Alistair Wallworth, partner in the Thrings Development of Land team, gives an overview of a new type of land charges known as conservation covenants.
Conservation covenants, introduced by Part 7 of the Environment Act 2021 (the Act), came into effect on 29th November 2022 as a means of protecting a “conservation purpose” for the public good. Conservation purposes are defined as:
- to conserve the natural environment of land or the natural resources of land;
- to conserve land as a place of archaeological, architectural, artistic, cultural or historic interest, or
- to conserve the setting of land with a natural environment or natural resources or which is a place of archaeological, architectural, artistic, cultural or historic interest.
Conservation covenants will be a key mechanism for assuring performance of Biodiversity Net Gain (BNG) obligations, ensuring that the land is put to its intended conservation purpose (and no other) and that any specific obligations are enforceable by the owner for the time being of the land affected.
Under the Act, the default duration for a conservation covenant will be indefinite where the land owner owns the freehold, or for the reminder of the lease term where the land owner is a leaseholder. It should be noted that the Act permits shorter periods, and bearing in mind the BNG requirement to monitor and maintain relevant habitats for 30 years following completion of the corresponding development, it seems likely that most BNG-related conservation covenants will be set up so as to mirror the BNG requirements.
As local land charges, conservation covenants will be binding on not only the original covenantor, but also successors in title. However, unlike other land charges, conservation covenants must be registered in order to be enforceable against future owners. As the Act allows conservation covenants to be entered into with other responsible bodies, such as conservation charities, there would appear to be a greater risk of non-registration or delayed registration – it remains to be seen how effective these non-council entities will be at depositing the relevant particulars with council local land-charges departments.
Conservation covenants’ status as local land charges also gets around two limitations affecting covenants relating to land created between seller and purchaser and their impact on successors in title to those parties:
- There is no requirement for there to be identified land benefitting from the covenant;
- The covenants can be positive in nature (e.g. to take proactive steps to manage a habitat) and yet still run with the land and bind successors.
In addition to carrying out a local search, purchasers should take other steps to establish if the land in question might be affected by a conservation covenant. Enquiry 13.4 of the Commercial Property Standard Enquiries is relevant, requiring the seller to disclose anything affecting the property that is capable of being registered on the local land charges register but is not yet registered.
Given the potential delay/non-registration for conservation covenants which may originate outside of a local authority, and notwithstanding the defence of the conservation covenant not binding future purchasers unless registered, the prudent approach in all cases (so as to avoid uncertainty and future complications) would be to demand a substantive response to enquiry 13.1 and not being told to “rely on your searches”.
If you have any questions about issues raised in this article please contact Alistair Wallworth.
