Understanding Farmland Easement Agreements
Farmland Easement Agreements offer farmers and other farm owners a tangible way to protect their land for farming, for future generations.
Farm families can partner with land trusts, like the Ontario Farmland Trust, to establish easement agreements that ensure their farmland will never be converted to urban sprawl or some other non-agricultural use in the future.
The following outlines the key, basic things you should know about farmland easement agreements. Click on each topic below for more details.
A Farmland Easement Agreement:
A farmland easement agreement is the strongest tool available to a private farm owner who wants to protect their land in the long-term. It is a private, legal contract that is negotiated between a willing property owner and a qualified easement-holding organization, and then registered on property title. Once registered, the easement stands in perpetuity and applies to all current and future owners of the farm.
Farmland easement agreements contain provisions that provide for the protection of farmland by limiting, or restricting, land uses that are not compatible with agriculture, like housing subdivisions, aggregate pits and quarries, and golf courses. Any land use restrictions in an easement agreement are developed cooperatively between the farm owner and the easement-holding organization to ensure that a shared vision for long-term protection of the land is clearly articulated.
A farmland easement agreement can be used to protect an entire farm property or only a limited area of a property. It can also be adapted to protect forests and wetlands in perpetuity, in addition to agricultural areas.
Farmland easement agreements give farm owners the ability to protect their land without giving up ownership of their property. They continue to have the right to sell their land or pass it on to the next generation. Easement agreements also do not put restrictions on normal farm practices and are designed to support a wide range of farm types and agricultural uses.
Farm families have the choice of entering into farmland easement agreements with the Province, a municipality, a conservation authority, or a registered land trust, like the Ontario Farmland Trust, to protect their land. Many private landowners are motivated to work with land trusts, which are separate from government and can have a stronger mandate for the permanent protection of farmland.
A farmland easement agreement introduces a perpetual relationship between the farm owner and the easement-holding organization. The easement holder has a responsibility to meet with the current and future owners, usually once per year, to verify that the easement conditions continue to be honoured. If the agreement is deliberately breached by an owner, the easement holder is obligated to take legal action to uphold the easement agreement and defend the protected farmland.
Farmland Easement Agreements in Ontario are enabled through the Conservation Land Act. This Act is independent and separate from the Conservation Authorities Act, and the two should not be confused. The Conservation Land Act was created specifically to support landowners who desire to work with eligible easement-holding organizations to protect their land with easement agreements, including easements “for the conservation, preservation or protection of the land for agricultural purposes.”
Farmland easement agreements do not require planning approvals from government and can be pursued independently by farm owners and easement-holding organizations. If a protected easement farm is currently designated in municipal or provincial plans for a non-agricultural use, or receives such a designation in the future, the non-agricultural use remains prohibited because of the permanent easement agreement on title.
Once a farmland easement agreement is registered on title it is difficult to modify. Changes may be possible by mutual agreement of the farm owner and the easement-holding organization. Any amendment, however, must demonstrate enhanced protection of the land and requires approval of the Ontario Minister of Natural Resources and Forestry.
Farmland easement agreements can impact property value. An appraisal is conducted as part of the easement process to measure any potential reduction in market value that may be caused by the agreement. If there is negative impact, farm owners are compensated with a charitable tax receipt from the easement holder for the difference in value. Additional benefits such as capital gains tax reduction may also apply. It is important that landowners engage a farm accountant to help them maximize financial benefits as part of their farm business, farm succession and estate planning. Read more here.
Every farm property is unique. Every farm business, fiscal, and family situation is different. For these reasons, no one farmland easement agreement is identical, and each agreement is tailored to the land protection interests and needs of each interested farm owner. Farm owners should seek the support of professional farm advisors (eg. accountants, lawyers, financial planners) throughout the easement process to understand how easement agreements best fit into their broader business, farm succession and tax planning.
It can take a year or more to complete a farmland easement agreement. It is important for farm owners to plan in advance and leave a generous amount of time for consulting with their advisors, and negotiating the easement process with the easement-holding organization. Timing also may be dependent on fundraising by the easement-holding organization to cover project costs.