Conservation covenants: Overview and benefits

Conservation covenants are registered as a local land charge so that future buyers are aware of them. They can be for any length of time but run in perpetuity if no time is specified. For this duration, a conservation covenant, as outlined in thegovernment guidance, should “aim to conserve (protect, restore or enhance) the natural or heritage features of the land and be for the public good”.

A conservation covenant agreement must both:

• be for the public good
• have a conservation purpose.

The ‘public good’ means the covenant must benefit the public in some way.

Conservation can be for land where the main purpose, functions or activities are:

• conservation or restoration of the natural environment and resources (or the setting of the land)
• conservation of places of archaeological, architectural, artistic, cultural or historic interest (or the setting of the land).

The land involved can be with or without an existing statutory designation.

Conservation covenants are needed because land law has limits on what agreements can be passed on to future owners of land. Agreements that restrict the use of land (restrictive covenants) can bind future owners, but, prior to conservation covenants, positive obligations could not within private agreements.

Conservation covenants can include positive obligations, as well as restrictive ones, so they can include things that must be done on the land as well. They provide an alternative to a Section 106 legal agreement used in planning. They allow much more freedom to make bespoke agreements that are tied to the title of the land into the long term.

This will allow far more confidence where the nature recovery and enhancement may be funded by new nature finance mechanisms and investment. This may be outside, or in addition to, that through the planning system or biodiversity net gain (BNG).

With the right legal advice and support, both parties (landowner and responsible body) must:

• decide how to achieve a conservation outcome that’s for the public good
• agree on the terms of the conservation covenant, for example, how long it lasts for, and set these out in the agreement
• make it clear that the agreement is a conservation covenant
• register the conservation covenant on the appropriate local land charges register so that anyone who acquires the affected land in the future will know that they must legally follow the covenant.

The agreement will be executed as a deed and signed by both parties. The agreement itself may include restrictive obligations (the things that cannot be done on the land), positive obligations (the beneficial things that will be done on the land) and those things the landowner must allow the responsible body to do on the land. Ancillary obligations can also be used (e.g., to make sure maintenance costs are financed or inspections are held).

A conservation covenant can be amended by agreement between the parties. Unlike a Section 106 planning obligation, you can do this at any time and do not have to wait a required period, although the covenant itself will also set out agreed timescales for review.

As a responsible body, though, we would need to review any proposed amendment through our ecologists and legal team to make sure that the land is benefiting and that it still meets the purpose of the covenant. It then will need to be re-registered as a local land charge.

If a proposed amendment is not agreed, the Upper Tribunal will be able to hear applications from either party to modify or discharge a conservation covenant (but it is important to note that affordability is not a consideration, so this is a critical consideration from the start).

Our conservation covenants will include:

• length of term
• payment plans
• any attached land management plans
• maintenance payments to third parties
• monitoring needs, frequency and reporting
• dispute resolution methods.

A conservation covenant is a private agreement between two parties and therefore is very flexible and can incorporate a wide variety of clauses tailored to every situation.

Any land management plans or biodiversity gain plans (BGP) will be reviewed by our team of ecologists to ensure that they meet our standards.

Our legal team will finalise the details of the agreement, and you should get your own independent legal advice before entering into an agreement.

First and foremost, our approach starts with the ecological context and our relationship with the agreement holder.

Our early design work for conservation covenants will include reviewing the ecological data and information before finalising the agreement. Robust and realistic outcomes (ideally tied to government guidance set out in the habitat management and monitoring plan (HMMP) template and its companion document) will mean less need for enforcement in the future. Ongoing relationships help make sure that delivery of obligations continues on trajectory in the interests of both parties.

We will undertake our own monitoring of delivery to suit the agreement (i.e., we need to be content that the required biodiversity uplift is being delivered), but each responsible body is required to have clear policies in place for dispute resolution and complaints should it appear that remedial action may be needed. This means that more formal enforcement proceedings (such as alternative dispute resolution methods or litigation) are the last step when all the other avenues have failed to provide resolution to the situation.

As this is a new area of regulation for nature recovery, we will be working with clients and the Department for Environment, Food and Rural Affairs (Defra), as well as professional institutions, e.g., the Chartered Institute of Ecology and Environmental Management (CIEEM), to ensure that we meet and help define good practice in this space.

If the conservation covenant relates to BNG, the most important documents for your responsible body to see when agreeing a conservation covenant will be the BGP and the HMMP. The relevant planning documents, mapping and ecological reports will also be required.

It is important that your responsible body approves the BGP and HMMP before any conservation covenant so that it is happy it is adequate, suitable and ultimately ecologically viable so that the delivery of biodiversity units within the legal agreement can be achieved and maintained for the duration of the agreement (currently 30 years for BNG).

Before we enter into a conservation covenant, there will be a legal due diligence process we will need to undertake. This is to ensure that the land is suitable and has no pre-existing and obstructing legal obligation on it. This process could include:

• checking the land registry title for land charges, rights of way and existing covenants
• local searches on the land for existing obligations such as conservation areas, sites of special scientific interest (SSSI) and local byelaws
• depending on the work needed, environmental searches may be needed to confirm factors such as flood risk, mining sites and the protection of watercourses.

This process is similar to an investigation of title completed by a conveyancer when purchasing land. It may be that your solicitor or conveyancer has completed these investigations recently; therefore, we could liaise with your solicitor and review the documents instead of duplicating the process.

One of the main differences between the two legal agreements is the enforcement body.

• Section 106 agreements are planning obligations entered into with the local authority.
• Conservation covenants are private contracts entered into with a responsible body.

Section 106 agreements only exist within the planning system; however, conservation covenants are not restricted to this and can cover a wider range of purposes.

A conservation covenant is able to restrict activities on land and can ensure positive obligations to take particular action for the public benefit. They are bespoke private agreements, meaning that they are flexible and can include a wide range of clauses to fit the needs of the signatories, including maintenance payments to third parties, thus making the long-term management of the land much easier.

If you are going through the planning process, you may have an existing Section 106 agreement that provides other restrictions and obligations but does not adequately cover the land management needed for your conservation or BNG plan.

Therefore, it may be that a conservation covenant is wanted to supplement the Section 106 agreement, especially if some of the BNG delivery is off-site.