Tim Holden is a seasoned real estate appraiser at S.F. Holden Inc. who has worked closely with SVN | Saunders Ralston Dantzler. In this episode of In Our Expert Opinion, Linda and Chad invite Tim to discuss his work with conservation easements across the state of Florida. Throughout the episode, Tim enlightens the audience on the intricacies of valuing conservation easements, why certain individuals opt for these easements, and the importance of preserving Florida's natural resources.
Below is an excerpt from the interview. Listen above for the full podcast.
What do you do at S.F. Holden Inc? I do real estate valuations in Florida, from the east to west coast and primarily south of Orlando. Our niche would be agricultural lands and conservation lands. We work with state and federal organizations, water management districts, and other private entities.
How do you value a conservation easement? We actually don't value the easement. We value the impact of the easement on the property.
In one appraisal report, there's actually two valuations in that single report. First, we would value the property in the “before” situation as unencumbered and as it is right now, also known as fee simple. Then, we value the property under a hypothetical condition that the proposed easement is in place. The difference between those two numbers is the impact of value from the conservation easement. That's what we estimate.
What is a conservation easement? In its simplest terms, when you place a conservation easement on a property, you give up your rights. In fee simple ownership, you have a whole bundle of rights including the right to lease the land, the right to sell it, and all the rights that are granted to Americans to do with their property.
When you place a conservation easement on an unencumbered property, you give up a lot of your rights and uses to the property, but in turn, you get compensated for that. That’s where we as appraisers come in.
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Who is purchasing these easements? Believe it or not, some of the very first conservation easements in Florida are held under some private individuals, but it's very rare.
You also have certain nonprofit organizations, The Nature Conservancy for one, that purchase conservation easements, but the main purchasers of easements would be the state of Florida, federal agencies, and water management districts.
Why would the government have any interest in agricultural property? In certain regions, they don't want to have rooftops and they want to keep agricultural uses and production. That's kind of the long term goals for the state and federal government. Is it appropriate for every piece of real estate? No, but is it appropriate for many? Yes, it is.
One thing to keep in mind is that when the property owner places a conservation easement on the land, it's voluntary. This it's typically not done via eminent domain, for instance. These are voluntary easements and property owners put a lot of thought into these and into the rights that they retain after the conservation easement is in place.
How long does it take to close on a conservation easement? I think Dean Saunders would know this answer, but it's well over a year sometimes. It all depends on if the property that the state of Florida is pursuing and if they really want it that bad.
There's multiple people that would like to sell a conservation easement on their property, but for one reason or another, the property may not be appropriate or there's other, more desirable lands for the state of Florida to focus their money on. I know that some properties have been on this list for years, but there's just bigger fish to fry, per se.