A land trust is an agreement whereby one party (the trustee) agrees to hold

ownership of a piece of real property for the benefit of another party (the
beneficiary). Land trusts are used by nonprofit organizations to hold conservation
easements, by corporations and investment groups to compile large tracts of land,
and by individuals to keep their real estate ownership private, avoid probate and
provide several other benefits.
A community or conservation land trust is an organization established to hold land
and to administer use of the land according to the charter of the organization. A land
trust is a useful way to manage complex divisions of the Bundle of Rights that
people can own in real estate, and can be used to manage something as large and
complex as a multi-state REIT, or as common and small as a single-family home.
Corporations sometimes set up land trusts when they want to compile large tracts of
land without arousing suspicion or alerting people to their plans (which would cause
the asking price to rise). For example, the land for Walt Disney World near Orlando
Florida was put together by using many land trusts to buy smaller tracts of land.
Individuals use land trusts mainly for privacy and to avoid probate. No one knows
what one's bank balance or stock investments are, yet anyone with an internet
connection can look up a person's real estate holdings. A person who has an auto
accident or a doctor who accidentally injures a patient is a much better target for a
lawsuit if he or she owns real estate investments. So some investors buy their
properties in land trusts so their name does not appear in the public records. The
land trust also allows the property to immediately pass to their heirs at the moment
of death, rather than go through a long probate process.
Some of the other advantages of land trusts for individuals are:

Sales price of the property can be kept off the public

records
Property taxes are lower if the purchase price is kept
private
Judgments or liens (such as IRS liens) against an
individual's name are not a lien against their land trust
property
Partners can more easily continue a project if one dies
or is divorced
 Interests can be transferred quickly without recording
a deed
Managing a rental property is easier when the trustee
can be blamed
Negotiating a purchase or sale can be easier when the
trustee can be blamed
Liability on financing can be limited to the assets of the
trust
Investment trust companies hold property for investment purposes and non-citizens
who want long-term access to land in Mexico often enter real-estate trust
agreements, called fideicomiso, with Mexican citizens, but land trust more often
refers to a community scale organization. Community land trusts are established to
provide low- and middle-income families access to affordable housing while
conservation trusts protect environmentally, historically or culturally valuable places.
Land trusts are also in place to protect farmland and ranchland. Despite the use of
the term "trust," many if not most land trusts are not technically trusts, but rather
non-profit organizations that hold simple title to land and/or other property and
manage it in a manner consistent with their non-profit mission.
Contents
[hide]

1 History

2 Community land
trusts

3 Conservation land
trusts

4 See also

5 External links

[edit] History
Land trusts have been around at least since Roman times but their clearest history
is from the time of King Henry VIII in England. At that time people used land trusts to
hide their ownership of land so they would not have to serve in the military or suffer
the other burdens of land ownership. For example an elder uncle would hold his
nephew’s land so they would not have to join the king’s army. To put an end to this
King Henry in 1536 passed the Statute of Uses. The statute declares that if one
party holds land "to the use of" or in trust for another ("beneficiary"), legal title is
vested in the beneficiary. Obviously, if the statute had been given literal effect, there
would be no trust law. Shortly after the statute was enacted, however, English courts
declared that the statute only applied if the trust was passive, that is the trustee
didn’t do anything but hold the land.
In the late 19th century in Chicago some people figured out that land trusts would be
good things for buying property for investors to build skyscrapers on, and city
aldermen figured they would be a good way to hide their ownership in land since
they were forbidden to vote on city building projects when they owned land nearby.
Since the law of England including the Statute of Uses was the law of America the
question arose whether a land trust would be valid. This question went to the Illinois
Supreme Court which ruled that if a land trust was set up with some minor duty on
the trustee (such as to deed the property to the beneficiaries 20 years later), then
the trust would not be considered passive and would be valid. Thus the land trust in
America today is often called an “Illinois-type” land trust.
Land trusts have been actively used in Illinois for over a hundred years and in recent
decades have begun to be used in other states. The creation of land trusts is not a
recorded document, however the declaration of a trust is through a "deed to trustee".
Many believe that the trust is to be filed as a public document, however this removes
all of the asset protection provided by the formation of the land trust.

[edit] Community land trusts

Main article: community land trust
Community land trusts trace their conceptual history
to India's gramdans where villages held property in
the community interest, and to European and North
American land banks, which are quasi-public
agencies that invest in land often to help build family
farms or to encourage economic development. "The
ideas behind the community land trust...have historic
roots" in the indigenous Americas, in pre-colonial
Africa, and in ancient Chinese economic systems, as
Robert Swann and his co-authors saw it in 1972. The
introduction in their book, "The Community Land
Trust: A Guide to a New Model of Land Tenure in
America" continues, "...we can say the goal is to
"restore" the land trust concept rather than initiate it."
Residential land trusts emerged in the United States
after calls among civil rights leaders in the 1950s and
1960s in the American South for economic reforms to
reverse rampant poverty. An Institute for Community
Economics was organized in the late 1960s to help
residential trusts:

Gain control over local land use and reduce

absentee ownership
Provide affordable housing for lower income
residents in the community
Promote resident ownership and control of
housing
Keep housing affordable for future residents
Capture the value of public investment for long-
term community benefit
Build a strong base for community action
Residential community land trusts are now
widespread in the United States, but seldom gain
much notice beyond occasional local news accounts.
The Institute for Community Economics in 2004
reported nearly 120 community land trusts of varied
sizes in 30 states, the District of Columbia and in five
Canadian provinces. While a few earlier trusts
faltered, the number of land trusts in North America
overall nearly tripled between the 1987 and 2004.
Community land trusts rely on community members,
word of mouth and strategic communications to
attract new residents, members and supporters. In
residential land trusts, the CLT usually owns the land,
leasing it long-term to the land user who owns the
home and other improvements on the land. CLTs
usually retain rights to buy buildings from residents
who move out of the community. The goal of
residential trusts is often to protect housing prices
from real estate speculation and gentrification but to
allow residents to accrue equity, including sweat
equity.

[edit] Conservation land trusts

The goal of conservation trusts is to perpetually
preserve sensitive natural areas, farmland,
ranchland, water sources, or notable landmarks.
These include enormous international organizations
such as The Nature Conservancy or World Land
Trust, as well as smaller organizations that operate
on national, state/provincial, county, and community
levels. Conservation trusts often, but not always,
target lands adjacent to or within existing protected
areas.
Many different strategies are used to provide this
protection, including outright acquisition of the land by
the trust. In other cases, the land will remain in
private hands, but the trust will purchase a
conservation easement on the property to prevent
development, or purchase any mining, logging,
drilling, or development rights on the land. Trusts also
provide funding to assist like-minded private buyers
or government organizations to purchase and protect
the land forever.
As most land trusts are non-profit, they rely on
endowments or donations to provide capital to
acquire land or easements. Donors often provide
cash, but it is not uncommon for conservation-minded
landowners to donate an easement on their land, or
the land itself. Some trusts also receive funds from
government programs to acquire, protect, and
manage land. Some trusts can afford to pay
employees, but many others depend entirely on
volunteers.
When land is acquired, trusts will sometimes retain
ownership of the land in perpetuity, or sell the land to
a third party. This third party is often the government,
which will usually add the land to an existing
protected area, or create a new one entirely. Land
trusts were instrumental in the 2004 creation of Great
Sand Dunes National Park in Colorado, as well as the
expansion of Hawaii Volcanoes National Park by 50%
in 2003. Land trusts also sell land to private buyers,
usually with a strict conservation easement attached.
Keeping the land under private ownership has the
added benefit of maintaining the land on local
property tax rolls, providing income to the local
government.
Some areas have extremely limited public access for
the protection of sensitive wildlife, or to allow
recovery of damaged ecosystems. Many protected
areas are still under private ownership, which tends
to limit access as well. However, in many cases, land
trusts work to eventually open up the land in a limited
way to the public for recreation in the form of hunting,
hiking, camping, wildlife observation, watersports, or
other responsible outdoor activities. This is often with
the assistance of community groups or government
programs. Some land is also used for sustainable
agriculture or ranching, or even for sustainable
logging. While important, these goals can be seen as
secondary to protection of the land from
development.
The Land Trust Alliance, formed in 1981, provides
technical support to the growing network of land
trusts in the United States. The Alliance performs a
National Land Trust Census that keeps track of the
land protected by local and regional land trusts[1].
The last Census, conducted in 2003, reported that
these trusts have protected almost 9.4 million acres
(38,000 km²) of land in the United States, double the
4.7 million acres (19,000 km²) recorded in the 1998
survey. Over 5 million acres (20,000 km²) of that was
protected by conservation easement in 2003.
Although it does not include national or international
land trusts in its Census, the LTA estimates another
25 million acres (100,000 km²) in the U.S. have been
protected by those organizations. The largest amount
of land protected by local and regional trusts is in the
Northeast with 2.9 million acres (12,000 km²), while
the fastest growing region between 1998 and 2003
was the Pacific (consisting of California, Nevada, and
Hawaii), with protected land increasing 147% to 1.5
million acres (6,100 km²) in 2003.
In 1891, the Trustees of Reservations was founded,
perhaps the first conservation land trust in the entire
world. Conservation land trusts now operate in all 50
U.S. states, as well as many other countries. Since
then, the number of land trusts has steadily
increased, with most forming in the last 25 years.
Over 300 new local and regional trusts were formed
in the period from 1998 to 2003 alone, with the last
LTA Census counting 1,537 operating in the United
States. Over 1,000 of these are members of the LTA.
California now has the most land trusts, with 173
operating statewide in 2003. Massachusetts, despite
being much smaller, was a close second with 154
land trusts that year.
In October 2002, Property and Environment
Research Center published a report by Dominic P.
Parker entitled Cost-Effective Strategies for
Conserving Private Land. This paper identified
numerous ways for operating land trusts more
efficiently, pointing out that conservation easement
and other tools for land preservation may be less
costly than ownership. Sometimes the various rights
associated with land ownership are separable. A
preservationist organization may, for instance, buy
only the extraction rights on a property with oil or
minerals, and then rent those rights to extracters on
the organization's terms. The terms might include
requirements to protect the environment and pay the
organization royalties on materials extracted. Many
land trust organizations had already been using these
strategies for years when this report was published.

[edit] See also

Natural Lands Trust
Cooperative
Green belt
The Nature Conservancy
The Land Conservancy, a trust of British
Columbia, Canada
Creative Real Estate Investing
Community land trust
[edit] External links
Connemara Conservancy
American Land Conservancy
The Land Trust Alliance
Landtrust.net More information about landtrusts
and Equity holding trusts
 Categories: Articles lacking sources from September
2007 | All articles lacking sources | Real estate |
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