Locking farmland in a trust ensures succession potential

Land won’t end up split off and sold to developers if it’s under a trust

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The Ontario Farmland Trust can ensure that agricultural land retains that designation in perpetuity with a Farmland Easement Agreement, whether or not owners have a succession plan in place.

The agreement – permanent and legally binding – is between the farm owner and the trust. It is registered on the title of the land, which means it runs with the land and applies to all future owners of the property.

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Why it matters: Preserving farmland is a challenge, especially when development money is involved.

“It can never be undone,” Ontario Farmland Trust executive director Kathryn Enders said in a recent interview. “It’s on title permanently for the next owner, and it restricts what they are and are not allowed to do.”

Along with the farm-income challenges and farmers’ lack of access to resources they need, the rising cost of farmland has been identified by the trust as a key factor in the farm succession crisis.

By locking in the agricultural designation, the Farmland Easement Agreement aims to keep farmland affordable for the next generation for a very simple reason: a developer would not be inclined to get into a bidding war over land that must remain agricultural. With no bidding war, a young farmer stands more of a chance.

“We have a template we use with the standard clauses – like no severances, no subdivisions, no new roads,” Enders said.

And they also work with farmers (and their lawyers) to tailor each agreement to the wishes of the land owner, evaluating anything they wish to restrict and determining if such a restriction would actually work.

A farmer can’t insist that the homestead must never be torn down, Enders gave as an example, but he might stipulate that any replacement building be constructed on that footprint.

“Sometimes they will say no new buildings, sometimes they will allow them if they’re agricultural,” she added.

Trust representatives actually oversee these agreements, showing up annually to make sure all provisions are adhered to – “no buildings, no severances, no Wal-Mart, no aggregates.”

In enforcing the agreements, they work closely with the current land owner whenever they feel there is a disparity between what’s provided for in the agreement and what is being carried out on the land. The provisions can be enforced legally, Enders said, but they prefer working with the current owner to resolve the situation.

For example, “If they’ve cut trees they are not supposed to, we will work with them to replace the trees and make the habitat what it used to be.”

The concept stems from the province’s Conservation Lands Act of 1990, which allowed land trusts and conservation authorities to prepare easements to protect land in this way, but did not allow for protections to agricultural land. Subsequent legislation in 2004 did provide for such protections.

“That is why we have been around since 2005,” Enders said.

This kind of agreement has been done in Canada since 1990, and has been offered much longer in the US.

In Ontario, they got to work with lawyers to create what they believe to be the best possible template, and have just registered their 16th Land Easement Agreement. “That is the way we protect more land,” she said.

“We are doing this for the community, and it’s really community-driven.”

The Ontario Farmland Trust, the organization behind it all, is a not-for-profit whose mission is to protect and preserve Ontario farmlands in order to ensure a safe and sustainable food supply for future generations.

“We are a charity,” said Enders.

“We raise funds for everything we do, and we do encourage people – if they believe in what we do and support our mission – to become a member and support us.”

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