Rural Estates Newsletter February 2023 - Flipbook - Page 24
8 – Conservation covenants: thinking
outside the BNG box
“How far should one generation be given freedom to dispose of
property in ways that will restrict the freedom of the next?” That was the
question posed in 1998 by the Law Commission, resulting in the 2009
Perpetuities Act, which curbed how much the “dead hand” of the past
owners could limit the actions of future owners.
Elizabeth Earle
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O tempora, o mores. In 2014, the Law Commission identified the need for a new legal
device, whereby current landowners could bind future ones: the conservation covenant.
The sections of the Environment Act 2021 (2021 Act) enabling conservation covenants
came into force on 30 September 2022 and since 29 November 2022 they have been
capable of being registered as local land charges to make them binding on
future owners.
The problem and the solution
Leaving aside the question of how desirable it is to seek to control the future, if one
wants effectively to conserve land, habitats and heritage, it must be done for more than
a few years at a time. The existing legal devices of positive covenants (which do not
bind successors in title) and restrictive covenants (which generally require there to be
neighbouring land that can benefit) are limited, and this is the problem that conservation
covenants were designed to solve.
Briefly put, conservation covenants are private, voluntary agreements between a
landowner and a responsible body, to do (or not to do) something on their land for
a conservation purpose for the public good and which are statutorily binding on
successors in title and protected as a local land charge. The three terms in bold are what
set them apart and we will return to them later.
On- and off-site Biodiversity Net Gain (BNG)
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Although already in effect under the National Planning Policy Framework, the
requirement to provide 10 per cent biodiversity net gain as a condition of planning
permission will become mandatory when Part 6 of the 2021 Act comes into force (due
November 2023). On- and off-site BNG can be secured using planning conditions,
s.106 Agreements or conservation covenants. However, the 2021 Act envisaged that
it may be preferable to use conservation covenants to secure off-site BNG, because
of the potential difficulties with enforcing planning obligations against third party
landowners. That said, there may be some bias towards continuing to use s.106
agreements and planning law, with their known enforcement procedures, because
they are more familiar to planning lawyers than conservation covenants which are, as
yet, untested.
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Either way, as developers would no doubt rather use developable land for
development, it seems likely that there will be a high dependence on off-site BNG. This
presents an interesting opportunity for landowners. Of course, careful thought needs
to be given to the pros and cons of locking up land in this way for 30 years or more,
not least the effect of such arrangements on wider estate planning and the availability
of, say, agricultural property relief, but there are obvious opportunities here for
creating an income stream from land which is otherwise low return or difficult to farm.
And another thing: could this create a market for, and bolster prices of, low-grade
agricultural land, where achieving a 10 per cent increase biodiversity would be child’s
play, while suppressing the value of land that is already biodiverse?
Rural Estates Newsletter
February 2023