- 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:
- Update the title at or just prior to closing
- Evaluate any encumbrance and title exception and document how the land trust addressed mortgages, liens, severed mineral rights and other encumbrances prior to closing.
- 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.
- Promptly register land and conservation agreement transaction documents, including baseline documentation reports or summaries when required, at the appropriate registration office.
Background
The term title means evidence of ownership—that is, the legal documentation of an owner’s right to the property. Before a land trust commits to acquiring land or conservation agreements, it needs to make sure there are no title problems that could undermine the important conservation values of the property or unacceptably restrict its use. The land trust should search the title of properties as early as possible in the negotiation process in order to prevent problems later on. Land trusts may wish to have landowners sign a letter of intent restricting them from placing new restrictions on title during the negotiation process. A land trust needs to know who owns the property and who has any interest in it; the status of property tax payments; whether there are liens, mortgages or other financial encumbrances; whether there are conservation agreements and rights-of-way; the status of water rights; and whether there are other claims, encumbrances or conditions that impair title. A land trust must evaluate which of these “exceptions” to title will compromise its ability to protect the property and address them accordingly. An encumbrance or interest on title, which is not postponed in the land trust’s favour, may preclude certification of a donated property or conservation agreement as an Ecological Gift.