England and Wales move a step closer to conservation covenants

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What is a conservation covenant?

A conservation covenant (CC) is a voluntary agreement between a landowner and a responsible body, whereby the landowner promises to carry-out or refrain from carrying-out activities on his / her land to achieve a conservation objective. For example, the purpose may be to preserve a historic building, maintain woodland, cultivate a particular plant species, or protect farming land in a certain way.

CCs are in use in other jurisdictions such as Australia, the USA and Scotland, but do not currently exist in English and Welsh law. This reflects the traditionally cautious approach adopted, based on the view that subsequent landowners should be free to make independent decisions regarding land-use and not restricted by parties who are no longer living. As a result, there have historically been very limited circumstances in which a binding obligation on land (i.e. a covenant) will endure beyond the landowner who created it. It has largely been impossible for a landowner to create binding and positive obligations for general purposes, rather than to benefit specific neighbouring land.

Why the sudden interest?

Recent years have witnessed growing interest in landowners being able to create binding positive (requiring something to be done) and restrictive (promising something is not done) obligations for the public’s benefit and wider purposes. Green spaces, remarkable buildings, unique habitats and historic places are increasingly regarded as important – giving a sense of identity and community, encouraging recreation and healthy relaxation, broadening socio-cultural understanding, and boosting the economy. However, in turn, parties have had to utilise convoluted methods to circumvent the restrictive rules regarding covenants to ensure conservation objectives can be achieved.

In 2012, the Law Commission began work on its project to consider:

  • whether a case existed for the introduction of CCs into the law of England and Wales; and
  • if so, what elements would comprise a new statutory CC scheme.

After a lengthy consultation, the Law Commission’s Consultation Report was published in June 2014 and recommended the introduction of a new statutory CC scheme in England and Wales.

What are the main elements of the CC scheme likely to be?

The Report includes a draft Conservation Covenants Bill, which would introduce the CC scheme into law. Under the scheme, CCs would operate as follows:

  • CCs could only be formed via written agreement between two parties – (1) the landowner with the freehold estate or leasehold interest of more than seven years and a (2) ‘responsible body’. The ‘responsible body’ will be limited to include local authorities, registered / exempt charities and public bodies such as Natural England in the main. These will be listed as such by the Secretary of State.
  • The ‘responsible body’ does not need to hold neighbouring land, but will take on responsibility for monitoring and (where necessary) enforcing the landowner’s obligations. It may also assume obligations itself as part of the CC.
  • The CC must be made (1) for the public good and (2) for a conservation purpose. The draft Bill takes a broad view of what can be defined as a ‘conservation purpose’.
  • CCs could contain both restrictive and positive obligations – the departure from the historic approach apparently being justified by the importance of looking after the nation’s environment and heritage.
  • There would not need to be any ‘benefitted land’ for the CC to take effect and it would bind successors in title to the original landowner. Hence all subsequent owners, even after the landowner has disposed of his / her interest, would be under the same obligations.
  • The land would be bound in perpetuity, unless the CC specified a shorter time-frame. However, where CCs were created in relation to leasehold land, it is intended these would only last for the remainder of the original lease term – again, unless a shorter term was specified.

An interesting point regarding the scheme as proposed, is that where it relates to leasehold land, the freeholder’s consent is not required before the leaseholder enters into a CC. Despite the fact the land would be bound in perpetuity and the long-term nature of CCs however, there is some flexibility in that subsequent changes in circumstances could be reflected by modification or discharge of an existing CC.

When could CCs be used?

The Report outlines the following potential uses for CCs:

  • philanthropic uses;
  • securing heritage and community assets;
  • as an alternative to purchase or disposal by conservation organisations;
  • as payment for eco-system services and agri-environment schemes; and
  • in biodiversity offsetting.

For example, the owner of a family estate may decide to enter into a CC so he / she can still keep the estate in the family after death, but also ensure surrounding woodland is protected for future generations, with it being maintained and open to the public. The woodland would not then have to be bequeathed to a conservation organisation for these aims to be achieved. In turn this would benefit the conservation organisation, in that they could ensure the protection of the land without actually having to buy it.

How does this link with biodiversity offsetting?

The Law Commission envisages that CCs could deliver long-term binding obligations currently sought in other ways for biodiversity offsetting purposes. Biodiversity offsetting is a way that conservation activities / schemes are implemented to compensate for losses or damage to nature, where such loss / damage is unavoidably caused by new development. Newer, bigger or improved nature sites have to be provided.

Currently, biodiversity offsetting is to be taken into account by local planning authorities both at the development plan-making stage and when considering planning applications. The mitigation hierarchy of the National Planning Policy Framework is to be followed, so environmental harm should ideally be avoided, but (where this is not possible) mitigation is then the next step.

The concept of biodiversity offsetting is certainly controversial and has in no way been fully developed yet in England and Wales. Only over time will it be possible to see if the approach brings positive environmental benefits or simply gives a way for detrimental development to go ahead. However, CCs do appear to offer a legal tool for delivering binding and permanent obligations on an offset site.

What is next?

Currently a decision is awaited from the government on whether and how biodiversity offsetting is to be implemented, following DEFRA’s consultation paper in September 2013 and a recent report on the topic from the House of Commons’ Environmental Audit Committee. With the Law Commission’s CC proposals also under governmental consideration, it is likely to be early 2015 before any further progress is made.

For more information contact the Planning & Environment team at Walker Morris.