[MassHistPres] single house historic district vs. covenant on deed

[Robert W. Ogle]

All,

A Preservation Restriction (Preservation Easement) generally protects a historic property and its character defining features in perpetuity. This can include not only the building, but interior features as well as the landscape. A restriction must be donated to a qualified organization as defined by the IRS. A qualified organization must demonstrate it has the resources (human and financial) to monitor and enforce the terms of the restriction agreement over time.

The owner of the property (Grantor) donates the restriction to a qualified organization (Grantee). Under certain circumstances defined by the IRS, the owner may be eligible for a significant income tax deduction based upon the difference in market value of their property before and after placement of the preservation restriction. In addition, responsible qualified organizations generally require an endowment contribution (also eligible for tax deduction benefits). The income from the endowment covers the costs of setting up preservation restrictions (research, documentation, etc.), ongoing monitoring and professional services to the property owner, as well as contributing to a legal reserve fund to defend or enforce the terms of the restriction should it become necessary. Promulgation of an endowment contribution is generally tailored to each individual property based upon the complexity of the features protected, scale of the property, and projected monitoring costs.

A properly developed preservation restriction donated by an owner to a qualified organization is the only way to protect a historic property in perpetuity and potentially yield tax benefits to the owner. We are always happy to meet with organizations and individuals to discuss how preservation restrictions could help protect their historic resources.

Robert W. Ogle
Team Leader, Preservation Services
Historic New England
185 Lyman Street
Waltham, MA 02452-5645
Tel. 617-994-6640
rogle at historicnewengland.org<mailto:rogle at historicnewengland.org>

From: masshistpres-bounces at cs.umb.edu [mailto:masshistpres-bounces at cs.umb.edu] On Behalf Of Christopher Bader
Sent: Tuesday, July 14, 2015 10:58 AM
To: masshistpres Members; all at medfordhdc.org
Subject: [MassHistPres] single house historic district vs. covenant on deed

All,

Several historic houses and other buildings in Medford are protected by covenants on the deeds naming the Massachusetts Historical Commission as trustee.  Can the local Historical Commission or Historic District Commission be the trustee?  (We are not considering Historic New England as a trustee.  This costs $50,000 or more.)

What are the pros and cons of creating a single house historic district vs. simply placing a covenant on the deed, assuming the owner is willing to do either, but is not willing to spend $50,000.

Christopher Bader
Chair, Medford Historic District Commission






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