for this rule is that a neutral arbiter, the Office of the Attorney General, decides in the first instance whether or not evidence brought to its attention, and any further investigation on its part, supports a finding of non-performance on the part of the easement holder.
Sometimes land trusts are named as backup grantees without their knowledge or consent. Even those who consent to be named in the grant may not be willing to assume responsibility for a conservation easement without first inquiring into the facts and circumstances: What is the status of the conservation easement, the baseline documentation and the records evidencing performance of easement management responsibilities? What stewardship funding is available to offset the burden of easement management?
To avoid the possibility of an automatic, self-operating transfer, Pennsylvania law25 provides that the backup grantee is not obligated under the conservation easement unless and until it signs and records an acceptance of the obligation.
An agreement between an easement holder and a backup grantee may or may not be necessary depending upon the backup grantee approach taken. If a backup grantee is named only as a recommendation to a future court in its selection of a substitute easement holder, an agreement would serve no purpose. If, however, the backup grantee is granted an executory interest in the property, both the easement holder and backup grantee need the protections of an agreement addressing the following issues:
The web of relationships among the land, the landowners, and one or more easement holders, as well as others interested in the conservation of the eased property, are the foundation of conservation. Conservation objectives are best served when these relationships are harmonious rather than adversarial – a partnership furthering the interests of all. Careful analysis and documentation of the roles of each will help to eliminate misunderstandings and mistaken assumptions that often lead to conflict.
1 Leopold, Aldo,The Farmer as a Conservationist, 1939.
2 Easement management includes educating landowners regarding the conservation objectives of the easement, monitoring the land, reviewing proposed activities that may impact the land’s conservation values, interpreting the terms of the grant of easement, enforcing the terms of the grant and otherwise supporting the conservation objectives.
3 The parties to a commercial or other real estate transaction may recognize a non-party as having a protected interest in some aspect of the transaction. This non-party is referred to as a third-party beneficiary.
4 The term “easement beneficiaries” means, for purposes of this guide, those persons eligible to exercise third party enforcement rights under the Conservation and Preservation Easements Act (the “CPEA”). As more fully discussed in the guide, Standing to Enforce Conservation Easements in Pennsylvania, the universe of eligible easement beneficiaries is limited to those qualified to serve as holder -- public entities and land trusts.
5 As a general rule, the holder has a permanent interest in the conservation easement, not a temporary interest that may be lost to another upon the occurrence of a contingency. The “Backup Grantee” section of this guide discusses an exception to this general rule—a shifting executory interest.
6 For example, the backup grantee holding an executory interest holds a future interest that arises upon the occurrence of a contingency.
7 This guide avoids the term “co-holders” because the term may lead some to assume (mistakenly) that there is a particular express or implied relationship among the co-holders. Absent an agreement by the holders, this is not true.
8 Generally, co-owners of a real property interest are not fiduciaries with respect to each other. Each co-owner is expected to look after his or her own interest. Dukeminier Krier, Property, 3rd ed., 356. With respect to easement management responsibilities, there may be a duty to contribute to the reasonable cost of easement management activities furnished by other holders. The analogy is to the duty to contribute to the reasonable cost of maintenance of a servitude used in common (for example, an access easement). Restatement 3rd of Servitudes §4.13.
9 If the landowner granting the conservation easement is concerned that a particular protocol will be observed, and wants assurance that the Holder Agreement will not change on that point, the protocol may, if acceptable to holders, be included in the grant. An alternative is to provide in the Holder Agreement that the landowners granting the easement have a right of prior approval over changes to the protocol for so long as they own the eased property.
10 It would be unwise for a holder in a multiple holder arrangement not to issue or co-sign a contemporaneous written acknowledgement in the absence of IRS guidance stating or court rulings finding otherwise. The acknowledgement serves to establish for tax purposes whether goods or services were exchanged as part of the donation. Clearly, goods and services may be exchanged between the donor and one holder but not another.
11 Karin Gross, Supervisory Attorney with the Internal Revenue Service, stated in a private conversation on July 12, 2013 that all holders should sign. The logic was presented that with Form 8283 a holder affirms that it will report any transfer of the property interest with Form 8282. Since one holder could transfer their interest in the conservation easement to another party independent of another holder, each holder’s signature on Form 8283 is relevant. Conversation reported by Andrew M. Loza, Executive Director of Pennsylvania Land Trust Association.
12 Holders may elect to include within the grant their agreement as to distribution of condemnation proceeds. The rationale is to put the condemning authority on notice as to the proper distribution of proceeds.
13 Terrafirma’s “How It Works” webpage (
The primary holder would be the “first-named insured” and would manage the Terrafirma relationship. If necessary, the co-holders would need to designate a primary holder for insurance purposes and execute a written agreement about co-holding roles and responsibilities. The primary holder would be delegated to act for all the other insured co-holders on any claims. Suits between co-holders are excluded (this is called an “insured versus insured” exclusion). If the primary holder has coverage, then the other co-holders may choose not to insure their easements co-held with that primary holder. The uninsured holders would be solely responsible for their legal costs. If the primary holder is not insured, then the co-holders may not exclude the easement from their insured portfolio.
14 For assurance that all present and future landowners are aware of the issues requiring prior written approval of both holders independently, the grant may include this information for notice purposes.
15 The manager holder would, presumably, have the right to reject being named as holder if the easement did not conform to its own standards.
16 Associations between nonprofit organizations have been infrequent in the past but, due to the enactment of the Uniform Unincorporated Nonprofit Association Act adopted in Pennsylvania (part of Act 67 of 2013), nonprofit organizations are likely to avail themselves of greater opportunities for collaborations that do not expose the assets of either partner to the risks of the association. The 2013 Act makes it clear that an unincorporated nonprofit association is to be treated as a separate legal entity from its members. The members of the nonprofit association (for example, partnering holders) are not liable for the obligations of the association.
18 Apparent authority is the “power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from, and in accordance with, the other’s manifestations to such third persons.” Restatement (Second) of Agency.
19 For example, Holder A may understand that it has to invest $1,000 in management efforts each year and expects Holder B to do the same. If it turns out that Holder B only needs to spend $500 doing its share, does that change the balance in the relationship? Maybe yes, maybe no, but it’s an issue that partners need to discuss.
21 §5 CPEA.
22 The Model Grant of Conservation Easement may be adapted to allow different holders to exercise easement rights with respect to different protection areas. For example, Holder A, interested in habitat protection, may be identified as holder of the easement upon the Highest Protection Area and Holder B, interested in sustainable agriculture, as holder of the easement upon the Standard Protection Area. For greater flexibility, a better arrangement is to sort out their rights and responsibilities with respect to different protection areas in a Holder Agreement. Another, less flexible, alternative is to grant separate easements on separate protection areas. Caution is urged when separate easements are to be donated on contiguous land due to the application of federal appraisal standards.
24 §5 CPEA. The guide, Standing to Enforce Conservation Easements in Pennsylvania, discusses the exceptions to this general rule under Pennsylvania law.
25 §3(c) CPEA.
The Pennsylvania Land Trust Association published this guide with support from the William Penn Foundation, the Colcom Foundation and the Growing Greener Program of the Pennsylvania Department of Conservation and Natural Resources, Bureau of Recreation and Conservation.
Copyright © is held by the Pennsylvania Land Trust Association
Text may be excerpted and reproduced with acknowledgement of ConservationTools.org and the Pennsylvania Land Trust Association.