Conservation easements must be interpreted to encourage cooperation not conflict

flickr_-_usdagov_-_20130501-nrcs-lsc-0607Private investment in environmental conservation is exploding, totaling more than $8 billion over the last decade. That will likely continue to grow. Industry recognizes that consumers are more environmentally sophisticated than they used to be. And, as incomes grow around the world, more people are willing to pay a premium for a better environment. One important tool for this private conservation is conservation easements. But for this tool to be most effective, it’s imperative that courts interpret them neutrally, rather than putting a thumb on the scale for or against conservation.

A conservation easement is a property right in which a property owner trades a restriction on her future use of her property in exchange for compensation or tax benefits. The property owner can also benefit if his neighbors also agree to conservation easements that, together, provide environmental services to all of them. Approximately 24 million acres are subject to a conservation easement in the United States, spread across more than one hundred thousand of them.

Unfortunately, the celebration when a new conservation easement is negotiated often gives way to conflict down the road. Since a conservation easement restricts property use for a long time, perhaps permanently, there are plenty of opportunities for unforeseen disagreements to arise, leaving the parties to argue over the meaning of an easement’s vague terms.

How should these disputes be resolved? Traditionally, easements have been interpreted to permit maximum use of a burdened property without undermining the easement’s purpose. Many courts have flipped this standard on its head for conservation easements, interpreting them broadly to further their conservation purposes, even at the expense of uses that the property owner never agreed to forego.

Unfortunately, this thumb on the scale in favor of one side of the conservation easement can sacrifice the long term benefit of these easements as a tool for conservation to achieve some short term gain. In an individual case, this interpretation may benefit conservation by blocking otherwise permissible land uses. But, going forward, only a foolhardy property owner would agree to a conservation easement with the knowledge that every ambiguity in it would be used against him.

Generally, contracts are interpreted against the drafter, to protect unsophisticated parties from predatory practices. If conservation easements are interpreted in a biased manner, it threatens to exploit unsophisticated property owners to benefit (usually well-healed) land trusts or environmental groups.

In the long term, both property owners and conservationists will be better off by a fair rule that encourages cooperation rather than conflict. Litigation over the meaning of extremely vague easement language is a significant drain on both and should be discouraged. But if courts interpret vague easements to favor one party or the other, conflict will be inevitable. And it will encourage the party who would benefit from that interpretation to make easement language more vague, in the hopes that it will lead to some payoff in a later dispute.

Conservation easements are like any other contract. They don’t have any single purpose. Each side has its own purposes. The land trust’s or conservation organization’s purpose is to maximize conservation at the lowest cost whereas the landowner’s purpose is to achieve the most return in exchange for the fewest future restrictions. If the two sides have any common purpose, it’s reflected in the strict language of the easement.

Signing a conservation easement is and should be a significant step for a property owner. Like a marriage, it gives someone a say in how your property is used forever. There are many horror stories of property owners getting involved with the wrong land trust, leading to years of conflict and little conservation. Courts shouldn’t adopt rules that encourage that sort of conflict and neither should well-meaning conservation organizations. Perhaps what we need in the long term is a libertarian land trust that can specialize in clear and explicit conservation easements, without the need for subsequent, expensive enforcement and litigation.

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