Tuesday, April 23, 2024

Legal Issues with Land Trusts: What Uses are Permitted on the Land?

With an increased interest in conservation and land preservation, the use of legal tools like land trusts and conservation easements have grown in popularity. Specifically, nonprofit land trusts which typically act as a 501(c)(3) organization for the purpose of preserving and conserving open spaces like historic buildings, farmlands, or wildlife habitats, have gained traction. As discussed in the first article of this series, a nonprofit land trust is a private organization that can operate on a national, regional, or local level and preserves open space through tools like conservation easements or restricted deeds. This is part two of a series of articles discussing the legal challenges that can arise with nonprofit land trusts.

A nonprofit land trust will retain a property right in land through conservation easements or restricted deeds. These legal tools allow it to restrict or permit certain uses on the land. With a conservation easement, a nonprofit land trust will not outright own the land but will retain a right to prohibit the landowner from engaging in certain activities on the land. With a restricted deed, the nonprofit land trust obtains the land either through donation or purchase, and the land will be subject to the restricted covenants found in the deed prohibiting certain uses of the land. For example, a land trust created for the purpose of conserving a wildlife habitat which holds a conservation easement on a parcel of land, might have language in their agreement that prohibits the landowner from engaging in profit-generating activities on the land, such as horseback riding lessons. Similarly, a land trust with the purpose of preserving a historic site might have accepted a donated parcel of land with a deed containing a covenant restricting the property from being developed into a residential neighborhood.

Typically, the permitted and prohibited uses will depend on both the nature of the land and the land trust’s goals, and the land trust’s deed or agreement with the landowner will usually define which uses are allowed. Though permitted and prohibited uses are generally stated, there are instances where the allowed uses were considered unclear, and courts were asked to make distinctions. The remainder of this article will review a few of these instances.

Agricultural Structures

One of the biggest questions related to nonprofit land trusts created for the purpose of preserving agricultural land is the question of what constitutes agricultural use. Many of these land trusts will have a conservation easement agreement with property owners that prohibits development on the property but makes an exception for agricultural uses or development of farm buildings. However, the definition of agricultural uses is not always clear cut and can be fact specific. For example, in Virginia, a land trust sued a property owner when the language of their conservation easement agreement stated “farm buildings or structures” as an exception to a no build provision, and the property owner constructed a building to store and sell wine, to process and sell cheese, and to make and sell bakery products. Wetlands Am. Tr., Inc. v. White Cloud Nine Ventures, L.P., 291 Va. 153, 167, 782 S.E.2d 131, 139 (2016). Here, the court looked at the Virgina building code and the Webster dictionary definition of “farm building” to determine the property owner’s intended use of the building for production, preparation and marketing of agriculture products falls under the agreement’s definition. Id. Similarly, a New York state court found that a property owner’s construction of a barn and access road to the barn did not violate the conservation easement agreement between the property owners and a land trust because the purpose of the easement was to conserve and enhance agricultural uses. Orange Cnty. Land Tr., Inc. v. Tamira Amelia Farm, LLC, 141 A.D.3d 632, 634, 34 N.Y.S.3d 618, 620 (2016).

Conversely, the U.S. Court of Appeals for the Sixth Circuit affirmed that property owners with a conservation easement violated their agreement that required the owners to maintain the property “substantially undisturbed in its natural condition” by filling in a sinkhole with 6,269 cubic yards of fill material. Nature Conservancy, Inc. v. Sims, No. CIV.A. 07-112-JMH, 2009 WL 602031, at *3 (E.D. Ky. Mar. 5, 2009), aff’d, 680 F.3d 672 (6th Cir. 2012). Here, the court found that the filling of a sinkhole did not conform with the “agricultural uses” provision of the easement agreement because it was not an action necessary for the growing of crops. Id.

Commercial Activities

Certain commercial activities have also led to disagreements between nonprofit land trusts and landowners. While nonprofit land trusts might allow landowners to create features on a parcel of land that can be used by the public, such as hiking paths or nature trails, nonprofit land trusts tend to be more skeptical about profit-generating uses. In Maine, a court determined that the conservation easement between a property owner and a land trust did not include permitting the property owner to use land for fee-generating activities like horseback riding lessons, wagon rides, horse-drawn sleigh rides, hiking, and snowshoeing under its authorization of “residential recreational use.” Windham Land Tr. v. Jeffords, 2009 ME 29, ¶ 35, 967 A.2d 690, 701. Here, the court determined that “residential” referred to “those who are regularly living at that locale,” and the use of land for profit-generating activities violated the easement’s intent to preserve the land’s “natural scenic condition.” Id.

Profit-generating activities could also include a landowner’s decision to rent a structure on the premises. In Massachusetts, a court determined that landowners who own a retreat center on the coast of Duxbury Bay with a conservation restriction enforced by a nonprofit land trust were not breaking their easement by renting the retreat out to businesses and families. Wildlands Tr. of Se. Massachusetts, Inc. v. Cedar Hill Retreat Ctr., Inc., 98 Mass. App. Ct. 775, 784, 160 N.E.3d 297, 304 (2020). Here, the land trust sought to stop the landowners from renting to businesses and families because it believed the language of the agreement only allowed the retreat to be rented for “classes, conferences, and retreats for purposes consistent with the conservation purposes;” however, the court disagreed stating that the language of the agreement permitted rentals so long as they did not “materially impair or harm the premises or the conservation interests.” Id.

Residential Developments

Some parties have also litigated whether building a residential structure violates a trust agreement. In Wyoming, the state supreme court found that landowners were not able to build a guest house or a caretaker’s house as “associated improvements” to a single-family residential structure when their conservation easement agreement with a nonprofit land trust defined “associated improvements” as “barns, garages, shops, greenhouses, storage sheds, and corrals.” Four B Properties, LLC v. Nature Conservancy, 2020 WY 24, ¶ 5, 458 P.3d 832, 843 (Wyo. 2020). Here, the court determined the agreement’s definition of “associated improvements” was unambiguous because the agreement distinctly permitted one single-family residential structure, and “associated improvements” was defined using examples that do not include a residential meaning. Id.

Developments on Neighboring Properties

A question that might arise for a property owner with land in a land trust, is whether they can restrict the land trust’s development of other properties. Generally, a landowner with a conservation easement possessed by a land trust does not have standing to challenge the decisions the land trust makes about developments on property the landowner does not own. In Estate of Robbins v. Chebeague & Cumberland Land Trust, the Supreme Court of Maine determined that a property owner with land burdened by a conservation easement does not have standing to bring a claim enforcing the terms of the conservation easement on land they do not own. 2017 ME 17, 154 A.3d 1185.

Conclusion

A land trust is a nonprofit organization that uses legal tools like conservation easements and restricted deeds to protect land for conservation and preservation purposes. While most land trust agreements will define what uses are permitted and prohibited on the land, courts have stepped in to determine meaning in cases of ambiguous terms such as agricultural uses, commercial activities, and residential developments. 


This is part two of a series on land trusts from the National Agricultural Law Center.

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