Conservation covenants – what are they?

Conservation and the well-being of our environment is becoming an ever more important global topic and contributing to and securing a long-term strategy for improving our environment is high on the agenda for individuals, corporations and our Government alike.

Until recent years, and unlike many other jurisdictions, England and Wales lacked a legal mechanism through which landowners could enter into agreements with a “responsible body” (such as a conservation organisation or public body) to bind their property for a conservation purpose. Instead, landowners and these bodies would rely on complex and often expensive legal workarounds to enable such agreements to be enforced.

What legislation was introduced for conservation covenants?

In 2014, following an investigation, the Law Commission published a report into the need for “conservation covenants” and concluded that legislation should be introduced. On 9 November 2021, the Environment Act 2021 received Royal Assent, providing governance to allow environmental targets to be achieved.  Conservation covenants are just one of the measures introduced to assist the Government in achieving the objectives targeted by its 25-year Environment Plan.

Whilst covenants have been used widely in property law for hundreds of years, these traditional covenants usually attach to the land to benefit or burden that or other land rather than to create an agreement between a landowner and a responsible, but unrelated, public body to either do or not do something on their land for conservation purposes, such as conserving the natural or historical environment of that land.

What are the benefits of conservation covenants?

The conservation covenants can be positive or restrictive in nature or a combination of both. For example, a restrictive obligation could be imposed to require landowners not to use a particular type of pesticide on land. Alternatively, a positive obligation could require a landowner to preserve and nurture an area of ancient woodland or conserve marshland. As with other types of covenants the intention is that the covenants bind the land to which they apply, meaning that successors in title are also bound. This aids the creation of a long-term conservation plan for land, regardless of ownership.

The parties entering into an a conservation covenant have the freedom to negotiate obligations that suit their circumstances, but once entered into those obligations become fixed and bind the parties either for a fixed period or in perpetuity.

In order to be binding on future owners of the land, the covenants must be registered as local land charges by the responsible body rather than the landowner.  The covenants: –

• Must have a conservation purpose and be for the public good;
• Can only bind the land if the landowner has a sufficient interest in the land (either through freehold or long leasehold ownership);
• Must place an obligation on the landowner to do or not do something, or must give rights to the responsible body to do something on the land;
  Must demonstrate a clear conservation obligation; and
• In addition the document detailing the covenants must be executed as a deed.

Once entered into, conservation covenants can be enforced by the responsible body with the usual remedies of injunctions, payment of damages and specific performance being available.

Why should you join a conservation covenant?

Whilst entering into any form of covenant seems on the face of it to be an unattractive proposition, particularly if they bind in perpetuity, there can be benefits doing so. For example, the responsible body may be prepared to make a one-off premium payment or a recurring payment for continued conservation work on that land. Equally, a landowner may have intended to carry out conservation work anyway so may not be averse to doing so in exchange for an income.

It is likely that the use of conservation covenants will become commonplace due to the ever growing need for carbon offsetting and the introduction of biodiversity net gain for new developments in England. These environmental measures could help landowners by unlocking value in their land (by creating an income for future generations) whilst also allowing them to retain ownership and assist them to achieve their environmental improvement goals.

Once created, the only ways of releasing conservation covenants is by mutual agreement between the responsible body and the landowner (or their successor) or by application by either party to the Upper Tribunal. If a party bound by, or benefitting from, the covenant wishes to have the obligation discharged they may apply for release. In deciding whether to discharge the covenant, the Upper Tribunal must consider:

• Whether it is reasonable to do so given the circumstances surrounding the application;
• Whether there has been a material change in circumstances since the covenant was created;
• Whether the covenant serves the conservation purpose it was intended for; and
• Whether the covenant serves the public good.

When deciding whether to exercise its powers, the Upper Tribunal will also consider whether the conservation purpose could be served equally well by an obligation on other land in which a landowner applicant holds an interest.

Whilst the Upper Tribunal may order the release of the covenant, it may impose a requirement for the applicant to make a compensation payment in respect of the loss of benefit of the covenant which could be a significant sum.

A covenant, whether for conservation or otherwise does have the potential to create  unintended outcomes if prepared incorrectly and as there is limited scope for release from covenant once granted careful consideration and drafting is required to ensure that it is appropriate to the landowner and responsible body and has the desired effect.