PreservationPreservation Restrictions and the CPARestrictions and the CPA

Southeastern Massachusetts Southeastern Massachusetts Conference for Community Preservation Conference for Community Preservation

Committees Committees

New Bedford, MassachusettsNew Bedford, Massachusetts

November 13, 2004November 13, 2004 Michael SteinitzMichael Steinitz

• Massachusetts Historical Massachusetts Historical CommissionCommission

Historic Preservation Historic Preservation RestrictionsRestrictionsA legal means to provide a high A legal means to provide a high level of long term protection to level of long term protection to significant historic properties.significant historic properties.

In use for over 50 years in In use for over 50 years in Massachusetts.Massachusetts.

The Massachusetts Historical The Massachusetts Historical Commission has a statutory role Commission has a statutory role in all Historic Preservation in all Historic Preservation Restrictions.Restrictions.

Historic Preservation Historic Preservation RestrictionsRestrictions

A voluntarylegal agreement

Historic Preservation Historic Preservation Restrictions assure that the Restrictions assure that the intrinsic value of historic intrinsic value of historic properties will be preserved properties will be preserved through subsequent owners.through subsequent owners.

Nature and Purpose of a Nature and Purpose of a Preservation Restriction Preservation Restriction

A legal agreement between a property A legal agreement between a property owner and a qualified restriction owner and a qualified restriction holding organization.holding organization.

Protects a significant historic property Protects a significant historic property or site for a term of years or in or site for a term of years or in perpetuity.perpetuity.

Restricts future changes in Restricts future changes in appearance or use.appearance or use.

Preservation Restriction Preservation Restriction are widely used. are widely used. Over 1000 Massachusetts properties Over 1000 Massachusetts properties

protected by Preservation Restrictions.protected by Preservation Restrictions.

Restrictions granted to or purchased by:Restrictions granted to or purchased by:

Preservation organizationsPreservation organizations

Historical societiesHistorical societies

MunicipalitiesMunicipalities

Other Governmental agenciesOther Governmental agencies

Some uses of Preservation Some uses of Preservation Restrictions. Restrictions. Donated by property owner to assure Donated by property owner to assure

preservation beyond their tenure.preservation beyond their tenure.

Retained by a property owner at the time of Retained by a property owner at the time of sale to assure continued preservation.sale to assure continued preservation.

Purchased by a preservation organization to Purchased by a preservation organization to protect a key historic property.protect a key historic property.

Required as a condition for a permit or Required as a condition for a permit or variance. variance.

Required as a condition for the receipt of Required as a condition for the receipt of public preservation grant funds.public preservation grant funds.

Donation of Preservation Donation of Preservation Restrictions. Restrictions. Donation of a Preservation Restriction to a Donation of a Preservation Restriction to a

qualified organization may be considered qualified organization may be considered a charitable donation for Federal income a charitable donation for Federal income tax purposes.tax purposes.

Must be a donation, not a requirement.Must be a donation, not a requirement.

Must be granted in perpetuity.Must be granted in perpetuity.

Must meet Section 170(h) of the IRS code.Must meet Section 170(h) of the IRS code.

In Massachusetts, must also meet state In Massachusetts, must also meet state

statutory requirementsstatutory requirements..

Authorized byAuthorized byM.G.L. Chapter 184, ss. M.G.L. Chapter 184, ss.

31-3331-33• Preservation, Conservation, Agricultural Preservation, Conservation, Agricultural

Preservation, Watershed Preservation and Preservation, Watershed Preservation and Affordable Housing Restrictions are all enabled by Affordable Housing Restrictions are all enabled by State Law – M.G.L. Chapter 184.State Law – M.G.L. Chapter 184.

• Defines scope and intent of preservation Defines scope and intent of preservation restrictions.restrictions.

• Provides for their acquisition, recordation at Provides for their acquisition, recordation at Registry of Deeds, release, and assignment.Registry of Deeds, release, and assignment.

• All Preservation Restrictions must be approved by All Preservation Restrictions must be approved by the Massachusetts Historical Commission.the Massachusetts Historical Commission.

What Properties qualify What Properties qualify for protection by a for protection by a Preservation Restriction?Preservation Restriction?

• Structures or sites significant for:Structures or sites significant for:•Historic ArchitectureHistoric Architecture

•ArchaeologyArchaeology

•Historic AssociationsHistoric Associations

What defines a What defines a “significant” Property?“significant” Property?

Listed on or eligible for listing on the Listed on or eligible for listing on the National Register of Historic Places.National Register of Historic Places.

Contributing to a National Register Contributing to a National Register Historic District or eligible District.Historic District or eligible District.

Significance and eligibility are Significance and eligibility are determined by the Massachusetts determined by the Massachusetts Historical Commission.Historical Commission.

What Organizations are What Organizations are qualified to hold a qualified to hold a Preservation Restriction?Preservation Restriction?

• A government body.A government body.

• A charitable corporation or trust A charitable corporation or trust whose purposes include whose purposes include preservation of significant historic preservation of significant historic buildings or sites or of a buildings or sites or of a specific building or site.specific building or site.

Other conditions for Other conditions for holding a Restriction:holding a Restriction:

• Organizations must have the power Organizations must have the power to acquire interest in land.to acquire interest in land.

• Restrictions held by charitable Restrictions held by charitable corporations or trusts must also be corporations or trusts must also be approved by the municipality in approved by the municipality in which the property is located.which the property is located.

Who may hold a Who may hold a Preservation Restriction Preservation Restriction for a municipally-owned for a municipally-owned property?property?• A city or town mayA city or town may not not hold a Restriction hold a Restriction

on itself!on itself!

• A local historical commission or historic A local historical commission or historic district commission or any agent of town district commission or any agent of town government may not hold a restriction on government may not hold a restriction on a town-owned property. a town-owned property.

• The Restriction must be held by a The Restriction must be held by a qualified governmental body or charitable qualified governmental body or charitable trust.trust.

A Preservation Restriction A Preservation Restriction can forbid or limit:can forbid or limit:

• Alterations to exterior or interior features of a Alterations to exterior or interior features of a building or structure.building or structure.

• Changes in the appearance or condition of the Changes in the appearance or condition of the site.site.

• Uses not historically appropriate.Uses not historically appropriate.

• Field investigation without a State Field investigation without a State Archaeologist’s permit.Archaeologist’s permit.

• Other acts or uses detrimental to appropriate Other acts or uses detrimental to appropriate preservation of the structure or site.preservation of the structure or site.

What standards should be What standards should be used to determine used to determine maintenance practices, maintenance practices, allowable changes and, allowable changes and, “appropriate “appropriate preservation”? preservation”?

• The The Secretary of the Interior’s Secretary of the Interior’s Standards for the Treatment of Standards for the Treatment of Historic PropertiesHistoric Properties provides a provides a nationally recognized set of nationally recognized set of guidelines for preservation, guidelines for preservation, rehabilitation, restoration and rehabilitation, restoration and reconstruction.reconstruction.

The Baseline The Baseline DocumentationDocumentation

• The Restriction must establish those The Restriction must establish those qualities of the property that are to be qualities of the property that are to be protected under the restriction.protected under the restriction.

• Must adequately describe in words and Must adequately describe in words and depict in photographs the character-depict in photographs the character-defining historic features of the property.defining historic features of the property.

• Must adequately describe and depict the Must adequately describe and depict the condition and appearance of the setting.condition and appearance of the setting.

The Terms of the The Terms of the RestrictionRestriction• Should adequately protect the Should adequately protect the

identified character-defining historic identified character-defining historic features of the property, buildings, features of the property, buildings, structures and their setting.structures and their setting.

• Can distinguish between major Can distinguish between major alterations and minor, routine alterations and minor, routine maintenance and repair.maintenance and repair.

Components of the Components of the RestrictionRestriction• RecitalsRecitals

• Grant and Purpose StatementGrant and Purpose Statement

• ProvisionsProvisions

• SignaturesSignatures

• Approvals Approvals

• Supplemental AttachmentsSupplemental Attachments

RecitalsRecitals

• Legal Description of PropertyLegal Description of Property

• Qualifications of the GranteeQualifications of the Grantee

• Significance of the PropertySignificance of the Property

• Character Defining features Character Defining features (Preservation Values) of the Property to (Preservation Values) of the Property to be protectedbe protected

• Citation of Chapter 184, ss 31-33Citation of Chapter 184, ss 31-33

• A clear Purpose StatementA clear Purpose Statement

GrantGrant

• Grantor’s statement granting Grantor’s statement granting Restriction to Grantee – in Restriction to Grantee – in perpetuity or for a term of years.perpetuity or for a term of years.

• Clear statement of the Purpose of Clear statement of the Purpose of the Restriction. the Restriction.

ProvisionsProvisions• Grantor’s Covenant to Maintain; Reserved RightsGrantor’s Covenant to Maintain; Reserved Rights

• Prohibited Activities – demolition, usesProhibited Activities – demolition, uses

• Activites Requiring notification of and approval by Activites Requiring notification of and approval by Grantee (Conditional Rights)Grantee (Conditional Rights)

• Standards for Review; AdministrationStandards for Review; Administration

• Grantee’s rights of inspection; RemediesGrantee’s rights of inspection; Remedies

• Casualty damage; InsuranceCasualty damage; Insurance

• Assignment, recordation, extinguishmentAssignment, recordation, extinguishment

• Mortgage SubordinationMortgage Subordination

Signatures and ApprovalsSignatures and Approvals

• Grantor and Grantee notarized Grantor and Grantee notarized signaturessignatures

• Municipal notarized approval if Municipal notarized approval if Grantee is charitable organizationGrantee is charitable organization

• Massachusetts Historical Massachusetts Historical Commission notarized approvalCommission notarized approval

Supplemental Supplemental AttachmentsAttachments

• Legal Description of Property with Parcel MapLegal Description of Property with Parcel Map

• Baseline Documentation – Photographs and Baseline Documentation – Photographs and written descriptions of current conditionswritten descriptions of current conditions

• Signed and Notarized Mortgage SubordinationSigned and Notarized Mortgage Subordination

• Restriction Guidelines – Ordinary MaintenanceRestriction Guidelines – Ordinary Maintenance

MHC Review and Approval MHC Review and Approval of Preservation of Preservation RestrictionsRestrictions

• Get MHC significance opinion for Get MHC significance opinion for property early on.property early on.

• Listed on the National Register?Listed on the National Register?

• Usually require:Usually require:– Current MHC inventory formCurrent MHC inventory form

– Current Photographs of all historic Current Photographs of all historic featuresfeatures

– Annotated Parcel MapAnnotated Parcel Map

MHC Review and Approval MHC Review and Approval of Preservation of Preservation RestrictionsRestrictions• Contact MHC early in the process!Contact MHC early in the process!

• Use MHC sample Restrictions and Use MHC sample Restrictions and submit DRAFT Preservation submit DRAFT Preservation Restriction for review and comment.Restriction for review and comment.

• Allow adequate time for Review and Allow adequate time for Review and Approval process.Approval process.

(Minimum 90 days)(Minimum 90 days)

Coming soon!Coming soon!

• Updated MHC Guidelines for CPA Updated MHC Guidelines for CPA Preservation Restrictions, with Preservation Restrictions, with sample Restrictionssample Restrictions