How to Convey an Easement to MHT
An “easement” is broadly defined as a nonpossessory interest in the real property of another, and arises through express grant or implication. Easements are recorded with the Deed and are usually perpetual in duration. The Maryland Historical Trust acquires easements in a variety of ways including donation, as a mitigation for a State or Federally funded or permitted project, or as a method of protecting the State's investment in historic properties that recieve capital grants, bond bills, or loans. In most cases when historic properties are transferred out of state or Federal ownership, MHT will record an easement before the property is conveyed to the new owner.
What is the difference between a donation and conveyance?
The process for the donation or conveyance of an easement is similar. The biggest difference is that a donation is not required and is possibly eligible for a charitable tax deduction.
Easement Conveyance Information
The Maryland Historical Trust will consider the acceptance of an easement provided the property, building, or structure is listed or eligible for listing in the National Register of Historic Places, or located in a registered historic district.
A donation will require that the owner submit to the Trust a letter expressing their desire to donate an easement. Owners are responsible for providing enough information to meet the Trust’s requirements for acceptance of an easement. For a sample letter, please see the attached document.
Please note that the Trust’s requirements for eligibility differ from those of the IRS as a “qualified property” for consideration of a charitable contribution. The Trust will accept properties that we determine as are “eligible for” listing but not actually included on the National Register, whereas the IRS requires completion or initiation of the listing process. Please click on the appropriate title for more information on IRS requirements or listing on the National Register.
How long will the conveyance process take?
Easements are tailored to meet the needs of the property owner, the individual resource, and the mission of the preservation organization. There are several steps associated with the donation or conveyance of a deed of easement. Because each easement is customized, there is no way for the Trust to definitively predict how long the development process will take. We recommend allowing for at least one year.
How much does it cost to convey an easement to MHT?
Although there are likely to be associated costs with the donation of an easement, like fees paid to lawyers, appraisers, and banks, the Trust does not require an administrative fee or endowment fund.
Certificate of Title
This form requests the submission of all deeds in the chain of title for at least a 60 year period and a corresponding plat and property description. This allows the Trust to review and ensure that the subject property is free and clear of any and all liens or encumbrances.
Plats must be signed and stamped by a certified surveyor and submitted to the Trust in 11” x17” format. All metes and bounds must correspond exactly to the property description.
Deed of Easement
This sample document will be modified to reflect specific concerns or issues for each property. The MHT will make changes to the document and send a draft for the Grantor’s review. Photographs to include in Exhibit B will be taken by Trust staff.
In order to meet the requirements of the Trust’s preservation easement program or claim the Federal income tax deduction the certified historic structure or historically important land area must be accessible to the public. The degree of access is tailored according to the historic resource under protection. When a historic structure or land area is not visible from a public way, certain steps must be taken to ensure that the public has the opportunity to view the property preserved by the easement “to the extent consistent with the nature and condition of the property.” The Trust can assist the grantor in finding a balance between protecting the owner's privacy and providing a public benefit. The Trust will require the completion of a public access form each year to confirm that the easement property has met the necessary public access requirements defined in the easement.
Charitable Contributions for Donated Easements
In 1979, Congress authorized formal charitable contribution deductions for federal income, estate, and gift tax purposes on the value of a donated conservation easement (which includes preservation easements). Since its initiation, various provisions have been incorporated and modified into the tax code in order to further qualify acceptable donations.
A charitable contribution is a donation for the purpose of conservation or preservation as a means of protecting land areas for outdoor recreation or for the education of the general public, natural environmental systems, open space where such preservation will yield a significant public benefit, or a certified historic structure or historically important land area.
Valuation of Donated Easements
According to the National Park Service, “Under Section 170(h) of the tax code, a donor of a qualified conservation easement is entitled to a charitable contribution deduction in the amount of the appraised value of the donated easement.” In 2006, Public Law 109-280 allowed for donations made in tax years beginning in 2006 and 2007 to 50 percent of a taxpayer’s contribution base for the year of the donation, with a 15 year carryover. Donors should check with their tax advisors for specific information.
Properties that Qualify for Charitable Contributions
In order to qualify for a charitable contribution, the IRS requires that the qualified property obtain confirmation of “certified historic structure” status.
A “certified historic structure” is a building, structure, or land area that is individually listed by the National Park Service on the National Register of Historic Places or a building (but not a structure or land area) located in a National Register historic district and certified by the Secretary of the Interior as contributing to the historic significance to the district.
The property owner must complete a Part 1 application and return it to the SHPO, who will forward the document to the National Park Service, which issues certification on behalf of the U.S. Department of the Interior. The property must be certified by the National Park Service prior to conveying the easement, or before the owner files a Federal income tax return for the year in which the easement was granted.
Qualified Easement-Holding Organizations
The IRS recognizes qualified easement-holding organizations that have the preservation of historic places as a part of their mission and have the commitment and resources to enforce and monitor the easement. These qualified organizations may include a governmental unit (state historic preservation office or local preservation commission) or a charitable organization (§ 501(c)(3)) (a community land trust or not for profit historic preservation organization). An owner should verify that an organization is qualified prior to conveying an easement. Verification can be obtained by contacting the IRS Taxpayer Assistance office in your area.
This page updated: December 19, 2012