Posted by: Archipelago Law in Uncategorized on September 23, 2021
A change in Maine law could revert ownership of intertidal land from shorefront property owners to the State to hold in trust for the public. What does this mean for the shorefront owners? While the intertidal, the land between the mean low tide and mean high tide lines, will no longer be subject to a private property owner’s right the exclude the public, upland owners will maintain exclusive ownership to the adjacent land so long as it was included in their original deed. This creates a unique opportunity for upland owners who are willing to think strategically and plan for the day the law will eventually change.
A Shifting Precedent: Returning the Intertidal to its Rightful Owner
The question “who owns Maine’s intertidal land?” has been contested by beachfront property owners, everyday beachgoers, back lot owners, inhabitants of Maine, and even the State itself for a generation. Beachfront owners argue that their predecessors in title have owned the intertidal land since before Maine became a state. However, the vast majority of Mainer’s refute that claim, urging the Court to rule that the State now holds, and has always held, the intertidal lands in trust for public benefit.
Maine courts have reviewed various matters relating to the ultimate question of ownership, as well as the extent to which the general public is allowed access to presumed privately held intertidal land. In the 1989 case Bell v. Town of Wells, the Maine Supreme Judicial Court reviewed the issue of intertidal ownership ruling by a slim vote of 4-3, that a Colonial Ordinance enacted by the Massachusetts Bay Colonies in the 1640’s is part of Maine’s common law and was adopted by Maine upon separating from Massachusetts. Relying on an overly narrow interpretation of the so-called Colonial Ordinance, the Court stripped the State of its ownership in the tidelands, reserving only limited public rights for fishing, fowling, and navigation without preserving any rights to use the intertidal for other commercial or recreational activities. The decision caused Maine to be one of the few states in which coastal property owners presumptively hold title extending to mean low water. Since the highly controversial decision in Bell, the Law Court has attempted to lessen the consequential effects that decision has had on the general public. In the 2011 case McGarvey v. Whittredge, the Law Court recognized that the law must be given a “sympathetically generous” interpretation and grow to “reflect the realities of a changing world”, ultimately expanding the definition of navigation to allow access to the ocean through the tidelands for scuba diving. Later in Almeder v. Town of Kennebunkport, the Law Court stripped the presumption of intertidal ownership from shorefront owners created by Bell, setting a new precedent that ownership of intertidal land must be proven by ancient deed because a preceding owner cannot grant title to land which they do not own.
By narrowing the decision in Bell, the Court has shown its keen disposition to return the intertidal back to its rightful owner and open the doors for unfettered recreational and state regulated commercial use by the people, an idea that could become a reality upon the decision of a case pending before the Superior Court today.
Potential For Financial Planning
The everchanging legal landscape that could ultimately reverse the wrongs caused by Bell may cause warranted concern for shorefront owners. What will happen to their property when the imminent decision to revert the tidelands to the State is passed down? Is there any way to plan financially and strategically for the loss of tidal land? While the reversal of Bell will change things, private ownership of the upland will continue, and private owners will continue to control prime real estate. The changing laws could be seen as a unique opportunity for strategic gain. Here, we discuss a few of the legal avenues available for upland owners to take advantage of expanded public rights to the intertidal land.
A. Easement Conveyance
As shorefront property owners know well, there are significant dollar figures exchanged when conveying a shorefront property. However, ownership is not the only interest that can be conveyed. An easement is an interest in land owned by another person, consisting in the right to use or control the land, or an area above or below it, for a specific limited purpose. The option to sell a right to convenient access over a shorefront property to the intertidal, or the opportunity to occupy the dry sand portion of the beach if an upland property owner continues to hold title to the sandy beach under Almeder, can be set at a premium rate. A deeded right to access the intertidal could be written to run with the land in perpetuity (yes, that means forever!). This could increase the value of a back lot property for generations to come. When an easement is expressly granted to another, the face of the easement can restrict the scope of that granted right to utilize property for a set duration of time, or as broadly or narrowly as negotiated by the parties. More importantly, beachfront owners have the right to demand any value they deem necessary in exchange for the right to use their upland property and can sell that right to alternate parties as many times as they deem fit.
Conservation easements are voluntary legal agreements by which properties are protected and preserved by regulating the allowed land use. By conveying a conservation easement by sale or donation, usually to a land trust entity, the landowner may become eligible for charitable contribution tax deductions when meeting certain requirements. These requirements differ based on the conservation purpose. Meanwhile, conveying any portion of shorefront property could have an immediate effect on current property taxes, as well as affect future generation by reducing estate tax.
B. The Lease Option
For those landowners who are alarmed by the word “perpetuity” that comes with conveying an easement, a land lease can provide a similar approach with a definite period of time. Like an easement, a lease allows shorefront owners to maintain fee ownership of the land and limit the allowed uses on their property. The real advantage of a lease, as opposed to an easement, is the support of contract law. Both parties to the agreement will be bound by such agreement and may have any damages available to them under Maine contract law upon breach of the opposing party. However, a true benefit to the landowner comes with a well written contract. To avoid significant litigation, damages can be built directly into the contract, along with fees for property maintenance and expanded uses. Additionally, a contract can provide for limited liability to the property owner.
When a landowner grants a license, they allow the licensee access that would otherwise be deemed unlawful trespass. Like an easement or lease, a license permits specific activity to take place on the licensor’s land (i.e., access to the ocean or intertidal, or the right to lay a towel on dry sand, etc.); however, there are substantial rights retained by a licensor. First and foremost, a license is generally revocable at any time by the licensor and only valid for a defined period of time. However, this is not always the case. Contractual licenses may be irrevocable where the licensee has spent money, or changes their position, in reliance on the license. Shorefront owners should be careful to ensure that the license does not become irrevocable by limiting the allowed uses granted under the license. When a license becomes irrevocable, it may be considered a servitude that runs with the land much like an easement. However, unlike easements, most licenses are not alienable or transferable to an alternate party. A revocable license will not run with the land in perpetuity to a successor in title, nor may a licensee assign their interest to a 3rd party. A license may permit a licensee limited access to the private upland subject to the beachfront owner’s discretion to revoke that privilege at will.
D. Tax Reduction Incentives
With pristine beachfront property comes high taxes. A leading incentive for allowing public access to private property are the tax reductions that come with it. Maine statute provides that property tax assessments are based on “just value”, or the fair market value, determined by the “presently possible land use alternative to which the particular parcel of land may be put… Assessors must consider all relevant factors, including without limitation, the effect upon value of any enforceable restrictions to which the use of the land may be subjected, current use, physical depreciation, sales in the secondary market, functional obsolescence and economic obsolescence.” In determining market value, land and buildings are valued separately; therefore, shorefront homes are assessed at a premium based on this location.
The State of Maine offers two relevant “current use” programs that provide property tax relief: Open Space and Working Waterfront, which establish valuation of property at its current use, rather than at market value. With no minimum acreage requirement, Maine’s Open Space Tax Law is available for any landowner that preserves or restricts their land to provide a public recreation, scenic resources, game management, and wildlife habitat. For land enrolled in the program, local assessors determine the value of the open space set aside for public use and reduce the overall tax bill in accordance with the programs allocated reductions for such use. The Working Waterfront program is reserved for lands abutting tidal waters or located in the intertidal zone, and where the use of which is more than 50% related to providing access to or in support of commercial fishing and commercial aquaculture activities. Where the land is used more than 90% as working waterfront the State allows for a 20% reduction from just value, and a 10% reduction for a use of more than 50% as working waterfront. Any beachfront property owner considering this option should consult a private tax professional to ensure compliance with local regulations.
A forward-thinking State, which thrives off its coastal values, working waterfront, and out-of-state tourism industry, cannot continue to inhibit the public from utilizing its most beloved and relied upon resource. Maine has seen the effect that past precedent has set, limiting the rights of so many for the benefit of the fortunate few. Change is inevitable and private ownership of the tidelands will eventually go by the wayside. Instead of fighting change, coastal property owners should share in that forward thinking vision by practicing new methods to support public access and recreation; all the while capturing the significant financial benefits that come with enhanced public rights.
Michael J. Skolnick, Esq.
Archipelago Law, LLP