Frequent Questions & Answers:
- What is an easement?
- What are the benefits of donating a preservation easement donation?
- How is the value of the easement determined?
- Which properties qualify?
- What are the costs involved with donating an easement?
- How are the terms of the easements enforced?
- What changes can be made to the building after an easement is recorded?
- Who is qualified to accept preservation easements?
- How many easement properties does Pasadena Heritage manage?
- How do I donate a preservation easement to Pasadena Heritage?
- Where can I learn more about preservation easements?
What is an easement?
An easement is a voluntary legal agreement attached to the property deed that “runs with the land.” It protects an historic property by restricting the changes that can be made without the approval of the preservation organization that holds the easement.
Owners of historically significant properties can donate a preservation easement to a qualified charitable organization, such as Pasadena Heritage. An application process is required (see below) to determine the easement terms and the features to be protected before the easement is recorded at the County Recorder’s Office.
What are the benefits of donating a preservation easement donation?
There are two reasons to donate an easement. The first reason is to protect the valuable historic and architectural qualities of a property for the enrichment and enjoyment of future generations. Because the easement is attached to the property deed, you can be assured that the building will be closely monitored and protected forever.
The second reason is tax benefit. By agreeing to restrict changes to the physical appearance of the property, the owner is changing the market value of this property. Because demolition is prohibited under an easement, the owner is forfeiting development potential as well. The difference between the fair market value before and after donation of the easement is the easement value. This difference is considered to be a charitable tax deduction, which reduces the owner’s tax liability.
How is the value of the easement determined?
The valuation of the easement must be made by a professional real estate appraiser who will consider the value of the property before and after donation of the easement. The Internal Revenue Service has audited easement appraisals, and as with any charitable gift, it is important to obtain a knowledgeable and qualified appraiser.
Which properties qualify?
In order to qualify for easement tax benefits, a property must be listed on the National Register of Historic Places, which is a federal government listing of historic properties.
A building may either be listed individually or be located within a National Register Historic District. If located within an historic district, it must be certified by the Secretary of the Interior as a “contributing” building in the district.
Under special circumstances, Pasadena Heritage will consider accepting easements on buildings not listed on the National Register, however no tax benefit can be realized on non-listed properties.
What are the costs involved with donating an easement?
An application fee must be submitted with the application in addition to a one-time endowment donation to help cover the cost of administering, monitoring and enforcing the easement in perpetuity. The amount of this donation is determined by several factors, including the size, nature and complexity of the property and the valuation of the easement.
How are the terms of the easements enforced?
Pasadena Heritage regularly inspects our easement properties, typically once a year. The purpose of the easement inspection is to insure that the building is being properly maintained.
The easement agreement contains a section entitled “Remedies” which deals with the steps that may be taken should the property owner not abide by the terms of the easement.
What changes can be made to the building after an easement is recorded?
If an owner wishes to make any changes to the building’s features that are covered under the easement (most commonly the exterior facades and visible portions of the roof), the owner must notify Pasadena Heritage in writing.
Pasadena Heritage evaluates any proposed alterations using criteria set forth by the “Secretary of the Interior’s Standards for Rehabilitation for Historic Buildings,” which are the national historic preservation standards.
Who is qualified to accept preservation easements?
Simply put, a qualified organization is a nonprofit, publicly-supported organization committed to the preservation of historic and architectural heritage. Pasadena Heritage is a qualified charitable organization and has operated an easement program since 1980.
How many easement properties does Pasadena Heritage manage?
We currently hold more than 85 easements, most of them within Pasadena city limits. About half of these are commercial buildings, many of which are located in the Old Pasadena Historic District.
How do I donate a preservation easement to Pasadena Heritage?
For more information on how to set up a preservation easement, please contact the Preservation Director at Pasadena Heritage. A copy of our Application Form and Checklist can be downloaded here.
Where can I learn more about preservation easements?
The National Trust for Historic Preservation has an excellent summary of Preservation Easements.
The National Park Service published an informational brochure in 2010 on easements as a preservation tool and tax incentive.
Appraising Conservation and Historic Preservation Easements is a guide published in 2011 by the Appraisal Institute.
The Land Trust Alliance published the comprehensive Conservation Easement Handbook, 2 ed. in 2005.