What is an Easement?
Another effective too is an historic preservation easement, a flexible, negotiated preservation tool that provides perpetual protection of a building. An easement is a legal agreement between a property owner (grantor) and a preservation organization (grantee) that gives the organization the right to monitor and protect the architectural and historical character of the property. The Cleveland Restoration Society (CRS) can be a grantee for an easement.) When granting an easement, the owner agrees not to alter specified portions of the property without permission of the recipient organization. Because the easement "runs with the land," it is binding on all future owners.
Easements are designed to provide the perpetual protection and preservation of significant historic structures. Easements are tailored to each individual property and may cover interiors and/or exteriors, specific features of a building and its setting. Just as every property is unique, so too should be an easement.
How Can My Building Qualify?
Though any historic building can be the subject of a historic preservation easement, the current tax laws restrict charitable deductions for easement contributions to only properties listed on the National Register of Historic Places, either individually or as a contributing building within a historic district. The grantee organization may decline acceptance of an easement for a property where the physical integrity has been severely compromised or where serious maintenance problems are anticipated.
How Does an Easement Work?
The easement is filed with the deed for the property and is perpetual. An easement does not effect zoning regulations and/or ordinances. Grantors must notify all mortgage holders of the proposed easement donation; the easement is filed ahead of the lender’s lien. Because an easement will likely reduce the appraised value of the property, owners should experience a reduction in the property tax assessment. (Note: this may not happen automatically; it may be necessary to request a re-valuation).
What Are the Benefits of an Easement to a Donor?
Donors are usually eligible for a federal income tax deduction equal to the fair market value of the easement. For example, if a property is appraised at $50,000 prior to the donation of the easement and following the easement donation is appraised at $40,000, the owner is eligible for a federal charitable contribution deduction in the amount of $10,000. In some cases, property tax assessments are reduced after donation of an easement, benefiting the donor as well as subsequent owners. An easement may reduce the value of a property owner's estate for federal estate tax purposes. The donor, as well as all subsequent owners, receive technical assistance from CRS. The findings of annual inspections by CRS assist owners with identifying and prioritizing maintenance and provide guidance as to appropriate treatment.
What Are the Obligations of the Owner/Grantor?
The owner is required to meet minimum maintenance standards and seek approval of any proposed alterations and/or additions in advance of commencing work. The grantor and all subsequent owners will be prohibited from demolishing the property, may be limited regarding subdivision of the property and must seek approval from the grantee for alterations.
What Are the Obligations of the Grantee Organization?
CRS is required to make regular inspections, to provide written inspection reports and recommendations to the owner regarding appropriate maintenance, repair and treatment practices. Further, consultation with the grantee is available upon request and as needed, and is not limited to the annual inspection. The grantee assumes responsibility for enforcement of the easement.