[Hvcatskillcewg] Merger of Title

[David Diaz]

We hired an attorney to review the extinguishment issue as it relates to
both merger of title doctrine and when the easement has specific provisions
for it.  We have just received a draft legal opinion.  
 
The prelim conclusions are that merger does not happen when fee and CE are
held by the same entity.  NYS Conservation law outlines the situations where
extinguishment may occur, they are:
 
1. as provided in the instrument creating the easement
2. in a proceeding under section 1951 of real property actions and
proceedings law
3. eminent domain
 
It does not include any situations when a party with a the greater interest
(fee) acquires the lesser (CE).  The laws governing CE's were created to
ensure a "more durable" system than previous covenants and common law.  
 
However, there is no case law that confirms that the operation of merger of
title doctrine does not apply with CE's.  I think it could be assumed that
it would because of the specificity and intent of CE law.
 
We will be able to share more once we have a final draft.     
 

David M. Diaz
Conservation Easement Manager
Scenic Hudson, Inc.
Tel: 845 473 4440 x223
Fax: 845 473 2648
ddiaz at scenichudson.org 
Your Valley. Your Voice. Your Future.
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From: hvcatskillcewg-bounces at lists.ltanet.org
[mailto:hvcatskillcewg-bounces at lists.ltanet.org] On Behalf Of Heidi Bock
Sent: Thursday, August 02, 2007 11:15 AM
To: hvcatskillcewg at lists.ltanet.org
Subject: [Hvcatskillcewg] Merger of Title



Hello All,

 

A question of interest has come up here at CLC and I was wondering if there
is any insight out there about it

 

Here's the scenario put forth by our land protection folks: 

 

"Some nice wealthy landowner donates a conservation easement to a Land Trust
in New York State and thus benefits from a substantial charitable deduction.

Land Trust records said easement and goes about its business.

Nice landowner kicks the bucket and bequeaths the property subject to the
easement to the same Land Trust.

Presto!  Merger of Title - the same entity cannot hold both the fee
ownership and conservation easement on the same property so the easement
miraculously disappears.

The Land Trust could now sell the property for its full fair market value,
unencumbered by a conservation easement?

 

But how can this be? Conservation Easements are granted in perpetuity.

 

The original deed of conservation easement is still gumming up the land
records (no release or cancellation is filed).

Donating a conservation easement does not bank development rights with the
land trust - those development rights are extinguished.

I don't think the IRS would be very happy to grant a substantial charitable
deduction on a gift of real estate, just to have that valuable real estate
reconstitute itself in a few years time and start all over again.

 

It seems to me that Merger of Title is really an issue of how to deal with
the legal complexities during a presumably temporary period of fee and
easement ownership under a single entity.  To consider Merger of Title as an
automatic cancellation of a conservation easement threatens the very
principles of perpetuity and the extinguishment of development rights that
are the bases of a land trust's land conservation program."

 

Any thoughts, suggestions, comments.

 

 

 

Thanks,

 

~heidi 

 

 

 

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