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<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>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. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>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:</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>1. as provided in the instrument creating the
easement</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>2. in a proceeding under section 1951 of real property
actions and proceedings law</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>3. eminent domain</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>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. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>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.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=181370617-02082007><FONT face=Arial
color=#0000ff size=2>We will be able to share more once we have a final
draft. </FONT></SPAN></DIV>
<DIV> </DIV><!-- Converted from text/rtf format -->
<P><B><SPAN lang=en-us><FONT face="Arial Narrow" size=2>David M.
Diaz</FONT></SPAN></B><SPAN lang=en-us><BR><I><FONT face="Arial Narrow"
color=#008080 size=2>Conservation Easement Manager</FONT></I><BR><B><FONT
face="Arial Narrow" color=#008080 size=2>Scenic Hudson, Inc.</FONT></B><BR><FONT
face="Arial Narrow" size=2>Tel: 845 473 4440 x223<BR>Fax: 845 473
2648<BR>ddiaz@scenichudson.org </FONT></SPAN><BR><SPAN lang=en-us><B><FONT
face="Arial Narrow" color=#008080 size=2>Your Valley. Your Voice. Your
Future.</FONT></B><BR><FONT face="Arial Narrow" color=#008080
size=2>__________________________________________________________<BR></FONT><B></B><B></B><B><FONT
face="Arial Narrow">SAVE THE DATE</FONT><FONT face="Arial Narrow">—</FONT><FONT
face="Arial Narrow">August 25</FONT></B><BR><FONT face="Arial Narrow"
color=#008080 size=2>Our daylong PARKS FESTIVAL features<BR>morning music on a
mountaintop, a riverside<BR>lunchtime picnic and an afternoon of family
fun.</FONT><BR></SPAN><A href="http://www.scenichudson.org/"><SPAN
lang=en-us><U></U><U><B><FONT face="Arial Narrow" color=#008080
size=2>www.scenichudson.org</FONT></B></U></SPAN></A><SPAN lang=en-us><FONT
face="Arial Narrow" size=2><BR></FONT><FONT face="Times New Roman"
color=#008080>____________________________________________</FONT></SPAN> </P>
<DIV> </DIV><BR>
<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left>
<HR tabIndex=-1>
<FONT face=Tahoma size=2><B>From:</B> hvcatskillcewg-bounces@lists.ltanet.org
[mailto:hvcatskillcewg-bounces@lists.ltanet.org] <B>On Behalf Of </B>Heidi
Bock<BR><B>Sent:</B> Thursday, August 02, 2007 11:15 AM<BR><B>To:</B>
hvcatskillcewg@lists.ltanet.org<BR><B>Subject:</B> [Hvcatskillcewg] Merger of
Title<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV class=Section1>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Hello
All,<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">A question of interest has come up
here at CLC and I was wondering if there is any insight out there about
it<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Here’s the scenario put forth by our
land protection folks: <o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">“Some nice wealthy landowner donates
a conservation easement to a Land Trust in <st1:place w:st="on"><st1:PlaceName
w:st="on">New York</st1:PlaceName> <st1:PlaceType
w:st="on">State</st1:PlaceType></st1:place> and thus benefits from a substantial
charitable deduction.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Land Trust records said easement and
goes about its business.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Nice landowner kicks the bucket and
bequeaths the property subject to the easement to the same Land
Trust.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">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.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">The Land Trust could now sell the
property for its full fair market value, unencumbered by a conservation
easement?<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">But how can this be? Conservation
Easements are granted in perpetuity.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">The original deed of conservation
easement is still gumming up the land records (no release or cancellation is
filed).<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Donating a conservation easement
does not bank development rights with the land trust – those development rights
are extinguished.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">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.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">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.”<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Any thoughts, suggestions,
comments…<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">Thanks,<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">~heidi <o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face=Arial size=2><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN
style="FONT-SIZE: 12pt"><o:p> </o:p></SPAN></FONT></P></DIV></BODY></HTML>