Now that your farmland protection partner has submitted an ACEP-ALE application that has gone through an initial review, what comes next? NRCS will notify your partner that your project was selected for funding. Your partner will coordinate with NRCS to manage the acquisition process through closing. Timing and coordination of the acquisition process varies depending on your state and partner. Remember to keep in regular contact with your partner throughout the process. The sooner you can respond to requests for information from your partner, the better. See below for key steps in the process. Most documents are due at least 90 days before the planned closing date, but your partner may want to complete these steps sooner so there is time to resolve any issues that come up in the review process.
Execute NRCS Parcel Contract
Your partner will enter into a Program Agreement with NRCS as well as a Parcel Contract specific to your property. The Parcel Contract includes a series of forms that identify the entity partners, the amounts to be paid for the easement, identifies you as the landowner, and confirms you meet eligibility criteria. Once your partner and NRCS sign these forms, the clock starts for acquiring an easement. In general, ALEs must close within three years, but some extensions may be approved.
Develop the Deed
You will work with your partner to finalize the deed (“the ALE deed”). Your partner will work to incorporate the ACEP-ALE Minimum Deed Terms (MDT) into their conservation easement. Make sure an attorney representing your interests reviews the draft ALE deed to understand its potential impacts on your land and operation and future operations. Pay particular attention to the following terms which depend on choices you and your farmland protection partner make before closing:
- Limit on impervious surfaces restricts surfaces covered by asphalt, concrete, or roofs, not including unpaved roads, to 2% of the easement area, though waivers requested from NRCS for up to 10% may be possible. MDT Section I, Paragraph (1).
- Subdivisions are generally prohibited after the easement. If the entity will allow future conveyance of subdivisions, they must identify the maximum number of separate parcels and divisions in the ALE deed and whether they will seek NRCS approval of the subdivisions prior to the easement or after. MDT Section I, Paragraph (2)(A).
- Industrial or commercial uses related to agricultural production and consistent with the purpose of the ALE are allowed, but specific activities need to be listed. MDT Section I, Paragraph (2)(B).
- Construction on the protected property must be located within building envelopes (a.k.a. farmstead areas). These are areas where existing and future structures on the farm or ranch are located. You and the entity will determine the number, locations, and size of the envelopes. This includes any additional residences for family or farm employees. MDT Section I, Paragraph (2)(C).
- Surface and subsurface mineral exploration and extraction are generally prohibited after the easement. However, the entity can either prohibit mineral development entirely or limit it to subsurface mineral development with conditions. MDT Section I, Paragraph 2(F).
- Limited mining activities for materials (e.g., sand, gravel, or shale) used for agricultural operations on the protected property may be allowed. You will choose to identify the extraction location as an exhibit to the deed or opt to request permission from your partner in advance of extraction activity. MDT Section I, Paragraph 2(F).
- Applicable management plans, including conservation plans for highly erodible cropland and Agricultural Land Easement Plans you and your partner agreed to are identified in the ALE deed. MDT Section I, Paragraph (3)(A)-(B) and (4).
There are additional issues to consider including, but not limited to, water rights, renewable energy, and telecommunications. Review the Minimum Deed Terms and NRCS Title Exception Guide below and discuss them with your attorney and farmland protection partner before the easement closing. Once the ALE is placed on the parcel, conveying interests like rights-of-way to others will need to be evaluated and approved by your partner and, in some cases, NRCS.
Your partner will submit the draft deed to NRCS for approval at least 90 days before the planned closing date so there is time to address any issues. NRCS will review the easement for compatibility with the program requirements.
Confirm Legal Description
The description of the parcel included in the ALE deed must match the description in the underlying property deed and meet the state’s survey standards. It should identify all easements, rights of way, encroachments, etc. You or your partner will need to obtain a new survey and legal description in certain situations. For instance, if the legal description of the parcel covered by the ALE does not match the current recorded property description, or if the portion of the parcel covered by the ALE is smaller than the total parcel size. Your partner may hold off on ordering a new survey, if required, until the appraisal and title review are completed to avoid unnecessary costs.
Your partner will submit the legal description and, if applicable, the new survey to NRCS at least 90 days before the planned closing date.
- ACEP-ALE Minimum Deed Terms with Commentary
- ACEP Title Exception Guide
Procure an Appraisal
Your partner will obtain a determination of the fair market value of the ALE by ordering an appraisal report. You will not select the appraiser or be listed as the client. The appraisal provides the market value of the property before the easement is placed on the property and the market value of the property after the easement is placed on the property. The difference is the value of the easement.
Your farmland protection partner may have obtained an appraisal before submitting the application to inform their negotiations with you and enable them to submit a more accurate request for the ACEP-ALE cost-share (the NRCS share is based on the lower of the value requested on the application or the appraised value). In addition, some states may also provide ranking points for submitting an appraisal with the application.
The effective date of the appraisal must be no earlier than 6 months before the Parcel Contract is signed and before the closing of the ALE. An update to the appraisal will be necessary if prepared earlier than 6 months prior to execution of the Parcel Contract. The final version of the ALE deed needs to be considered in the appraisal if the deed terms provided to the appraiser changed. Your partner will submit the final appraisal report to NRCS for a technical review at least 90 days before closing.
Secure Clear Title
Title Review and Commitment
Your partner will need to obtain a legal title review. The resulting report will identify any outstanding interests, exceptions, or issues. Typical issues that will need to be addressed include mortgages, life estates, judgments, leases, and mineral interests. Your attorney, in consultation with your partner, is responsible for reconciling any title issues.
Mortgages must be subordinated or removed. NRCS may allow you to use your anticipated ALE closing proceeds to pay off the mortgage upon request, but the title must be cleared at closing. Any leases or easements that include a right of first refusal or are incompatible with the purposes of the conservation easement or agricultural use must be removed or subordinated. Agricultural leases must be subordinated. Life estates, judgments, mechanics liens, and tax liens must be removed. Your partner will discuss any mineral interests, rights, or leases with your state NRCS program manager.
At this stage, your attorney and your partner are working toward removing or subordinating other interests as required. Any exceptions to the requirement to remove or subordinate outstanding or reserved interests must be approved by NRCS. To make this process smoother, your partner will explain in writing why each title exception will not impact the ALE and submit these explanations to NRCS. NRCS will determine whether these exceptions are acceptable and will take into consideration your partner’s documentation.
At least 90 days before closing, your partner will provide NRCS with a copy of a title commitment—a promise from the title company to provide title insurance for at least the full amount of the ALE purchase price. The title commitment will include a copy of documents to support each title exception, a summary of title review findings, and any other requested documentation related to title.
Your partner will secure proper title insurance using an American Land Title Association (ALTA) Owner’s Policy with your partner listed as the insured. The policy issued must be for at least the full amount of the agricultural land easement purchase price.
- USDA Subordination Agreement and Limited Lien Waiver (AD-1158)
Obtain Your Plans
In general, you are not required to have a land management plan to participate in ACEP-ALE. There are three circumstances that require plan development and implementation.
- If any portion of your parcel contains highly erodible cropland, it must be managed in accordance with a HEL conservation plan. The plan will be developed by NRCS or a NRCS-certified planner in consultation with you.
- Resources that served as the basis for land eligibility or ranking points, such as forests, grasslands, or cultural/archeological sites, may require a separate management plan.
- In addition, some states award ranking points for an Agricultural Land Easement Plan (ALEP), an optional plan that can include component parts like a grassland management plan, forest land management plan, and/or a schedule for implementing conservation practices.
Draft plans are submitted for NRCS review at least 90 days before closing.
- Sample ALE Plan
- HEL/WC Compliance Fact Sheet
Prepare a Baseline Document Report
Your farmland protection partner will prepare a Baseline Document Report that documents the baseline conditions on your property at or near the time of closing. Trash, debris, encroachments, and other issues should be adequately addressed prior to the easement so as not to be part of the baseline condition. It will be referenced for monitoring and stewardship activities. Your partner will provide NRCS a draft report at least 90 days before the planned closing date of the ALE.
- Baseline Document Report List of Items
Reaffirm Funding and Submit Payment Request
You and your partner will confirm the sources of the non-Federal share of the easement cost and sign the appropriate version of form NRCS-CPA-230. You may be asked to help document any expenses being used as part of the non-Federal share.
Your partner will submit a Payment Request Package to NRCS with the latest versions of all items outlined above. Ideally, these will be the final versions that have integrated all revisions or changes identified by NRCS during prior review. NRCS cannot authorize the closing or payment until the package is approved. Your partner will arrange for an advance payment or for reimbursement. Either way, you will receive payment for the easement at closing. Advance payments require earlier submission of the final documents and request package.
- Form NRCS-CPA-230E and Form NRCS-CPA-230F, “Statement to Confirm Matching Funds”
- Form NRCS-CPA-1268, “Conservation Activity Approval and Payment Application for Acquisition of Easements”
Complete the Transaction
The easement closing is the transaction that officially transfers your property’s development rights to your farmland protection partner in exchange for payment. You and your partner can proceed to closing once your partner receives approval from NRCS. Your partner’s attorney or a title or escrow company often serves as the closing agent.
The closing agent coordinates the documents needed to complete the easement transaction, including the ALE deed and any subordination agreements. They examine the real estate records from the date of the title commitment to the closing to make sure no new encumbrances have been recorded. The closing agent prepares a closing or settlement statement, if applicable, and disburses the payment to you minus any costs of recording the deed and other title documents. The agent then records the ALE deed in the office where local land records are officially recorded in that state (e.g., clerk or registrar of land records) within 5 business days of the closing date.
After the closing, the closing agent will issue a title insurance policy to your partner. For advance payments, the closing agent will prepare the IRS Form 1099-MISC reporting information for you for the full easement compensation amount. Your partner may prepare the Form 1099-MISC for reimbursement payments.
Promote the Project
Once the project is complete, your partner may ask for your help acknowledging key stakeholders and highlighting project outcomes. This outreach can help raise public awareness about the importance of farmland and ranchland protection and build public support. By acknowledging key funding sources like ACEP-ALE, you can help demonstrate the need for these programs to policymakers. You may also find that your willingness to permanently protect your land is important to your customers and could consider ways to use this project to promote and market your business.
You can share your story using the below Success Story Template to create a profile with your partner about the project. If you are willing to share information about the project, express why you wanted to protect your land and what goals the project helps you achieve. It is useful for farmers, ranchers, and other agricultural landowners to hear about participation from their peers. If not, there are creative ways to talk about project outcomes without identifying you.
- NRCS Success Story Template