My property is already protected against changes by future owners through a local preservation law . . . wouldn’t an easement be redundant?
Updated 2/21/2008Preservation easements and local historic preservation laws are two distinct legal tools that may be used to protect historic properties and districts – the first uses private legal rights and the second uses local governmental regulatory powers.
In many situations, preservation easements are granted on historic properties that are not covered by local historic preservation laws. Preservation easements on these types of properties are often the only significant preservation protections that apply, and may therefore be the only protection prohibiting demolition or other damage to the historic building.
In other situations, easements are granted on properties that are already subject to local historic preservation laws. If the local preservation law is weak and the easement strong, the easement may provide more protection than the local law: for example, the local law may authorize the municipality to delay but not prohibit a proposed demolition of a historic property, while the easement may absolutely prohibit demolition. Even in the case of a strong preservation law, an easement may include terms that go well beyond the requirements of that law. For example, some preservation easements protect interior architectural features (a restriction that is rarely imposed under local preservation laws); they may also require public visitation (an obligation not required by local preservation laws); others may prohibit construction on double lots, or eliminate subdivision, or other development rights that may exist under local zoning.
Where easements impose requirements that are substantially similar to local preservation laws, they may still provide an important public benefit. Although local preservation laws have rarely been repealed or overturned in their entirety, it is not unheard of for the historic designation of individual properties – or even entire historic districts – to be withdrawn by a municipality facing a threat or court challenge by a developer, or based on the persuasion of a politically powerful force. Even strong local preservation laws often include variance provisions, exceptions for cases of economic hardship, or “special merit” exceptions – regulatory loopholes that occasionally are utilized by owners of historic properties to allow development that would not otherwise be permitted under the local preservation law. In cases like this, easements may serve as an important “back-stop” to local preservation laws.
It is important for easement donors (and their appraisers) to recognize, however, that the existence of local preservation laws that already protect a historic property must be considered in the valuation of the easement in calculating the federal income tax deduction. The applicable IRS regulations state explicitly that the determination of value of a preservation easement must take into account “any effect from . . . historic preservation laws that already restrict the property’s potential highest and best use.” Although the impact of an easement donation on market value obviously depends on the circumstances of any particular case, façade easements that do little more than replicate the restrictions of already applicable local historic preservation laws are less likely to have a large impact on the market value. This is particularly likely to be the case in historic residential areas subject to strict design review controls under a local preservation ordinance.
