Second Department Explores Scope of Conservation Easement

Uses

Conservation easements have been used extensively in New York to preserve agricultural land, although they have been used in urban areas to preserve architectural features. For instance, in Schottland v. Brown Harris Stevens Brooklyn, LLC, 107 AD3d 684, the owner of a residential building granted a conservation easement to the National Architecture Trust, Inc, precluding future changes to the building's fa'ade and exterior without the trust's express written consent.

In the agricultural context, conservation easements are most useful in areas facing significant pressure for residential or commercial development. The value of the property may be far higher for residential or commercial purposes than for agricultural purposes, leading to property tax assessments that are prohibitive for agricultural users. By conveying a conservation easement to a not-for-profit entity, the owner reduces the value of the underlying fee, and therefore reduces the property tax assessment, making agricultural use financially feasible.

Scope: The Tamira Amelia Farm Case

In 2004, Tamira Amelia Farm, LLC, granted a conservation easement to the Orange County Land Trust. The easement's stated purpose was to conserve productive agricultural and forestry lands, and also to conserve the scenic character of the property, for the benefit of the public and future generations. Subsequently, Tamira Amelia Farm conveyed the subject land to Clemente Farm, LLC. The latter then built a barn and an access road on the parcel. Clemente Farm did not seek prior approval from the Land Trust for either the barn or the access road, but the Land Trust subsequently agreed to review Clemente Farm's application retroactively. The Trust withheld permission, and then brought an action for a declaration that Clemente Farm had violated the conservation easement, and for injunctive relief. After a nonjury trial, Supreme Court denied all relief, and the Land Trust appealed.

The Second Department affirmed. With respect to the barn, the court held that the landowner had violated the easement by failing to obtain permission, but held that the Land Trust had unreasonably withheld its permission. The court emphasized that the purpose of the easement, at least with respect to the farm area of the property, was not merely to conserve the natural and scenic character of the property, but to conserve and//or enhance its agricultural use. Construction of the barn, then, was consistent with the easement's agricultural purpose. The court then turned to the access road and emphasized that the terms of the easement authorized the farm to construct unpaved access roads for farming purposes without the Trust's prior permission. The court then held that, in any event, the Trust had unreasonably withheld its permission when landowner retroactively sought that permission.

The court's decision authorizing an expansion of agricultural operations undoubtedly reduced the open space on the farm, and perhaps impaired the scenic character of the farmland. But had the court enjoined the farm's expansion, the decision might well have frustrated one of the primary objectives of conservation easements in New York: preservation of agricultural land. If agricultural owners became concerned about overly rigorous enforcement of conservation easements, their response might be to forgo creating those easements altogether, instead caving to pressures for residential or commercial development.

The Tamira Amelia decision is a significant one because New York case law on the scope of conservation easements is sparse. The decision provides some degree of reassurance to agricultural owners that grant of a conservation easement need not inhibit modernization of agricultural operations.

Stewart E. Sterk, Mack Professor of Law at Benjamin Cardozo School of Law, is the Editor-in-Chief of this newsletter.