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From Handshakes to Handwriting

Approving Easement-Permitted Activities

Over the years, land trusts have acquired thousands of conservation easements protecting properties too numerous to count. To maintain the vitality of these interests, land trusts have had to expand their duties beyond planning and acquisition to enforcement and compliance. Consequently, the informal partnerships enjoyed by many land trusts and easement donors have in many cases given way to more formal relationships, especially as property owners and land trusts staffs have changed over time. Often, servient estate holders will find it necessary to seek permission from the land trust to undertake activities requiring approval under the easement agreements. Approval or denial of these requests requires the land trust's careful consideration in order to avoid adverse consequences.

As a general rule, courts will adhere to the language and intent expressed in the instrument creating the conservation easement to determine what acts of the servient owner are allowed. Nonetheless, even where the instrument and the intentions of the parties are clear, courts acting in equity have recognized equitable defenses such as estoppel and waiver to set aside development restrictions imposed by negative easements. To avoid this result, a land trust should establish procedures that proscribe or permit a servient owner's actions in an even-handed, non-capricious and reasonable manner.

Two cases drawn from the the field of historic preservation illustrate these principles. The first examines the reasonableness of an easement-holding organizations's approval actions; the second considers the ability of the easement holder to address actions inconsistent with the intent of the easement. Together, they provide valuable insights into the scope of conservation easements.

In an action arising from the violation of historic preservation covenants, a New Hampshire superior court granted injunctive relief to the plaintiff, Historic Harrisville, Inc., a non-profit organization and holder of the convenants, and ordered the servient owner and defendant, Peter Temple, to remove a barn constructed without the organization's approval. Historic Harrisville, Inc. v. Temple, No. 91-E-148 (N.H. Super. Ct. Nov 18, 1993) (unreported opinion described in Anon., "New Hampshire and District of Columbia Courts Enforce Conservation Easements," 12 Preservation L. Rep. 1183 (1993)). In 1978, Temple purchased property subject to a restrictive covenant recorded with the Registry of Deeds seven years earlier. The covenant proscribes owners subject to the covenant from "'mak[ing] or permit[ting] any Environmental Change in any Property without the prior written consent of Historic Harrisville, Inc.'" Id. at 1184. Environmental changes, as defined by the instrument, included "any material change in the Exterior Architectural Features of any Structure situated on the Property, [and] any demolition, removal or construction of any Structure situated on the Property…" Following the sale, Temple applied for and received approvals for five environmental changes to his residence. When Temple commenced construction of the barn in 1991, however, Historic Harrisville had not authorized the building nor had Temple filed an application for its approval.

The court considered and rejected two defenses raised by Temple. First, Temple claimed that he did not have actual knowledge of the restrictions until he read his deed in 1991, the time of the litigation. Nonetheless, since record notice had occurred, the court concluded that the covenant was enforceable in equity and gave no effect to this claim nor to the assertion that Temple's neighbors had led him to believe the covenants applied only to his house. The court also rejected Temple's argument that Historic Harrisville had acted unreasonably by not enforcing its covenants uniformly and, due to his reliance interest, the organization should be estopped from enforcing the covenant. The court reached this conclusion after reviewing the approval procedures employed by Historic Harrisville.

Although Historic Harrisville had acted on applications somewhat haphazardly, the court noted that the organization's initial treatment of applications provided a sufficient foundation for its decision to withhold approval. Specifically, the court observed that Historic Harrisville consistently required servient owners to file an application formally requesting permission before changes were made. Soon after learning of Temple's construction activities, Historic Harrisville sent several letters warning him to "'cease construction' and indent[ying] specific items required for consideration of a 'belated application.'" Id. at 1185. Temple eventually complied with the application requirement after-the-fact. Nonetheless, after meeting to consider Temple's actions, the organization decided to deny the application and thereafter notified Temple in writing of its decision, identifying "the reasons for denial, including siting, size, materials, and detailing" and enclosing a copy of the meeting minutes pertaining to his application. Id. at 1186. In addition, the letter invited Temple to resubmit his application and "'to renegotiate a means of approving the barn.'" Id. The court downplayed the fact that "'some applications [had] been approved orally' while 'others [had] been considered by a single person' and that the organization had previously approved similar changes including skylights and decks that would otherwise 'be considered historically inappropriate.'" Id. Given this review of Temple's request, the court concluded that "Historic Harrisville had acted 'reasonably and not arbitrarily' in seeking to enforce the restrictions." Id. at 1185.

The Temple holding suggests that decisions supported by uniform procedures and affording a reasonable opportunity for review will withstand judicial scrutiny. The court also determined that an organization's prior decisions with respect to third parties did not create an expectation of approval in the instant case. Rather, so long as independent grounds for each decision existed, the organization had met its standard of review (even if a decision inconsistent with its overall purpose ensues).

In another enforcement case, a D.C. superior court considered a plat of subdivision (or approval for the assembly of land) obtained by the defendants without the approval of the easement-holding organization. Foundation for the Preservation of Historic Georgetown v. Sagalyn, Civ. Act. No. 90-CA101164 (D.C. Super. Ct. Nov. 29, 1993) (described in 12 Preservation L. Rep. at 1183). Before obtaining the plat, the Sagalyns, the purchasers of an easement-protected carriage house in Georgetown, had applied to the Foundation for the Preservation of Historic Georgetown (the "Foundation") for permission to construct an addition to their home. The Foundation rejected the application, reasoning that the scenic, open space, and architectural facade easement encumbering the property did not allow the extension of the residence nor the erection of additional structures. Despite this denial, the Sagalyns applied for and received a plat of subdivision from the city with the Foundation's knowledge. Presumably, the assembly plat would create one record lot, a prerequisite for a building permit to build an addition to a structure covering multiple lots (as was the case with the carriage house).

Although the easement did not directly proscribe the act of assembly, the court interpreted the language of the instrument in favor of the Foundation's position. As recorded, the easement prohibited "the extension of the existing building into presently open space…the erection of additional structures on the historic property, and any subdivision of the record lots which comprise the historic property." The court found support for the Foundation's position from circumstances surrounding the agreement as well as language in the instrument expressing the intent of the contracting parties. From this analysis, the court concluded that the common meaning given "subdivision" in the agreement included the act of assembly as well as division. The court also observed that "its interpretation of the term 'subdivision' was consistent with the purpose of the easement, namely to preserve the property 'as is.'" Id. at 1188. Thereafter, the court ruled that the easement precluded the plat of assembly and ordered the Sagalyns to "'take such steps as are necessary to vacate or rescind the subdivision plat.'" Id.

When the Sagalyn court looked to the parties' intentions when considering the scope of the conservation easement, reasonable expressions of those intentions helped extend the authority of the easement to underlying actions. In this case, the easement itself described the Foundation's intent to preserve the integrity of the "architectural ensemble" of the historic district. Id. As repeated in the Foundation's letters to the servient owner, this rationale provided ample authority for the imposition of restrictions on the servient owner's plat of subdivision.

Another issue raised in the context of the Sagalyn's litigation involved the city's responsibilities under the easement. Pursuant to its approval of a building permit as well as a plat of subdivision, the District of Columbia asserted that administrative agencies are not required to consider conservation easements in their review. This assertion begs the question that arises within the context of easement-permitted prohibited activities, i.e., when regulated by federal, state, and local laws, does an easement remain effective? Since a conservation easement amounts to a private interest in land whose covenants, conditions, and restrictions may fall subject to government regulation, laws foreclosing private agreements from imposing conflicting restrictions will control. Thus, the terms of an easement outlining activities for which the land trust reserves its approval must accede to applicable laws and regulations. However, to the extent the law does not foreclose private agreements, easement-imposed restrictions more stringent than those required by law may remain valid. Such a result arises from practical concerns that a land trust, when acting as a proprietor, may have good reason to protect itself from liability resulting from the actions it authorizes and to preserve the permanent character of a restriction deeded in perpetuity.

Within the framework suggested by the cases above, much flexibility exists for the land trust to organize its approval procedures. Questions such as who will undertake and document the approval decision—whether a staff member or the board—will depend on the complexity of the request and the sophistication of the decision makers. The degree of formality required by the approval/denial also hinges on that determination. Some responses may be reduced to simple form letters that authorize (or deny) various activities. Others should take the form of recorded agreements outlining duties and responsibilities. The easement-holding organization should avoid oral agreements as the Statute of Frauds may bar such communication as evidence relating to interests in land. Additional conditions placed on a grant of approval should withstand scrutiny so long as conditions do not exceed the scope of the conservation easement. Throughout this process, the land trust should set forth uniform procedures that yield reasonable, non-arbitrary decisions. In the worst case, the absence of such formalities may contribute to a finding of estoppel or waiver, effectively lifting the easement's restrictions.

Monitoring compliance with conservation easements can be a tedious but necessary part of a land trust's program. The foregoing sketches the legal issues arising from a land trust's duty to harmonize requests to undertake activities on easement protected land with the requirements of the easement agreement. As the land trust movement matures, the pressures of development will continue to test its resolve. To that end, the organization should be wary of becoming a careless, toothless permit factory and remain faithful to its stated goals.

Pay, Geoffrey. "From Handshakes to Handwriting: Approving Easement-Permitted Activities." The Back Forty. Nov./Dec. 1996: 12-14. Print.