Contents of Main Description

Advantages over Common Law
   Enforceable by Holder Named in the Grant
   Enforceable by Certain Beneficiaries
   Resolve Ambiguity in Favor of Holder
   Merger Doctrine Discontinued
   Strong Statement of Public Policy
Drafting Considerations Under the Act
   Statutory Notice of Potential Impairment of Coal Mining
      Example of Notice 1
      Example of Notice 2
      Absence of Workable Coal Seams
   Easement Boundaries Must Be Clearly Delineated
   Reference to the Act
   Organizations Qualified to Accept Transfer
Other Matters Addressed by the Act
   Acceptance of Third-Party Right of Enforcement
   Standing in Court
   Nonprofit Status
   Same as Other Easements
   Duration
   Condemnation
Applicability of the Act
Should Non-Conforming Easements Be Amended to Comply?

Advantages over Common Law

Before June 22, 2001, the effective date of the Conservation and Preservation Easements Act, the validity and enforceability of conservation easements was governed by the common law. In other words, the rules developed over centuries of court decisions pertaining to long-term, land-based, arrangements (called the law of servitudes) was the only body of law that courts could look to when deciding questions pertaining to conservation easements. Application of some of these ancient rules to conservation easements resulted in undesirable consequences and these were legislatively changed by the Act.

Enforceable by Holder Named in the Grant

Section 6 of the Conservation and Preservation Easements Act resolves any uncertainty about the possibility that a court could invalidate a conservation easement under common law rules. A particularly vexing problem was the rule that a negative easement (such as a conservation easement) could be enforced only by an adjoining landowner. This rule had not been recognized by any Pennsylvania court since a Pennsylvania Superior Court decision in 1956 (see Appeal of J.C. Grille); however, the Pennsylvania Supreme Court had never ruled on the issue. The Act removed the possibility of invalidation of then-existing conservation easements if the Supreme Court declined to follow the Superior Court on this issue.

Enforceable by Certain Beneficiaries

One of the problems with the rule adopted by the Superior Court in 1956 was that it greatly expanded the universe of persons who could claim to be beneficiaries of a restrictive covenant. Anyone in the vicinity, whether or not owners of land adjoining the restricted property, and whether or not specifically identified as an intended beneficiary, might have rights of enforcement if a court finds that they are one of the class of persons intended to be benefitted by the restriction. That results in an administrative nightmare: each member of this often poorly defined group has a veto power over decisions and changes made by landowners and holder without their approval. The Act seeks to avoid this problem by defining "third-party right of enforcement" narrowly and giving those vested with that power standing in §5(a)(5) to enforce the conservation easement in court. The Model Grant of Conservation Easement published by the Pennsylvania Land Trust Association addresses this issue by specifically identifying those persons or entities (if any) with rights to enforce the grant of Conservation Easement (see §7.04 of the model).

Resolve Ambiguity in Favor of Holder

Section 5(c)(2) of the Conservation and Preservation Easements Act reverses the common law rule that if a restrictive covenant or other servitude can be interpreted in more than one way, the interpretation most favoring the landowner governs. This rule makes sense when interpreting ordinary access easements, billboard easements, and the like, but not when applied to conservation restrictions supported by public policy considerations. The Act directs the courts to interpret the restriction consistent with the conservation purposes of the granting document and the Act.

Merger Doctrine Discontinued

Section 6 of the Act legislatively changes the common law rule that the lesser interest (the conservation easement) merges into the greater interest (fee simple ownership) when both interests are held by the same person. Thus, a conservation easement survives even if the holder becomes the owner of the property (for example, it is left to the holder by will.

Strong Statement of Public Policy

The Pennsylvania General Assembly, in enacting the Conservation and Preservation Easements Act, recognized both the public and economic benefit of conservation and preservation easements. This public policy should be brought to the forefront whenever the validity, enforceability or public value of conservation easements is at issue.

The recognition of public benefit by the Commonwealth may be incorporated into conservation easements as follows:

The Pennsylvania General Assembly, in enacting the Conservation and Preservation Easements Act, stated that it “recognizes the importance and significant public and economic benefit of conservation and preservation easements in its ongoing efforts to protect, conserve or manage the use of the natural, historic, agricultural, open-space and scenic resources of this Commonwealth.”

Users of the Model Grant of Conservation Easement are guided to include such public policy statements in the baseline documentation of the easement or in the “Public Benefit” section of the model’s background article (model §1.06(b)). Alternatively, it may be added as a paragraph to the "Background" or opening recitals of the granting document.

Drafting Considerations Under the Act

Statutory Notice of Potential Impairment of Coal Mining

Section 9(d) of the Act requires a notice, signed by the grantor of the easement, that the conservation easement may impair future mining of workable coal seams within the property. The acknowledgment must be printed in no less than 12-point type, and must be preceded by the word “Notice” in no less than 24-point type.

Example of Notice 1

The Model Grant of Conservation Easement addresses this requirement by including in Article VII of the document the following provision:

Coal Rights Notice

The following notice is given to Owners solely for the purpose of compliance with the [Conservation and Preservation Easements Act]:

NOTICE: This Conservation Easement may impair the development of coal interests including workable coal seams or coal interests which have been severed from the Property.

The signing of the statement is accomplished with the Owners/grantors’ signatures required at the end of the document.

Example of Notice 2

Alternatively, the Pennsylvania Land Trust Association in earlier guidance offered the following draft provision to be placed in the granting document:

The following notice is given to and accepted by [Grantor] for the purpose and with the intention of compliance with the requirements of the Conservation and Preservation Easements Act. Nothing herein shall imply the presence or absence of workable coal seams or the severance of coal interests from the [property].

 Notice {24 point type}

This Conservation Easement may impair the development of coal interests, including workable coal seams or coal interests which have been severed from the [property]. {12 point type}

By: ________________ Date: ______

Grantor signature

Absence of Workable Coal Seams

The Model Grant of Conservation Easement includes the statutory notice as a matter of course. It may be omitted if no workable coal seam exists, but the better practice is to leave it in. The Pennsylvania Land Trust Association has confirmed which counties contain areas with presently workable coal seams and which do not. However, it has been unable to find an expert willing to state with 100% certainty that no workable coal will ever be found in a particular county. Hence, unless an expert can determine that no coal is present on a particular property, it would be wise to include the coal notice.

Easement Boundaries Must Be Clearly Delineated

 A metes and bounds description of the land to be subject to the conservation easement is required by §4(b) the Act. An exception is provided for areas that can be adequately described by reference to natural or artificial features, such as streams, rivers or railroad rights-of-way, or by setback from existing property boundaries.

Reference to the Act

 Rather than take the chance that any granting document may inadvertently fail to comply with the requirements of the Act, a “saving” provision may be included in the granting document stating that the easement is constructed with the intention of conforming to the requirements for conservation easements under the Pennsylvania Conservation and Preservation Easements Act. Section 7.09 “Guides to Interpretation” of the Model Grant of Conservation Easement contains the following text in subsection (d):

 This Grant is intended to be interpreted so as to convey to Holder all of the rights and privileges of a holder of a conservation easement under the [Conservation and Preservation Easements Act].

Organizations Qualified to Accept Transfer

Easements typically contain language allowing the holder to transfer the easement to an organization that is a qualified organization at the time of transfer under Section 170(h) of the Internal Revenue Code. Language could be appended to this provision to also require that the successor organization be qualified as a “holder” under the Conservation and Preservation Easements Act. (See §3 of the Act for the definition of “holder”.)

Other Matters Addressed by the Act

Acceptance of Third-Party Right of Enforcement

(See §3 and §4(c).)

An easement may be written to grant an entity the right to enforce the conservation easement, often conditioned upon the failure of the holder to do so. Before the Act, entities were sometimes named in the granting document as having the right and responsibility to do so without their having been consulted in the matter. The Act protects entities from having undesired conservation easements foisted upon them without their knowledge or consent. They may elect to accept the duty to enforce by signing a written acceptance and record the acceptance. The flip side is that, until they sign and record a written acceptance, they do not have rights of enforcement. Acceptance of enforcement rights may be part of the granting document or in a separate instrument.

Although the acceptance could be recorded at some future date, a good practice is to record the third-party’s acceptance of the right to enforce from the outset as part of the easement document. This way the easement holder and landowner know that the chosen third-party has in fact accepted the responsibility, and if trouble should develop in the future, there will be one less hurdle for timely enforcement.  Including the acceptance as part of the easement itself also simplifies future title work.

Standing in Court

Section 5(a) of the Act defines who has standing to bring legal or equitable actions affecting a conservation easement:

• An owner of the real property burdened by the easement.
• A person that has any interest or right or holds an estate in the real property.
• A holder of the easement (e.g., the land trust).
• A person having a third-party right of enforcement (a qualified entity named in the easement).
• A person otherwise authorized by Federal or State law.
• The owner of a coal interest: (1) in property contiguous to the eased property; or (2) which has been severed from the ownership of the property.

This list clearly identifies those persons and entities entitled to appear in court to bring suit against holders to enforce an easement in accordance with their perceptions of what is correct. The Act denies court access to persons and entities not listed and who, under common law, might have sought redress that holders thought was inappropriate or overly zealous.

Section 5(b) of the Act prohibits bringing suit for activities occurring outside of conservation easement boundaries except where those activities “pose a substantial threat of direct, physically identifiable harm” within the eased area.

Nonprofit Status

Non-governmental easement holders must maintain their Bureau of Charitable Organizations registration and their IRS 501(c)(3) tax status (see §3).

A typical easement drafting practice is to note a holder’s 501(c)(3) tax status in the “background” or “whereas” section of an easement. As a reminder of the importance of maintaining charitable registration, language may be added stating that the holder “is registered with the Bureau of Charitable Organizations of the Pennsylvania Department of State”.

Same as Other Easements

Section 4(a) of the Act states that:

Except as otherwise provided in this act, a conservation or preservation easement may be created, conveyed, recorded, assigned, released, modified, terminated or otherwise altered or affected in the same manner as other easements.

Commentators have observed that this provision does not free holders and donors of land under easement from various obligations that they may have under the law in regards to modifications to easements.

Duration

Conservation easements created after June 22, 2001 may not have a duration of less than 25 years (see §4(d)). This is generally not a problem since nearly all conservation easements are written for perpetuity.

Condemnation

The Act does not change existing eminent domain law. (See §5(d) and §5(e).)

Applicability of the Act

(See §7.)

The Act applies to easements that comply with the Act and that are created after June 22, 2001, the date that Governor Ridge signed the legislation into law.

The Act also applies to easements created before the Act if those easements comply with the Act and were recorded or, if not previously recorded, were recorded within 180 days of 6/22/2001.

The Act does not invalidate any interest, conservation easement or otherwise, “enforceable under another law of this Commonwealth or the common law.”

The Act does not alter, modify or supersede “either the method of creating, or the rights, duties, powers or obligations appurtenant to agricultural conservation easements” under the state’s Agricultural Area Security Law.

Should Non-Conforming Easements Be Amended to Comply?

Holders may want to consider amending their existing easements as necessary to come under the Act. Easements that do not comply with the Act will continue to be interpreted under common law.

Whether a holder should pursue the amendment of any particular easement to bring it into conformance with the Act depends on a number of factors:

• Would amendment provide the holder opportunity to make other improvements to the easement document, including, bringing the entire instrument up to modern drafting standards?
• Would the present landowner be willing to make changes to the easement document?
• Would opening the document to change cause the landowner to push for changes that the holder would not want to entertain and that could result in friction between the holder and landowner?
• Conversely, are there changes that the landowner and holder mutually desire that could be accomplished together with changes specific to the Act?

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