Easement Program

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   • Sample Easement Deed

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   • Closing Checklist

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Donation Process

The historic preservation easement donation process can be divided into five steps:

1) Submit Preservation Easement Application Form;

2) Obtain Certified Historic Structure Designation;

3) Subordinate Mortgages;

4) Perform Real Estate Appraisal; and,

5) Convey Preservation Easement.

Before proceeding with a preservation easement donation, potential easement donors are always advised to consult with their attorneys and tax professionals to understand the specific legal requirements and tax consequences associated with conveying a preservation easement and receiving a tax deduction.

1) Submit Preservation Easement Application Form

The historic preservation easement donor submits the completed 2-page Preservation Easement Application (Adobe Acrobat - Download - MS Word) to the Preservation Easement Trust. Then, the application is promptly reviewed and, if approved, the easement donor is sent an Easement Donation Instructional Package, which includes an Acceptance Letter that must be signed by the easement donor and returned to the Preservation Easement Trust.

2) Obtain Certified Historic Structure Designation Back to top

To qualify for a historic preservation easement donation and its associated federal tax benefits, a property must be either a certified historic structure or historically important land area. A certified historic structure is a building or structure that is either individually listed in the National Register of Historic Places or deemed to be contributing to the historic significance of a National Register historic district or a certified local historic district. So, if a building or structure is not a certified historic structure, a certified historic structure designation must be obtained by submitting an application to the National Park Service, a division of the U.S. Department of the Interior.

The certification process of historic structures is administered by the State Historic Preservation Office (“SHPO”) and requires approval from the National Park Service (“NPS”). Historical property information and photographic images are used to justify the historic significance of the property. Specifically, if the building is located within a qualifying historic district, the easement donor must submit the Historic Preservation Certificate Application Part 1 - Evaluation of Significance; otherwise, the easement donor must submit a National Register of Historic Places Registration Form. While both the SHPO and NPS review the applications, the SHPO provides advice and comment and the NPS makes the actual certification decision. In many cases, the easement donor engages an experienced historic preservation consultant who prepares the NPS application. Upon request, Preservation Easement Trust can provide a list of experienced historic preservation consultants.

3) Subordinate Mortgages

If the easement donor wishes to utilize the tax deduction benefit associated with a historic preservation easement donation, all mortgages (and other encumbrances) must be subordinated to the preservation easement. The mortgage lenders are required to subordinate their rights in the property to the rights of the easement holder, so that in the event of a foreclosure, the preservation easement will not be extinguished. Therefore, if a mortgage exists, a subordination application with a copy of the Preservation Easement Deed must be submitted to each mortgage lender for its approval.

4) Perform Real Estate Appraisal Back to top

The preservation easement donor engages a qualified real estate appraiser to perform the appraisal which must be prepared no earlier than 60 days prior to the preservation easement donation date but no later than the due date (including extensions) of the income tax return in which the charitable deduction is first claimed. The value of the preservation easement donation is usually determined by applying the "before and after" valuation approach. Performed by a qualified real estate appraiser, the amount of the charitable deduction is computed by determining the difference between the fair market value of the property before the granting of the preservation easement and the fair market value of the property after the granting of the preservation easement. To facilitate the appraisal process, the Preservation Easement Trust can provide a list of real estate appraisers with preservation easement valuation experience.

Because each preservation easement valuation depends upon a number of variables that are unique to each property, including existing historic preservation laws that may already impact the property, there is no "one size fits all" approach to valuing preservation easements. For example, the valuation for a facade preservation easement typically ranges anywhere from 5% to 15% of the historic structure’s fair market value. Whereas, the valuations for development rights and interior space preservation easements do not fall within any typical range and, thus, can vary even more significantly from property to property.

5) Convey Preservation Easement

Once all of the aforementioned steps have been completed as well as several additional items listed on the Closing Checklist, the easement donor is sent an Easement Donation Closing Package. To initiate the closing process, the easement donor sends the notarized Preservation Easement Deed with the tax-deductible charitable cash contribution to the Preservation Easement Trust. In return, the Preservation Easement Trust provides a completed IRS Form 8283 that the easement donor attaches to the income tax return for the year in which the preservation easement is contributed and a deduction is first claimed. Lastly, the Preservation Easement Trust records the Preservation Easement Deed with the county or town land records office and forwards a copy to the easement donor and mortgage lender(s).



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