Conservation covenants and their benefits for conservation and wildlife charities

Conservation covenants are a useful tool for wildlife-focused charities and other landowners to secure biodiversity benefits to offset the impact of development.

In this article we discuss the purpose, impact and enforceability of these covenants, and the Government’s recent policy change which threatens to roll back existing environmental protections.
In 2018, the Government published

In 2018, the Government published its “25 Year Environment Plan” which led to a requirement for a 10% biodiversity net gain associated with most developments to be enshrined in statute. Provisions relating to the “conservation covenants”, which would be a tool for delivering biodiversity net gain and other valuable conservation objectives, were also incorporated into a draft Bill and eventually into the Environment Act 2021.  This was a promising step, and the stage looked set for some very positive moves in relation to environmental protection and enhancement. 

What are conservation covenants?

A conservation covenant is a private agreement made between a landowner and a “responsible body” and can require a landowner to take action, or to refrain from certain action, in relation to proposed development on its land. It could also allow or require a “responsible body” (see below) to take action to achieve a conservation aim. 

The parties must intend the agreement to be for the public good. The conservation purpose may be ecological (and certainly will be if the covenant is for biodiversity net-gain purposes) or for an archaeological, architectural, artistic cultural or historic purpose and can include preserving the setting of land.

Once agreed, the conservation covenants will be entered into in writing between the landowner and the “responsible body”. 

A “responsible body” is designated by the Secretary of State and can include the Secretary of State, Local Authorities and other bodies such as conservation or wildlife-focused charities, provided that they are considered suitable and have conservation objectives as some of their main objectives. 

Charities will be able to enter into conservation covenants in their role as landowners, offering environmental gains to offset losses due to development and receiving payment for doing so. They will also be able to act as the responsible body in respect of agreements, so that they are responsible for ensuring that the terms of the agreement are fulfilled and the intended environmental gain provided. 

A charity acting in this role would expect to receive payment for doing so and, in either role, will be able to use and contribute their skills in conservation to promote the environmental gain.

How long will a conservation covenant last?

The length of a conservation covenant can be limited by agreement, but they will be capable of lasting indefinitely if the landowner is a freeholder, or for the remaining term of the lease if entered into by a tenant.  

For the project to be accepted for the purposes of registered off-site biodiversity gain in connection with a development, the covenant will need to last for at least 30 years. Thus, though leaseholders with leases over seven years will be able to enter into conservation covenants, they will need to have at least 30 years left to run if their project is to have formal value as biodiversity gain to off-set loss of biodiversity from a development.

How is a conservation covenant protected?

The conservation covenant is registrable as a local land charge and is a contract between the parties, who will owe the duties under the agreement to each other. The responsible body therefore has an important role in ensuring that the terms of the covenant are complied with.  

The remedies for breach will be similar to those in contract, including specific performance, injunction, damages calculated on a contractual basis and an order for payment of an amount due under the agreement. Exemplary damages may be awarded and in determining the remedy, the decision maker will have regard to the public interest in the performance of the obligation. A circumstance beyond the control of the parties or an emergency will provide the basis of a defence in relation to a failure to perform and, in a case where the relevant land is designated for a public purpose after the agreement is entered into, it will be a defence that to comply would have breached the requirements of that designation.

Landowners (including tenants) will be released when they part with their interest in the land but the agreement will bind successors in title. The parties may release the land, and each other, from the obligations by agreement, or they can modify the requirements, as long as the agreement continues to fulfil the requirements of a conservation covenant. The responsible body will be able to appoint another willing responsible body to take over its obligations if necessary.

The Birketts View

Before the provisions on biodiversity net gain have come into force (much of the Environment Act 2021 has not yet been implemented) and, with the clauses relating to conservation covenants in force only from 30 September 2022, the Government is having a “bonfire of regulations” which appears set to lead to a watering down of many existing and proposed environmental protections. The Retained EU Law (Revocation and Reform) Bill contains legislation allowing the Government to revoke and repeal laws carried over into domestic law at the time of Brexit. This includes the Habitats Regulations, among others. The Government has also said that it intends to “ease” biodiversity net gain requirements.

Conservation and wildlife charities have been outraged by these proposals and the impact this could have on the environment and the promotion and growth of bio-diversity.

Whilst it seems that the Government proposals could render conservation covenants redundant just as they come into effect, we believe that there is still very much a future for them. Biodiversity net gain is already enshrined in the policies of many Local Plans – even if the statutory provisions never come into force – and there are many legal obstacles between the Government and removing the requirements of the Habitats Regulations from the statute books.

Nature-based solutions to the problem of nutrient enrichment are likely to be in high demand and they can be secured by utilising conservation covenants. If the legislation on biodiversity net gain comes into force as currently enacted, off-site biodiversity net gain will only be able to be secured by a section 106 agreement or by a conservation covenant. Off-site compensation outside the area of the LPA in which the relevant development is taking place will realistically have to be secured by means of a conservation covenant.

Conclusion

There has for many years been a lack of any provision in law for adequate environmental protections that will run with, and bind, the land in any local authority area. The growing use of conservation covenants and environmental compensation is good news for the protection of the environment and biodiversity and we believe that they offer real opportunities for conservation charities, whether large or small, to promote and protect the environment within their areas.

If you would like to discuss how you may be able to utilise conservation covenants or would like more information on the role these can play in your future property strategy, please contact Deborah Sharples on 01473 921732 or [email protected]

To discuss your charity land holdings and any proposed charity property transactions, please contact Hannah Harbottle or Louisa Saunders.