Conservation covenants: Insights for landowners and developers
Conservation covenants play a crucial role in the evolving relationship between landowners and developers, especially regarding planning permission. As biodiversity net gain (BNG) planning requirements take effect, conservation covenants offer a legal method of ensuring that the improvement in biodiversity is protected.
Understanding conservation covenants is essential for navigating the planning process effectively. This section will explore their benefits and practical implications, highlighting how both landowners and developers can collaborate to achieve sustainability goals while fulfilling their responsibilities in land management.
Conservation covenants, landowners and developers
What will change for landowners and developers?
There will be some changes for landowners and developers, but to a large extent, the planning application process will be the same, with a few additions.
In the first instance, to grant consent, the local planning authority (LPA) will need sufficient detail on biodiversity net gain (BNG)
(submitted with the application) to be able to make its decision. This could be in the form of a BNG strategy or a BNG design stage report but will essentially need to reassure the LPA that a minimum of 10% BNG can be delivered (and broadly how, i.e., on-site, off-site, through the purchase of biodiversity credits, etc.).
Usually with any planning permission, there are ‘conditions’ that must then be met. These can range from not cutting down certain trees to working on the site only between certain hours. From 12 February 2024, there is now a standard post-consent biodiversity gain condition for developers (with some exceptions) requiring them to provide a 10% uplift in BNG.
What do landowners and developers need for planning permission?
The new planning condition requiring 10% mandatory BNG will mean that the LPA will need to approve a biodiversity gain plan (BGP) before any works on the development site can commence. This is a document detailing the current condition of the land using the statutory metric and the detailed plan to provide the uplift (including detailing the on-site and off-site delivery plans and any statutory credits that are to be purchased, with proof of purchase or at least intention to purchase).
The LPA will also want to ensure that the gain on the land will be secured through a legal agreement: either a Section 106 planning obligation or a conservation covenant. It may be that the landowner does not wish to register a conservation covenant or buy a biodiversity unit until they are sure their planning permission will be granted. In this situation, as the Responsible Body, we can provide assurance to the LPA that we are willing to enter into the agreement.
A habitat management and monitoring plan (HMMP) must be completed with the conservation covenant as part of the BGP (or alongside it). The BGP and/or HMMP will thus form part of the agreement and will detail relevant obligations and how these will be met over the term of the agreement (normally 30 years). It may be that the LPA wants sight of this also.
As a Responsible Body, we will need to have confidence in the deliverability of the BGP and HMMP, so these documents will be reviewed by our ecologists before the conservation covenant is drafted.
How are conservation covenants going to help landowners and developers?
Conservation covenants are going to help landowners and developers in several ways. While we await details on tax incentives and overall approaches to taxation from the government (see up-to-date report), the main benefits include:
- choosing your own Responsible Body and not needing to enter a Section 106 agreement with a planning authority, avoiding delay
- blending or stacking payments and not being restricted to BNG and the planning system
- protecting any features already created or managed unrelated to payments
- the flexibility of conservation covenants and the ability to make these as detailed and bespoke as necessary (including payment plans to third parties, which can assist in long-term land management)
- the ability to use conservation covenants for a wide range of uses that fall outside of the planning system.
We have expertise in nature conservation and heritage, so we can use covenants for both areas of public benefit.
Landowners and developers frequently asked questions
There is no minimum area of land you can put forward, but there are costs involved in a conservation covenant. Though your responsible body’s legal team will finalise the details of the agreement, you should get your own independent legal advice before entering into an agreement.
The cost for enforcement and monitoring is also provided for within the agreement, and there will be a need for ecological survey and reports to provide the detailed context required to agree a covenant. This is specific when a covenant is applied within the BNG system and can form a useful basis to provide necessary data and information of the use of conservation covenants in other situations. If you are looking into applications outside of BNG, however, it may be better to cooperate or collaborate through a structure such as a farmer cluster in order to group smaller areas of biodiversity value and aggregate them for sale together.
The covenant would still be based on an agreement tailored to each landowner and the features included from their land. However, this could be surveyed, negotiated and designed as a group based on the overall cluster delivery to help provide economies of scale and coordinate at a large scale. It may be that there is a template agreement for a cluster, with the specific detail relevant to each land parcel used to individualise the conservation covenant for each landowner.
There could also be a provision for meeting the overall targets for the cluster, but more bespoke agreements will require longer discussions because of their complexity.
This will work much like farmer clusters. Sites could require individual agreements, but these can be coordinated and negotiated together to achieve economies of scale. Alternatively, for a large area of land, there could be one conservation covenant covering the site, with attached HMMPs for different parcels. The most efficient method may depend on the area, the habitats and the goals for the land.
You can still enter into a conservation covenant if you are a tenant on the land; however, your lease must have more than seven years remaining. Government guidance states that if the land passes to a subsequent owner, they will also be bound unless the term of the lease is under seven years. In this case, the subsequent owner will be bound by the restrictive obligations but not the positive ones. The landlord will be bound by the positive obligations.
Restrictive obligations are ones that restrict the use of the land (e.g., not to use certain pesticides), and positive ones require the landowner to carry out an action (e.g., active planting of trees).