Historic preservation covenants and easements are voluntary legal agreements made between a property owner and a qualified organization to protect a significant historic property, landscape, or archeological site by restricting future development of the property. Such an agreement may restrict changes or development to the entire property or to a more limited portion, such as a façade or the exterior of a building. The agreement specifies what portions of the property are protected, how long the protections remains in effect, and what controls or reviews are required for proposed changes.
Deed covenants and easements are filed with the county clerk of the county where the property is located. Property owners should consider the legal, economic, and tax consequences of entering into these agreements. Care must be taken in crafting the language of the agreement so that all parties are satisfied and benefit from the restrictions. When properly executed, these agreements are very effective in protecting the important characteristics of the property while still allowing acceptable use by present and future owners.
Tax Benefits of Preservation Easements
Under some circumstances, property owners who enter into a qualified preservation easement in perpetuity can receive tax benefits while still retaining ownership of the property. Generally, the property owner receives a tax deduction for the amount of the reduced economic value of the property due to the restrictions. In order to receive tax benefits, specific criteria for the property, agreement, and organization must be met. Additional information on the potential tax benefits of easements is available on the National Park Service website.
Texas Historical Commission Covenant and Easement Program
In Texas, the Texas Historical Commission (THC), along with local preservation organizations, is involved in the execution of covenants and easements. State assistance is often provided for the preservation of historic properties through the Texas Historic Courthouse Preservation Program or earlier grant programs, such as the Texas Preservation Trust Fund. To ensure that the public interest in the resource is protected, these programs may require the filing of a deed covenant or easement that controls future work at grant-assisted properties. In addition, when the federal government transfers a historic building to private ownership, a deed covenant is usually required. Currently, there are more than 250 historic properties in Texas protected by deed covenants and easements held by the THC.
Through Leave a Legacy to Texas, property owners may donate conservation easements to the THC. For more information on this program or to initiate an easement donation, please visit the Friends of the Texas Historical Commission website.
Project Review for Covenants and Easements
Owners of properties protected by a covenant or easement should remain in touch with the THC's Division of Architecture throughout the duration of the agreement. The project reviewer for your county is available for consultation and should be contacted during the planning phase of any anticipated work. This early consultation is the best way to handle the required review. Consider the THC staff as part of your design team. By consulting early in the project, staff can steer property administrators away from proposed treatments that may be inappropriate for the particular historic resource. Because the Division of Architecture is involved in hundreds of rehabilitation and restoration projects, many of the potential problems faced by owners have been solved at other properties.
Photo: Thistle Hill, courtesy of Historic Fort Worth, Inc.