Frequently Asked Questions
Frequently Asked Questions about Agricultural Conservation Easements in West Virginia
Where do I start to find out about placing a farmland protection conservation easement on my property?
When you have decided you are interested in placing a conservation easement on your property, visit the website at www.wvfp.org and find the farmland protection board in your county or contact the state farmland protection, the West Virginia Agricultural Land Protection Authority.
The Authority is empowered to accept conservation easements from anywhere in the state, however, under their program landowners in those counties that also have farmland protection boards are not eligible to apply directly to the state. The Authority is intended to provide a state-level entity as a dual system in parallel with the county Farmland Protection Boards. The Authority also serves to assist those landowners in counties that do not have farmland protection boards.
Next, make an appointment with the Board representative to review the application process and receive forms to complete the application. Each county has separate applications, rules, and awarding process.
What West Virginia organizations are involved with farmland protection?
There are 19 West Virginia counties with a farmland protection boards, and the state-wide West Virginia Agricultural Lands Protection Authority. The state’s Outdoor Heritage Conservation Fund also will consider farmland, but prioritizes other natural resources. In addition, only 501-c-3 organizations may apply to the Outdoor Heritage Conservation Fund. The West Virginia Natural Resources Conservation Service (NRCS) is a federal partner that offers matching funding to the county boards. Again, landowners may not apply directly to the NRCS.
Agricultural properties that contain other valuable conservation features, such as rare habitat, forest lands, water resources or historical importance may be eligible for protection by other conservation organizations that partner with the farmland protection boards, or may garner you more points under some local farmland protection programs. Local boards have partnered with private conservation groups such as The Nature Conservancy, The Potomac Conservancy, Cacapon and Lost Rivers Land Trust, the Land Trust of the Eastern Panhandle and the West Virginia Land Trust. Let your local farmland protection board know if you wish to add a private partner to your conservation easement. Federal organizations such as the National Park Service/ American Battlefield Protection Program and state organizations such as the WV Department of Environmental Protection have also contributed funding to conservation easements on specific properties.
What is a farmland protection conservation easement?
A farmland protection conservation easement is a set of restrictions a landowner voluntarily places on his or her property in order to preserve its agricultural and other conservation values. The goal of the easement is to maintain agricultural land available for production by removing the development pressures from the land. Such an easement prohibits practices which would damage or interfere with the agricultural use of the land.
The conservation values of the property and the restrictions created to preserve those values, along with the rights reserved by the landowner, are detailed in a legal document known as a conservation easement. In West Virginia, we have model conservation easement language used by all counties and the state. This document is signed by all parties, notarized and filed with the local county land records. Because the easement is a perpetual restriction on the deed of the property, the easement remains in effect when the land changes ownership.
How are farmland protection conservation easements different from other types of conservation easements?
Farmland protection conservation easements are created specifically to support agriculture and prevent development on the subject parcels. While other benefits may accrue because the land is not developed (scenic and habitat values, for example), the primary use of the land is agricultural. To be considered, properties must be of a size and nature suitable for agriculture. Each county program may define certain sizes, soil quality, or other characteristics to be eligible.
What are the size requirements for a property?
Often, properties less than 20 acres usually will not be considered eligible for the program. However, county programs often consider a small property if it has high quality soils and abuts an already protected farm, or if the owner offers a donation of the easement. Again, check with your local program.
Questions About Process/Time
How does the easement process work?
Donating or selling the development rights to land – often a farm or ranch family’s most valuable asset – requires careful planning and consideration. It often takes years from the initial conversations with a landowner before a conservation easement is completed.
Questions About Time
How long do you have to own the property to be eligible for the program?
There is no requirement for length of ownership.
When do applications need to be submitted?
Applications generally can be submitted to the counties at any time. However, counties typically accept applications until October 31st of each year in order to submit them for federal matching funds, and a yearly deadline may apply for local funding considerations. If a landowner is donating an easement on their property, deadlines would not apply.
What is the estimated timeframe from acceptance to closing on the easement?
Approximately 18 months for a local or local-state funded easement, and up to two years if Federal monies are involved.
How do I qualify for the program?
Land is eligible if it meets the minimum eligibility criteria in the local county program. This can vary from county to county. The state law only mandates that a portion of the land be farmland or farmable.
If I qualify, am I automatically awarded?
No, each county program has a competitive ranking process and limited funds. Ask for your county program’s ranking criteria. Properties are generally ranked once the application deadline is passed. Applicants and their scores are public information once this is completed, so you can ask to see how you ranked compared to other applicants.
How much am I paid for the conservation easement?
First, you must have an asking price when you apply to the program. Your local farmland representatives can assist to help you determine what fits with their program and the local values. You will not be paid more than you request. The value of a farm or development easement is established through an independent appraisal. Under state law, you may not be paid more than the appraised value. Once a value has been determined and agreed upon, and an application has been approved, the sale can proceed.
Can I withdraw if the easement value is lower than what I offered?
Generally, yes, but check with your local program as to their rules. At least one county requires that you obtain an appraisal before applying; other counties may require reimbursement of due diligence costs if you withdraw late in the process.
How is the program funded?
Currently the farmland protection programs are funded on the County level by a portion of the Real Estate Transfer Tax collected by the County Clerk.
In counties with recognized battlefields on farmland, funds are available for battlefield protection through the National Park Service/ Battlefield Protection Program. Two state entities, the Outdoor Heritage Conservation Fund (OHCF), and the West Virginia Agricultural Lands Protection Authority (WVALPA), which are funded by state recording fees, fund select conservation easements in partnership with local farmland protection boards and private land trusts.
What if I have a loan on the property?
Your lender must be willing to agree to subordinate the loan to the interests of the conservation easement, or you must pay off the loan at closing. Subordination means that the lender agrees to abide by the terms of the Deed of Conservation Easement in the event of foreclosure of the property.
Do I need to own my mineral rights?
Check with your county program. Many of the programs in the western part of the state will evaluate your mineral severance and may determine you are eligible. You must own your mineral rights to obtain state or Federal funding.
What Organizations are involved with placing the easement on the land?
The Deed of Conservation Easement is held and administered locally, at the county level for those with farmland protection board funding. The farmland protection board is appointed by your County Commission. Those conservation easements with state-only funding would be administered by the state. In addition, with the approval of the county farmland protection board, a landowner shall designate a co-holder under the Deed of Conservation Easement. Typically, private land trusts may be utilized to co-hold easements with governmental and quasi-governmental entities as desired by the landowner. For instance, The Land Trust of the Eastern Panhandle and The Nature Conservancy are examples of private land trusts. One entity will be designated as the lead to work with the landowner at the time of the easement and into the future.
Questions About Restrictions
A conservation easement is forever… Can an easement be removed and by what authority?
If circumstances arise in the future that render the purpose of the easement impossible to accomplish, the easement can only be terminated or extinguished, whether in whole or in part, upon approval by the farmland protection board, any co-holders, or successors, and be authorized via judicial proceeding in a court of competent jurisdiction. This is very unlikely to happen.
Can I harvest trees under the easement terms?
Generally, trees may be harvested for farm useunder an approved Forest Management Plan. Again, talk to those in charge of your local program for specifics.
Will any type of farming be prohibited?
There are no particular restrictions on farming as long as they do not damage the agricultural quality of the land. There is generally a two percent impervious surface limit for structures and roadways.
Who owns the mineral rights on lands contained in a conservation easement?
The mineral rights may be held by the landowner or a third party. However, surface mining will be prohibited by the easement. Properties where the subsurface mineral rights are owned by a third party are subject to special requirements.
Most, but not all, county farmland protection boards will accept easements on such properties only if:
- The third party mineral owner agrees to prohibit any surface mining; and
- The third party oil and gas owner agrees to construct a maximum number of wellheads as determined by the Board; or
- The probability of surface mining is considered to be extremely unlikely as determined by the Board after consideration of all facts and circumstances. Such considerations shall include, but shall not be limited to:
- Past or current surface mining in the vicinity
- The identity of the third part owner and whether they are still in existence
- The probable extent of such minerals and the resultant financial attractiveness
Can one or two family dwellings be added to the property once the farm is in the program?
If not, how can this be done? Once the landowner has closed on a conservation easement, the property may not be subdivided nor any un-allowed for residences constructed. A landowner may choose to create Retained Development rights on the property before a conservation easement is placed. These allow for a limited number of residential parcels on the property that are part of the easement. The removal of agricultural land from the total acreage may reduce the eligibility of the property or affect the appraisal value
Is land placed under a farmland protection conservation easement open to the public?
No. The sale of development rights does not make farmland public property. The public has no right to access or use a deed-restricted farm without the landowner’s consent. Land protected with a conservation easement under the National Park Service/ American Battlefield Protection Program must be visible from a public road. In both programs, public access to a protected property is not permitted.
Who will oversee the easement?
The county farmland protectionboard is responsible for conducting annual inspections of properties on which it holds an easement to ensure that the property remains protected. It may complete the easement monitoring through its staff, or may subcontract this work through an appropriate agent. Typically the Board schedules a visit convenient for the landowner, and if possible, the landowner accompanies the monitoring staff on the visit.
Where the conservation easement is jointly held by a private land trust (also called the co-holder), the responsibility for the easement monitoring and coordinated enforcement efforts shall be clearly delineated.
What happens if an easement violation is discovered?
In the event of an easement violation, the county farmland protection board would make every attempt to work with the landowner to rectify the problem. In the event that a satisfactory resolution cannot occur, the Board may work through its County Attorney or through private attorneys to meet its perpetual obligation to protect the property.
Easement violations typically occur with owners subsequent to the original owner of the property who enacted the easement. Even though the original landowner enacting the easement has sold or bequeathed the land, subsequent owners are bound by the terms of the easement. The easement is said to “run with the land.”
Questions About Value
How much money can a landowner expect to receive from selling a conservation easement?
A landowner may sell an easement for no more than the value determined by the appraisal. This is generally completed by the farmland protection board through a qualified conservation easement appraiser. The maximum easement value is the difference between the fair market value of the land and the agricultural value of the land.
For example, the hypothetical fair market value of a 100-acre parcel of unrestricted land is $3,000 an acre or $300,000 for the entire parcel. The land is suitable for a housing subdivision and is in an area that is currently being developed. The agricultural value of the land is $1,000 an acre or $100,000 for the entire parcel. The maximum value of the conservation easement on this parcel is $200,000 ($300,000 fair market value less $100,000 agricultural value). Subject to the availability of funds, the owner would be compensated $200,000 for the conservation easement.
The offering price is the amount the landowner is asking to be reimbursed for the sale of the conservation easement to the Farmland Protection Board. The offering price can be the maximum easement value, or it can be some fraction of this value.
What are the tax implications for a landowner placing a conservation easement on his or her property?
Proceeds from the sale of a conservation easement generally are taxed at long-term capital gains rates. Depending upon each individual landowner’s situation, the placement of an agricultural conservation easement on land may provide an income deduction for a donation or bargain sale; property tax benefits under WV law by being designated as agricultural use land; and estate tax benefits for Federal purposes. Landowners are strongly advised to consult a tax advisor and financial advisor to address these questions.