Enforcement of Conservation Covenants

We previously discussed how Conservation Covenants work and how they might be used to secure biodiversity net gain here.

As of 27 July 2023, organisations can now apply to become a responsible body, with DEFRA aiming to deal with applications within 12 weeks of submission.

We could, in theory, start to see the first Conservation Covenants in place by the end of 2023.

By their nature, Conservation Covenants are intended to be long-term arrangements. Unless agreed otherwise, they will continue to run:

• indefinitely for Freehold land, or
• for the remaining duration of the lease for Leasehold land.

Conservation Covenants will also bind successors-in-title to the parties. When a landowner ceases to hold an interest in the land, they also cease to bound by or benefit from the Conservation Covenant with their successor taking their place in the agreement.

As a rule, the longer the term of the agreement, the higher the risk of default by one or both parties particularly where the identity of those parties have changed over time. Without active management, obligations imposed over a 30-year period, say, can be easily overlooked, forgotten or generally allowed to slip. So, what happens when one party defaults on their obligations?

Breaches

As private agreements, Conservations Covenants are enforceable between the parties through civil proceedings. The Environment Act 2021 (the Act) does, however, specify the remedies and defences available in the event of a breach of the covenant’s obligations. When considering the appropriate remedy, the court must account for any public interest in the obligation being performed.

Guidance issued by DEFRA has confirmed that new owners of land subject to a conservation covenant will take on liability for existing or past breaches of requirements in relation to the land.

Limitation

The Act also specifies that, for limitation purposes, any action founded on an obligation under a conservation covenant is to be treated as founded on simple contract. In other words, the parties will have six years from the date of any breach of the covenant’s obligations to take enforcement action through the courts. Though different time limits will apply to claims founded in negligence.

As with all breach of contract claims, when the six-year period starts to run will depend on whether the defaulting party has failed to comply with a one-off obligation or a continuing obligation.

The fact that one party may not discover the other party’s breach until after the limitation date has passed may not enough, by itself, to extend time to bring a claim.

Conclusions

Whilst a positive step forward in giving landowners flexibility as to how they protect and enhance our rural environment, questions remain over what happens when relationships between the parties break down.

Pinch points are likely to arise when land changes hands and agreements are dug out and reviewed. At which point, parties may find themselves out of time to enforce historic breaches or subject to enforcement action for breaches committed by a predecessor-in-title.

As always, the best advice is to seek early advice to prevent a dispute escalating.