The statutory framework for conservation covenants, set out in the Environment Act 2021, came into force in September 2022. However, we are still waiting for key guidance – which the government originally promised would be published in early 2023 but this has now slipped to simply sometime this year – before the new regime can properly get going. In the meantime, let’s take a look at what conservation covenants are and when you might want to use them, so you’re primed to take full advantage as soon as we hear from the government.

What are the specifics?

Conservation covenants are voluntary, private agreements between landowners and responsible bodies (see below) for the purpose of securing conservation benefits in England. In order to be a conservation covenant, an agreement must:

1. relate to land in which the landowner has either a freehold interest or a leasehold interest of greater than seven years from the date of grant;
2. require a landowner to do or not to do something, or allow or require the responsible body to do something on such land;
3. have a conservation purpose, i.e. it must require the protection, restoration or enhancement of the natural environment, natural resources, places of archaeological, architectural, artistic, cultural or historic interest, or the setting of such environment, resources or places;
4. be for the public good;
5. be in the form of a deed; and
6. be clear that the parties intend to create a conservation covenant.

Responsible bodies must register conservation covenants as a local land charge, at which point they will (save for the below exceptions) bind future freeholders and leaseholders in perpetuity or for the remainder of the lease term, respectively, unless a shorter period is agreed.

Is there anyone not bound?

Successors in title will not be bound if their immediate predecessor isn’t. It’s therefore essential that the covenant is registered as soon as possible and, importantly, before any new interests are created or the land is sold. Tenants who become successors in title by entering into a lease for a term of seven years or less from the date of grant will not be bound by any positive conservation covenants. A landowner will no longer be bound once it has parted with its interest in the land.

What if there’s a breach?

If any party breaches a conservation covenant, the other party may apply to court for an injunction, specific performance, damages or an order for payment. There are limited defences against such proceedings. Landowners should also be aware that, where they are in breach, the court can award exemplary damages where it sees fit – for example, if a landowner has developed land in breach of a conservation covenant, the court could deprive them of any profit they made in doing this.

Who is a responsible body?

A responsible body is the Secretary of State or any body it designates as such. A body must apply to the Secretary of State to be a responsible body – and we are waiting for guidance on how to do this. The Secretary of State will then only make a designation if it’s satisfied that the body is suitable to be a responsible body and, for any body that isn’t a local authority, some of its main purposes, functions or activities relate to conservation. The Secretary of State will publish an up-to-date list of all responsible bodies, and responsible bodies must make annual returns to the Secretary of State setting out information about any conservation covenants they are a party to.

A responsible body under a conservation covenant may appoint another responsible body to take its place, unless the covenant states otherwise. The Secretary of State may also revoke a responsible body’s designation if the body asks it to or if it’s no longer satisfied that the above criterion is satisfied. In such a case, the Secretary of State will effectively step in as custodian to any conservation covenants for which the body was the responsible body, until it either appoints a new responsible body, or elects to be the responsible body itself, for that covenant. However, the Secretary of State will not be liable for any of the responsible body’s obligations while it is custodian and liability for existing breaches will not be transferred to any newly appointed responsible body. Consequently, landowners should give careful thought to which responsible body they contract with, because if, in return for the landowner complying with certain obligations, the responsible body pays the landowner in instalments and any of those instalments fall due during a custodian period, the landowner could be left out of pocket.

Given that the success of conservation covenants will hinge on effective monitoring and enforcement, any bodies contemplating becoming a responsible body will need to consider the resource implications of doing so, as taking enforcement action (when needed) and complying with annual reporting requirements will be time consuming and costly.

When would you use a conservation covenant?

In the planning sphere, conservation covenants will come in handy for developers looking to satisfy their biodiversity net gain requirement (i.e. the requirement for the majority of new developments in England to deliver 10% BNG compared to the pre-development biodiversity value of the development site) by securing offsite habitat mitigation. They can also be used to help secure other environmental mitigation, such as carbon and nitrate offsetting.

Landowners, especially those whose land isn’t ripe for development, can use them to generate a new source of income from either developers or responsible bodies. For example:

1. by enhancing the habitat on their land, entering into a conservation covenant to secure the delivery of that, and then selling the benefit of that covenant to developers – this will become more prevalent as nature markets become more established, and could be especially useful for charities who are looking for ways to fund their charitable purposes whilst also delivering conservation benefits; or
2. by restoring and maintaining a woodland, to help mitigate local flooding, whilst also granting the public access, in return for annual payments from a responsible body.

There are also benefits for responsible bodies (like charities) who don’t have the financial means to buy land for conservation purposes, but can instead use them to expand their reach across England by paying landowners to carry out conservation work on the landowners’ land.

It’s important to remember that conservation covenants will not only be used for nature conservation – they can also be used for heritage means.

Ultimately, conservation covenants will be a useful long term tool for developers, landowners and responsible bodies alike, by ensuring that nature and heritage is enhanced and preserved, whilst simultaneously satisfying planning requirements and generating revenue for landowners.