JMRPWG agenda 102898 - Laserfiche WebLink

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permanent protection measures, or the landowner is only willing to enter into a temporary or nonbinding agreement . An example of a temporary agreement is a lease which typically gives a land trust exclusive access rights to properties for the term of the lease and is useful for protecting fragile on- site t resources . A less used agreement is a management agreement or plan under which the property will be managed by the landowner or by the trust . A final type of temporary measure is a registration program . The registration usually is a nonbinding agreement stating that the landowner will not develop the land or specified portions of it and will notify the trust of any threat or plans to sell . Methods That Buy Time . . Options and rights of first refusal preserve a land trust ' s opportunity to purchase land in the future if immediate acquisition is impossible or unnecessary . An option is the exclusive right to purchase a property under certain terns and conditions - and at a specified price - by a certain date . Acquiring an option gives a trust time to raise funds when a property is put on the market and threatened with imminent developnwnt. If the land trust obtains the necessary funds in time, it can exercise the option . If not, the option expires, and the trust forfeits any t money it paid . A right of first refusal is an agreement between a landowner and the land trust that gives the trust the right to match any bona fide purchase offer made on the property and acceptable to the landowner within a specified time period after the offer is made . Before matching an offer, however, the land trust should be sure that it is a serious offer by a third party. In the case of both a lease and a : right of first refusal, the land trust is under no obligation to purchase the land or make an offer on the property . Acquisition Methods The method of acquisition determines how much the land trust pays to acquire the property rights and when those rights accrue to the land trust . Amount of Payment . Purchasing land or interests in land at fair market value is the most expensive acquisition method . For this reason, land trusts will usually try to negotiate a donation or purchase at less than fair market value first . Purchases can also be broken into installments, either by paying for one transaction in installments or buying a piece of land in multiple, separate transactions . Since a landowner selling property at fair market value is subject to tax on any gains on the sale of the property, installment sales may also produce greater tax benefits for the landowner . l A bargain sale is a sale of land or interest in land below fair market value . The difference between the fair market value and the actual price paid may qualify as atax- deductible charitable donation to the trust . For this reason, bargain sales can be an attractive option for land owners who want to preserve their land but also need income from the transaction . Although a landowner will make more from the a sale at fair market value than from a bargain sale, the tax benefits of the gift portion can reduce or eliminate the disparity . A land trust ' s acquisition method of first choice is donation by the landowner . Landowners may donate almost any property right or interest in their land , including the entire parcel in fee, a 4 -25