Conservation covenants: everything you need to know

What is a conservation covenant?

Conservation covenants are private, voluntary legal agreements to conserve the natural or heritage features of land in England. They can be a separate agreement or contained within a wider agreement, and their purpose is to conserve land and the natural environment.

They are an agreement made between the landowner, who will be the freeholder or leaseholder – often with at least seven years on their lease - and a 'Responsible Body' (the Secretary of State or a body designated by them).

The agreement must meet various requirements - it must be for a conservation purpose, include positive or negative obligations such as whether the landowner will agree to do or not do certain actions, and be intended for the public good.

A conservation covenant and any agreement containing the covenant must be executed as a deed. Where the duration is not specified, it will last indefinitely and cannot be brought to an end without a further agreement with the Responsible Body to terminate it.

Who are the responsible bodies?

Local authorities, charities, or other organisations whose main purpose is conservation which also meet specific criteria can apply to the Secretary of State to become designated as a Responsible Body.

The number of designated responsible bodies in the UK has increased since the beginning of the BNG regime, with the list maintained by the Department for Environment, Food & Rural Affairs (DEFRA).

If a Responsible Body ceases to operate, the Secretary of State for the Environment automatically becomes the custodian of a Conservation Covenant.

How are they enforced?

The Responsible Body is in charge of monitoring and enforcing obligations under the Conservation Covenant. Courts have the power to enforce compliance, with injunctions, orders for specific performance, and damages for breach possible outcomes.

What are conservation covenants for?

The government hopes a key use will be to support the new mandatory 10% Biodiversity Net Gain (BNG) requirement introduced by the Environment Act 2021.

These requirements apply for new development on large sites from 12 February 2024, small sites from 2 April 2024, and in 2025 for Nationally Significant Infrastructure Projects (NSIPs).

Only habitat enhancements secured by Conservation Covenants or planning obligations may be registered on the Biodiversity Gain Sites Register. Using the Statutory Metric, habitat enhancements are converted to biodiversity units that, once registered can be allocated to other developments.

For many landowners, the purpose of entering a Conservation Covenant will be to create tradeable biodiversity units for sale to developers who can't meet the mandatory 10% BNG requirement on their sites.

How long does a conservation covenant last?

The landowner and Responsible Body can decide how long they last, but it is recommended a duration is expressly set out. 

If no duration is stated, they will last indefinitely or until the lease ends if the landowner is a leaseholder.

BNG will need to be secured under the Conservation Covenant for at least 30 years after completion of the works for the purpose of habitat enhancement.

Could they be a commercial opportunity?

Some landowners may view Conservation Covenants as a business opportunity aligned with their ESG credentials and as such, may wish to offer biodiversity units to the market.

Long-term or multigenerational obligations will affect how land can be used as well as its value. Landowners considering Conservation Covenants would be well-placed to take advice on the legal consequences as well as the potential tax and financial implications of doing so.