Donating or Selling Your Land to TLC

///Donating or Selling Your Land to TLC
Donating or Selling Your Land to TLC 2016-10-26T18:37:26+00:00

Pond at Abkhazi GardenAs a landowner, you may want to see certain features of your property protected and you may be interested in gifting or selling your land to a land trust such as TLC.  There are a number of different ways that you may go about gifting or selling your land to TLC.

The Land Conservancy is interested in lands and properties that have significant ecological, cultural or agricultural value.  In addition, TLC protects land that has important scientific, recreational, or scenic values.

Some of the different types of property that TLC has protected include ranchland, wetlands, grasslands, old-growth forests, heritage buildings and gardens, recreational trails, eco-forestry sites, and bat houses.

The Process of Property Donation

The process of protecting your property begins with the choice to donate or sell the property to a land trust or other similarly minded organization or donate a conservation covenant. However, there are several steps along the way to consider that will have an impact on how the property is maintained over time and who will have the responsibility of stewardship of the property once it is donated.

For properties donated to TLC, the stewardship responsibility is typically shared between TLC as owner and a conservation covenant holder, usually a local conservation organization. The responsibilities for the owner are laid out in a long term management plan, while the covenant holder is responsible for monitoring the property to ensure that no damage or degradation of the ecological value of the property occurs, as determined by reference to a baseline ecological survey.

In order for the covenant holder to fulfill their duties, it is prudent to set aside money in an endowment fund to cover the costs of annual monitoring and enforcement of the terms of the covenant. TLC suggests an amount of $35,000 be invested in a trust fund managed by a foundation (such as the Victoria Foundation) so the annual interest works out to be roughly $1,000 per year. Another endowment fund for managing the property can also be established and the amount required will depend on the type of property and what are the intended future uses (ie. an eco-forestry site, or a nature sanctuary or public park have different management requirements for trails, maintenance, etc.)

There are also several other one-time up front costs in the process of making a donation of property that an owner is encouraged to include in their budget including, but not limited to, the following:

  1. Conducting a baseline ecological survey to determine what is the ecological status of the property (between $1,000 to $3,000 depending on the size and complexity of the property)
  2. Preparing and registering any legal documents (ie. a covenant, or alternatively a transfer of ownership)
  3. Office administration – a lot of work is spent to make sure the intentions of the land owner are recorded and proper record keeping is maintained
  4. A preliminary site visit by TLC to verify the property’s condition
  5. Preparation of a Management Plan for the future uses allowed on the property (ie. Ecoforestry, or parkland uses)
  6. Commissioning an appraisal (required if you decide to use the Federal Ecogift tax donation program, or if you wish to receive a charitable tax receipt from TLC)

By preparing a budget to establish endowments and to cover the costs of property donation, you can ensure that the stewardship and enhancement of your property will continue in perpetuity and that the property retains its important ecological characteristics.

Donating Your Property

There are a couple of ways that you, as a landowner, can go about donating your property to TLC.

Outright Donation

With an outright donation, you agree to gift your property to The Land Conservancy.  In return for your donation, you will receive a tax receipt for the appraised value of the donation.  If your property has ecological value, you may be able to increase this tax benefit under the Ecological Gifts Program.  For more information on this program, please click here.

Life Estate

By donating a life estate to The Land Conservancy, you (and perhaps your children) retain the right to remain on your property for the remainder of your lives.  Once you are no longer living on the property, it will transfer to TLC.  Usually, a life estate involves certain restrictions on your use of the property.  A life estate may contain some tax benefits depending on the value of the property and the length of time you will remain on the property.  To view a sample life estate agreement, please click here.

You may also wish to make a bequest of land to TLC in your will.  To find out more about bequests, please contact us.

Morning mist on the Horsefly River

Morning mist on the Horsefly River. Photo couresty of C. Iwan

Selling Your Property

Selling your property to TLC can be more complicated than donating because TLC will need to determine if the financial resources are available to purchase your property.  We will also need to undertake an assessment to determine whether or not the property has appropriate values that should be protected – as a charity, we must always be diligent in ensuring that we are working to meet our mandate.

Outright Sale

If you wish to sell your land directly to The Land Conservancy, you will need to determine how much money you wish to receive from the sale of your land.  The best way to do this is through a certified appraiser who can determine the fair market value of your land.  Once you have determined your sale price, TLC staff will need to determine if the resources are available to purchase your land.  Because resources are limited, properties with key values are usually chosen by TLC for outright purchase.

Read the story of Creekside Rainforest.

Bargain Sale

You may wish to sell your land to TLC, but you may not want or need to receive full market value for your land.  With a bargain sale (also called a Split Receipt), you can arrange to sell your land to TLC at a price that is lower than the full market value.  If your sale price is less than 80% of the appraised value, you can receive a tax receipt for the difference.

Read the story of the Valhalla Mile.

Once you have decided to transfer your land, staff from The Land Conservancy will sit down with you and develop a Memorandum of Understanding.  This document will outline the sale or gifting process and the next steps that need to be taken.  To see a sample MOU, please click here.