Standard 9: Ensuring Sound Transactions

“Land trusts work diligently to see that every land and conservation agreement transaction is legally, ethically, and technically sound.”

Background Context: 

 

Practices: 

A. Legal Review and Technical Expertise
  1. Obtain a legal review of very land and conservation agreement transaction, appropriate to its complexity, by a lawyer or notary experienced in real estate law.
  2. As dictated, by the project, secure appropriate technical expertise, such as in financial, real estate, scientific, indigenous and land and water management matters.

Resources:

Directory of Certified Specialists in Real Estate Law & Estates and Trust Law Law Society of Ontario ——————- ——————- website
Directory of the Association of Ontario Land Surveyors Association of Ontario Land Surveyors ——————- ——————- website
Appraiser Directory Appraisal Institute of Canada ——————- ——————- website
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B. Legal and Financial Advice
  1. Do not give individualized legal, financial or tax advice when providing transaction related information.
  2. Recommend in writing that each party to a land or conservation agreement transaction obtain independent legal, financial and tax advice.

Resources:

Land Securement Procedural Checklist Ontario Farmland Trust ———————– 66 KB pdf
Property Securement Process Checklist Ontario Land Trust Alliance ———————– 73 KB pdf
File Name Organization Year Size Format
C. Environmental Due Diligence
  1. For every land and conservation agreement transaction, conduct or obtain a preliminary environmental investigation to identify whether there are any conditions that pose environmental risks.
  2. If evidence of environmental risk is found, conduct or obtain a more thorough investigation, such as a Phase 1 assessment, and take steps to address any significant assessment.

Resources:

Land Securement and Disposition Policy Credit Valley Conservation 2004 1,648 KB pdf
Environmental Assessment Form – Draft Ontario Land Trust Alliance ——————- 61 KB word
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D. Determining Property Boundaries
  1. Determine both the legal description and physical boundaries of each property conservation agreement.
  2. If a conservation agreement contains restrictions or permitted rights that are specific to certain zones or areas within the property, include the locations of these areas in the agreement document so that they can be identified in the field.

Resources:

Boundaries & Your Land Association of Ontario Land Surveyors ——————- ——————- website
Land Securement Procedural Checklist Ontario Farmland Trust ——————- 66 KB pdf
Property Securement Process Checklist Ontario Land Trust Alliance ——————- 73 KB pdf
Land Securement Strategy & Criteria Ontario Farmland Trust 2015 257 KB pdf
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E. Conservation Agreement Drafting
  1. For every conservation agreement,
    1.  Individually tailor it to the specific property.
    2. Identify the conservation values being protected.
    3. Allow only uses and permitted rights that are consistent with the conservation purposes and that will not sig impact their protected conservation values.
    4. Avoid restrictions and permitted rights that the land trust cannot monitor/ and/or enforce.
    5. Include all necessary and appropriate provisions to ensure it is legally enforceable.
  2. Review each conservation agreement for
    1. Consistency with enabling legislation of conservation agreements and other provincial and federal applicable legislation.
    2. Internal consistency, omissions and absence of errors within the conservation agreement documents.

Resources:

Conservation Easement Drafting & Documentation : Chapter 2 Land Trust Alliance 2008 1,617 KB pdf
Best Practices for Conservation Easements Agreements Ontario Land Trust Alliance 2016 134 KB pdf
Annotated Sample Conservation Easement Agreement Ontario Land Trust Alliance 2008 884 KB pdf
Conservation Easement Agreement – Sample 1 Ontario Farmland Trust 2015 230 KB pdf
Conservation Easement Agreement – Sample 2 Oak Ridges Moraine Land Trust ——————- 215 KB pdf
How to Protect Your Farm – Fact Sheet 1 Ontario Farmland Trust 2013 375 KB pdf
Understanding Easements – Fact Sheet 2 Ontario Farmland Trust 2013 1,540 KB pdf
Financial and Tax Benefits – Fact Sheet 3 Ontario Farmland Trust 2013 270 KB pdf
Easements Step by Step – Fact Sheet 4 Ontario Farmland Trust 2013 1,558 KB pdf
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F. Title Investigation and Registration
  1. Prior to closing and preferably early in the process, have a title company, lawyer or notary investigate title for each property or conservation agreement the land trust intends to acquire.
    1. Update the title at or just prior to closing
  2. Evaluate any encumbrance and title exception and document how the land trust addressed mortgages, liens, severed mineral rights and other encumbrances prior to closing.
    1. Mortgages, liens and other encumbrances that could result in extinguishment of the conservation agreement or significantly undermine the important conservation values on the property are discharged or properly subordinated to the conservation agreement.
  3. Promptly register land and conservation agreement transaction documents, including baseline documentation reports or summaries when required, at the appropriate registration office.

Resources:

Ontario Land Registry Office Service Ontario ——————- ——————- pdf
Overview of Land Registry Service Ontario ——————- ——————- pdf
Land Securement Procedural Checklist Ontario Farmland Trust ———————– 66 KB pdf
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G. Recordkeeping
  1. Adopt a written records policy that governs how and when organization and transaction records are created, collected, retained, stored and destroyed.
  2. Keep originals of all documents essential to the defense of each real property transaction in a secure manner and protected from damage or loss.
  3. Create and keep copies of these documents in a manner such that both originals and copies are not destroyed in a single calamity.

Resources:

Records Management & Safekeeping Policy – Sample 1 Ontario Land Trust Alliance 2016 84 KB word
Records Management – Template Ontario Land Trust Alliance ——————- 63 KB pdf
Record Keeping Policy – Sample 2 Couchiching Conservancy 2008 222 KB pdf
Record Keeping Fact Sheet Ontario Land Trust Alliance 2012 517 KB pdf
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H. Purchasing Land or Conservation Agreements
  1. When buying land, conservation agreements or other real property interests, below, at or, in limited circumstances, above the appraised value, contemporaneously document:
    1. The justification for the purchase price.
    2. That there is no private or undue benefit.
  2. Obtain an independent appraisal by a qualified appraiser in advance of closing to support the purchase price based on the fair market value.
    1. However, a short narrative, a letter of opinion or other documentation from a qualified real estate professional may be obtained in the limited circumstances when:
      1. A property has a very low economic value.
      2. A full appraisal is not feasible before a public auction.
      3. Or the amount paid is significantly below the fair market.

Resources:

File Name Organization Year Size Format
I. Selling or Transferring Land or Conservation Agreements
  1. When selling land, conservations agreements or other real property interests,
    1. Establish protections as appropriate to the property.
    2. If the sale is to a party other than another charitable organization or public agency obtain an independent appraisal by a qualified appraiser or a short narrative, a letter of opinion or other documentation from a qualified real estate professional to determine the value of the asset and to support the selling price.
    3. Select buyers in a manner that avoids any actual or appearance of impropriety.
  2. When selling or transferring conservation land or conservation agreements to another charitable organization or public agency, consider whether the new holder can fulfill the long-term stewardship and enforcement responsibilities.
  3. For the sale or transfer of land or conservation agreements certified as ecological gifts, request authorization from the Minister of Environment and Climate Change Canada, or its replacement.

Resources:

File Name Organization Year Size Format