Conservation Easement Appraisals

A conservation easement is an exclusive legal agreement which runs in perpetuity with a property's title, protecting the land from development for preservation, conservation and wildlife habitat while retaining private ownership.  To purchase conservation easements most organizations use a combination of donated funds and local, state and federal agencies that all benefit from the easement.  To receive the funding from a public lending entity, the Appraisal needs to conform to the agency’s specific regulations.  There are several types of appraisals used to meet these regulations. 

Farm and Ranch Lands Protection Program (FRPP) – A voluntary program that helps farmers and ranchers keep their land in agriculture.  The program provides matching funds to Sate, Tribal, or local governments and non-governmental organizations with existing farm and ranch land protection programs to purchase conservation easements.  This type of appraisal is utilize when the subject is used for agricultural purposes.

Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) - This type of appraisal is used when the purchaser of the easement is seeking federal funds. Certain state entities apply for this program, including Land for Maine’s Future.  There are several specific requirements when writing a report to this standard, including, the “larger parcel” rule which states an appraiser must give consideration to contiguity (parcel configuration), unity of ownership and unity of highest and best use.

IRS Appraisal – This type of appraisal is required when donating a conservation easement with the intention of claiming a tax deduction.  There are several rules the donating entity and appraiser must follow:

·         The donating entity has to file IRS form 8283 and have a copy of the appraisal to claim the deduction;

·         The date of valuation can be no more than 60 days before you convey the conservation easement; and

·         Larger parcel rule – All real estate in the area owned by the donating entity and their family must be considered within the appraisal.

Amidon Appraisal company has years of experience providing valuation services in these three specific reporting formats.