Standard 9: Ensuring Sound Transactions
The land trust works diligently to see that every land and conservation agreement transaction is legally, ethically and technically sound.
Background
A land trust usually intends to protect the property it conserves in perpetuity. To help secure the perpetual conservation of land, its transactions must hold up over time and withstand challenges. Sound transactions rely on the land trust performing “due diligence” in its transaction steps. Land trust representatives need not be lawyers, but they must have good legal advice, and they should familiarize themselves with basic principles of real estate and tax law. The land trust should draw a landowner’s attention to issues that must be addressed as the transaction proceeds. However, a land trust should not represent itself as giving specific legal or financial advice; a landowner’s own advisors should do that. A land trust may have to call on other financial and technical experts in order to complete the transaction. Carefully documenting the steps a land trust takes in performing its due diligence can help secure the perpetual conservation of the property.
Relevant Law
- Property Law Act, RSBC 1996, c. 377, s. 35.
- Land Title Act, RSBC 1996, c. 250, s. 218-223.
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I; see:
- Environmental Management Act, SBC 2003, c. 53, s. 40
- Contaminated Sites Regulation, BC Reg. 375/96, as am., s. 3.
- Land Title Act, RSBC 1996, c. 250, Parts 10 and 10.1
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I;
see Income Tax Technical News No. 26 at:
- Taxation (Rural Area) Act, RSBC 1996, c. 447.
- School Act, RSBC 1996, c. 412.
- Police Act, RSBC 1996, c. 367.
- Property Transfer Tax Act, RSBC 1996, c. 378.
- Social Service Tax Act, RSBC 1996, c. 431.
PRACTICE
A. Legal Review and Technical Expertise
The land trust obtains a legal review of every land and conservation agreement transaction, appropriate to its complexity, by a lawyer or notary experienced with real estate law. As dictated by the project, the land trust secures appropriate expertise in financial, real estate, tax, scientific, and land and water management matters.
Background
A timely and thorough legal review for every transaction is essential—to protect both the land trust and the resource values entrusted to it. Land transactions need to be structured in a way that protects the land trust’s interests and ensures that they last. To be durable and defensible, legal documents and agreements should be reviewed by a lawyer familiar with real estate and tax law and who understands the nuances and implications of the legal language. Land trusts regularly engaged in conservation agreement transactions may use a standard agreement template that is prepared by a lawyer. Staff or volunteers may do the drafting from the template, but a lawyer should conduct at least a brief review of the final document, particularly of the legal description and areas where the drafter has deviated from the template. A lawyer should also review the template on an annual basis. Land trusts using lawyers on their board to review their transactions must take special care to see that the lawyer has the appropriate experience with conservation agreements and that any undue benefit is avoided. In many transactions, a land trust may also need professional advice and assistance with land planning, water rights, mineral rights, biological inventories, and environmental assessments for hazardous materials, land management, and other issues.
Assessment Questions
BC Assessment Questions
- Does the land trust engage a qualified attorney to review all legal documents for each land transaction prior to registration?
- Does the land trust’s attorney complete an annual review of all legal document templates?
- Does the land trust use a standardized template for covenants and all other legal documents?
- As needed, does the land trust receive advice from qualified financial, real estate, tax, scientific or land management professionals for each transaction?
CLTA Assessment Questions
- Does the land trust use a standard conservation agreement template?
- If yes, how often is this template reviewed by a qualified lawyer?
- Is every conservation agreement reviewed by a qualified lawyer? Yes No N/A
