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How-To: Protect Your Historic House with a Preservation Easement

Photo by Rob Kearns

There are a number of ways to provide for the future protection of historic properties such as those designed by Frank Lloyd Wright. The most common way is through the designation of the property as a local landmark. While many local historic preservation ordinances have strong protections, the level of those protections can vary between municipalities, and political pressures can influence the degree to which they are followed. Listing on the National Register of Historic Places is an important recognition of a building’s significance, but carries very limited protections.

The surest way to protect a site in perpetuity is through a preservation easement.

When a property owner grants a preservation easement, he or she is conveying to a qualified easement holder, such as the Frank Lloyd Wright Building Conservancy, the owner’s traditional rights to demolish or significantly alter the premises, or subdivide the property. This is done in order to preserve the property’s historic character for all time. The restrictions of the easement are binding on all future owners of the property.

The Frank Lloyd Wright Building Conservancy holds several easements on Wright properties around the country. We are happy to work with owners who wish to donate an easement to the Building Conservancy, or to facilitate the donation of an easement to another qualified 501(c)3 charitable organization.

Since these are valuable property rights, their conveyance can be considered a charitable contribution. However, due to the complexity of the current IRS regulations and the risk of the property owner being audited, the Conservancy is not currently accepting easements for which the owner desires to take the tax deduction.

If an owner wishes to move forward with donating an easement there are a number of steps. These include:

  • The property should be listed on the National Register of Historic Places.
  • A draft of the easement document and its supporting materials is prepared. Typically the designated easement holder can prepare the documents but the owner should have his or her attorney and/or tax advisor review them.
  • Any mortgage on the property needs to be subordinated. This generally means that should the lender-bank obtain title to the property through a mortgage foreclosure, the lender-bank cannot remove the restrictive covenants from the property.
  • The easement-holding organization’s interest should also be covered by the owner’s insurance.

The grant of a preservation easement to a qualified charitable organization obligates that organization to:

  • Record the executed preservation easement with the local county
  • Perform an on-site inspection of the condition of the property on a periodic basis.
  • Review and approve any material changes to the protected elements of the property.
  • Enforce the conditions of the easement, if necessary through litigation.

In doing these tasks the charitable organization may incur expenses over the years. This is why all historic preservation organizations that accept easements request a contribution into their Easement Monitoring Fund. These are funds that the organization holds to cover monitoring and enforcement costs. This is a one-time gift, usually given at the time of recording the easement. This donation may be tax-deductible to the building owner as a charitable contribution, thus reducing its financial impact.

While the owner of the easement property is responsible for all care and maintenance of the property, it is the Building Conservancy’s goal to work in partnership with property owners to ensure the highest standards of preservation of the property.

Please do not hesitate to contact us with questions if you think you might be interested in placing a preservation easement on your Wright-designed home.

Posted on July 12, 2018

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