By L.M. Schwartz
Augustus “Gus” Jones and his wife, Dora, owned a moderate-sized farm. They married and bought the farm after Gus came home from the War. They worked hard, saved, improved, bought additional land and remodeled the old farmhouse where they raised two sons.
One son left the farm to become a construction foreman and the other became plant manager for the feed mill in town. Neither could afford to come back to work the land full-time. Taxes, expenses and inflation seemed to always be one step ahead of income. The county was losing farms. Young people moved to town for jobs. More retirement and vacation homes sprouted up on the land each year. Gus and Dora wanted to pass the farm on to their sons, but the boys couldn't see any way to support their families.
One day, Gus and his wife were approached by Sherwood Pinkney Rittenhouse, III, a graduate of The University with a degree in Environmental Science. Sherwood was a Peace Corps Volunteer now working for the Valley Conservation Trust. He was in charge of the Conservation Easement program. Sherwood met several times with Gus and Dora, praising the virtues and advantages of CEs. He told Gus the farm could be “preserved forever”; that CEs were a way to reduce inheritance, capital gains and property taxes; that the Trust even had some funds available to purchase a CE; that CEs are a “private, voluntary, free-market solution to urban sprawl”; that a productive future and “sustainability of the working farm” would be protected; that CEs “preserve the culture, heritage and scenic values of rural communities”; and that a CE would keep the land in the family for “the benefit of future generations.”
At first, Gus was suspicious, but Sherwood was persistent, knew how to flatter, sounded sincere and was persuasive. He knew important people, including the Congressman, a 'conservative' man who endorsed CEs. Sherwood dropped names of all the wealthy and prestigious people in the county who had placed a CE on their land. Even local attorneys thought CEs were a good idea.
Gus and Dora wanted to see the farm survive. They felt deeply about their way of life and dreamed of the day when their grandchildren would “come home.” They entered into a CE Agreement with the Valley Conservation Trust.
When the truth became clear, when they realized their error, it was too late…
Conservation Easements are a deception, a legal fiction, and a fraud. They are not easements in the traditional sense most of us understand. CEs do not benefit our property or a neighbor's property, as in the case of a power-line easement or an easement of right-of-way. CEs are a Frankenstein conglomeration of equitable servitude and restrictive covenant. CEs burden property and property owners with negative and/or affirmative obligations (restrictions and duties) which are often undefined and may change or become more restrictive at a later date.
Modern perpetual CEs have little or nothing to do with conservation, but are a legal device used by government agencies (NPS, USFWS, USFS) and their “private sector” land-grab surrogates to transfer property from private hands to government. Green-Preservationist radical organizations such as The Nature Conservancy, the Sierra Club, the Civil War Preservation Trust and hundreds of other “charitable trusts” and “foundations” have lobbied for enactment of CE statutes and promote their use. Tax-exempt, taxpayer-supported “trusts” often have profitable, secretive, and incestuous ties with government agencies, and, according to General Accounting Office studies, often “flip” CEs to government at a huge profit.
CEs work by fragmenting or splitting the fee simple title to land. Fee simple title (estate) is composed of a “bundle” of rights: water rights, mineral rights, rights to lease, to rent, to mortgage, to sell, to gift, to devise by will, to hunt, to enjoy, to exclude trespassers, and many other rights. Fee simple title means the owner holds the complete bundle of rights. In most cases, the most valuable right is the “development right”: the right to subdivide and enhance the value of the land with homes or for commercial use. CEs eliminate or severely restrict development rights, which are transferred by a written “deed” to a grantee, or “holder,” who then owns and possesses the development right. Even if the owner never intends to exercise development rights, they often constitute 50% or more of the underlying equity (value) of the land. By entering into a CE agreement, the landowner “splits the estate”, depletes the value of the land, and loses or restricts options for use of the land for himself and his successors in title. The grantor or seller of a CE is, in truth, no longer the owner of the land, but only has a remainder interest in the land. CEs are described as “non-possessory interests in land,” but this is a deception.
In Medieval Europe, power and land (wealth) were controlled by a ruling elite through laws of “The Dead Hand.” The laws of mortmain, literally, “the dead hand,” allowed the perpetual concentration of wealth in the hands of monarchs and privileged lords who could “reach out past the grave” to control disposition and use of property, keeping it within the family or with chosen successors. The people, the serfs, were essentially slaves bound to the land, either working for the benefit of the rulers or conscripted into service to fight imperial wars.
During the past seven centuries, as man struggled for and asserted individual rights, the laws have changed to recognize the God-given rights of life, liberty and property. Our law reflects the concept that private property is a sacred right; that each generation should have the option to decide about the best and wisest use of land; and that the “Dead Hand” should not interfere with those decisions or undermine the economic utility of property.
Our property law protects the Free Alienability of land, which simply means we have the right to sell, gift or devise the property we own without the permission of a king or government bureaucrat. But laws protecting our rights have increasingly come under attack. CEs are a recent and devious assault because they destroy the free alienability of property. The land “owner” becomes a mere serf or tenant on what was his land, but is still burdened by taxes and other expenses, and subject to the whim and will of the government (the king) or the tax-exempt trusts (the privileged lords and nobles). Wealth and power (property) are transferred to, and accumulated in the hands of the modern ruling elite: government agencies, foundations and trusts which form an unholy alliance to defraud us of our land and heritage.1
CEs destroy Privity of Contract and Privity of Estate. Privity means the private relationship between parties. If Gus Jones sells Herman Smith a 40-acre tract from his 200-acre farm, there is privity of contract between them. Jake Hoover has no right to interfere with the agreement between Jones and Smith. If Jones reserves a right-of-way across the tract he sold to Smith, there is privity of estate between the two properties. Neither Jake Hoover nor anyone else has the right to use the right-of-way since there is privity of estate between the Jones and Smith tracts.
But when Gus signed a CE agreement with the Valley Conservation Trust, he signed away privity. CE statutes allow outside, third-parties who have legal “standing” to interfere with the agreement between Jones and the Trust. The Nature Conservancy, the Sierra Club, NPS, USFWS or any other “person” with “standing” (“non-profit charitable land trusts and certain public entities”) can bring legal action against Jones and/or the Trust to enforce the CE Agreement, or even change the Agreement, adding new restrictions or obligations not contemplated or set in writing when the Agreement was signed.
Part of the Jones Farm was timberland. The CE allowed harvesting of timber. When the Nature Conservancy and the Environmental Protection Agency were told by a “neighbor” that there were Blue-Tongued Toads, an “endangered species,” on the Jones Farm, they hauled Gus into court and stopped him from cutting. Not only was an endangered species threatened, but the “scenic viewshed” would be damaged.
When Gus signed the CE, he devalued his land by signing away the development rights, and now he was unable to harvest the timber to make mortgage payments and pay medical bills for Dora's heart condition, not to mention the $30,000 lost in legal fees to defend “his” timber rights in a lawsuit brought by the government and a multi-billion dollar, tax-exempt, “charitable” organization.
Gus and Dora were between a rock and a hard place. He should have retired years ago. He was old, his wife in poor health. They hadn't had a real vacation in years. Debt began piling up after he lost the lawsuit. The old house needed a new roof, fences needed building and the tractor needed repairs. The farm co-op put his account on a cash-only basis.
Gus made an appointment with his local banker, his “business partner” of many years. The banker was blunt. “Gus, we grew up together. I'm your neighbor and your friend. I'm sorry, real sorry, but the bank can't lend you money on land that has a CE in place. We can't subordinate our financial interest to an outside or unknown third party. The risk is too high on land encumbered by a CE which severely diminishes the collateral value of land.”
That evening, Gus and Dora talked it over. Their two sons wanted to help but couldn't see how. The Trust had acquired CEs on much of the other land in the county and now there were rumors about the Park Service creating a “Natural Reserve” area.
Herman Smith had been pressured into putting a CE on his 40 acres because the Blue-Tongued Toad was on his land too. The EPA, state and county authorities had imposed land-use restrictions and a severe zoning ordinance. Herman sold out to the Trust for half what he paid Gus Jones. No one wanted the land except the Trust. It was the same story up and down the Valley. Land for sale, no buyers, and the Trust could name the price.
Gus held out almost a year for something close to a fair-market price, but the market was gone. The real estate agent only showed the farm twice. Sherwood Pinkney Rittenhouse, III stopped by fairly often. Dora started calling him the “undertaker” because he drove a black Cadillac and wore a dark business suit.
Gus and Dora sold to the Trust too. There wasn't any choice. When all the farm debt was paid off, there wasn't much left. Dora never got her vacation. She died of a heart attack about a year after the farm was sold. Gus took the grandchildren out to visit the homeplace only one time. They said he never spoke a word on the way back.
Gus read in the paper about Sherwood accepting a high-level job in the Park Service. In the article, Sherwood stated: “The Park Service has reached an historic agreement with the Valley Conservation Trust. Almost six thousand acres of Valley land and CEs will be sold to the Park Service. Congress has provided funding for the establishment of the 'Valley National Scenic Area.' This natural area, with its cultural resources, will be enjoyed by visitors from across the nation. Tourist dollars and newly created Park Service jobs will boost the local economy. This pristine land will be preserved for the benefit of our children forever.”
Gus rents a small apartment in town, not far from one of his sons. The old farmhouse is boarded up. Vandals burned the barn to the ground. The fences are laid over, brush has taken the meadowland, and the bottomland is eroded from heavy rains. The Park Service has plenty of money for land acquisition, but none to care for the land.
The restrictions imposed by CEs, and the unknown effects of third-party litigation, throw doubt on the loan value of CE encumbered land. Bankers all across the nation are avoiding loans on land with a CE. Dee Gidney, Ag Loan Officer at Texas Bank, stated, “I'm flat against conservation easements. Conservation easements eliminate property loan value.” Arizona researcher, Rachel Thomas, finds, “Major agricultural financial institutions have discontinued the practice of making loans on any property which has been encumbered by a conservation easement.”
In addition, CEs severely restrict the number of potential purchasers if the land is offered for sale. Gina Brosig, of the American Farm Bureau Federation, stated, “By encumbering the property… owners have denied all future owners the right to decide how they wish to use the land. By entering a CE, the private property owner has set the stage for government to eventually take full possession of the land.”
Like many uninformed rural landowners, “Gus” was lured into accepting the “benefits” of a CE by the glib-tongued “Sherwood.” It is true there are some tax benefits in the short-term. Real property taxes may be reduced, but that simply places a higher tax burden on landowners who do not have a CE. When enough CEs are in place, county revenues are depleted of funds for education, the sheriff's department, and other critical county functions. For Gus, the capital gains and inheritance tax benefits proved to be an illusion. He sold the farm at a loss. There was nothing for his children to inherit.
Another consequence of CEs is to reduce the total acreage available for home building and commercial use. The price of a building lot is driven up, encouraging subdivision of productive agricultural land, the opposite result of the claims made for CEs. A vicious cycle is started, leading to pressure for more restrictive zoning and land-use regulation. Free-market decisions about the wise use of land are distorted by political interests. The cost of all land-based resource production increases. Everything consumed in our society must come from the productive capacity of the land, of the earth's natural resources.
CEs encourage depletion of the land. When the “owner” realizes he has become a mere “tenant” on the land, attitudes about stewardship change. The loss of underlying equity, and the realization of potential further restrictions, legal actions, or changes in laws, only serve to discourage upkeep and investment in capital improvements. In many cases, forest lands have been stripped clean when owners become aware of impending restrictions on timber sales, soil fertility of farmland has been depleted, overgrazing becomes common, and good management practices fall by the wayside.
CEs are routinely sold, traded, transferred and assigned. The local “trust” or “foundation” which holds the CE often acts as an intermediary, or agent, for a federal government agency or a national, multi-million dollar, environmental “non-profit” such as the Nature Conservancy. “Local” land trusts inspire confidence and take on an aura of respectability because of the homegrown appearance and warm-fuzzy publicity in the local press. But the local “Save the Farmland Trust” is probably financed by “grants” from the huge national trusts and/or government agencies. The CE granted to the local trust is likely to be eventually held by the Park Service or the Nature Conservancy.
CEs are not voluntary, are not private, and are not free-market solutions to land preservation. The tremendous concentration of tax-exempt wealth in the hands of “land preservation trusts,” and the political connections and power they wield in county, state and federal governments, allows them to outbid almost all market-based land buyers. Typically, when scenic or historic property comes on the market, the trusts and government agencies have almost unlimited funding to purchase a “significant” property from a “willing seller.” The trust or agency may either hold the land or sell after a CE is in place. This type of “voluntary, private, free-market land preservation” is simply a fraud. As pointed out earlier, most land trusts have complicated, secretive, monopolistic and incestuous relationships with government agencies, bureaucrats, and certain large corporate sponsors.
The “Willing Seller” is part of the same fraud. Landowners seem to easily forget the equation: For every willing seller, there must be a willing buyer, or buyers. CE encumbered and devalued land is designed to create the “willing seller”, while at the same time reducing or eliminating the number of willing buyers. Most often, the only willing buyer is government or the land trust. There can be no arms-length, free-market transaction under such circumstances. Other private users of productive resources, farmers, mining interests, or timberland purchasers are excluded from the market.
“Saving rural communities, preserving our cultural heritage”: More Lies! The vitality of rural communities and the survival of our rural culture and institutions depend on a strong resource-based economy: agriculture, mining, and timbering. CEs destroy resources and equity in land by transferring control to government, with its sordid history of waste, mismanagement, stupidity, corruption and destructive policies. CEs destroy human initiative and energy, and our willingness to sacrifice and forgo present gain for the benefit of our heirs. CEs foster dependence on government, on subsidies, and condition the minds of property owners to accept debilitating controls and regulation. CEs destroy our culture of independence and self-reliance, destroy the strength and bonds of family and community, and destroy real community-based charitable efforts for those in need.
International agencies, such as the communist-controlled United Nations, support and promote CEs as a method of national and international governmental land control. In 1972, the International Union for Conservation of Nature and Natural Resources laid out a scheme for CE use in the United States. The plan details how CEs can be used by government to control land without incurring the expense of compensation for outright land condemnations. Land “takings” are accomplished in a more subtle way, without creating public outrage, through the use of CEs by land trusts and government agencies.
The basic principle, or philosophy, of the CE is pure, elitist arrogance. The idea that land can, and should, be preserved in perpetuity “for the benefit of our children” is worse than folly. It is the highest form of conceit. The assumption is that the present generation has the wisdom, the right, and the duty to make decisions about the future use of land, and even is able to identify the land deserving preservation. This attitude ignores the reality of history: that cultural attitudes, scientific knowledge and nature change.
The arrogance is founded in the belief that “we know all there is to know.” It is the egocentric, spiritually bankrupt equivalent of the greed of the “Dead Hand” which seeks to control the future.
In Leviticus 25:18, God commands, “You shall observe my laws and faithfully keep my decrees, that you may live on the land in security.”
God warns Moses that, “The land shall not be sold in perpetuity (beyond reclaim), for the land is mine; for you are but strangers (sojourners) and my tenants. Throughout the land that you hold, you must provide for the redemption of the land.”
God insists upon both a spiritual and a material inheritance, that both are bound together, and that we are forbidden to disinherit our children of either one.
In Isaiah 5, The Song of the Vineyard, we are told of the consequences of disobedience: “and if one looks at the land, he will see darkness and distress.” And again, in Leviticus: “Your land will be laid waste, and your cities will lie in ruins.”
Conservation Easements are contrary to God's Law. God says not to sell our inheritance in perpetuity.
But if we follow His Law, He promises: “I will grant peace in the land, and you will lie down and no one will make you afraid… you will eat all the food you want and live in safety in your land… I am the Lord your God, who brought you out of Egypt that you would no longer be slaves…”
Notes
