Why legal agreements matter
BNG doesn't work on trust. Any habitat created or enhanced for biodiversity net gain — whether on-site or off-site — must be legally secured for a minimum of 30 years. Without a legal agreement in place, a gain site cannot be registered on the national Biodiversity Gain Sites Register, and its units cannot be sold to developers.
There are two mechanisms for securing BNG habitats, each with distinct characteristics. Choosing the right one affects speed, cost, flexibility, and the long-term monitoring burden.
The two mechanisms at a glance
Conservation Covenant
- ✓Private agreement between landowner and a designated responsible body
- ✓Available since 30 September 2022
- ✓Must be executed as a deed
- ✓Registered as a local land charge
- ✓Binds future landowners on sale of the land
- ✓Monitored by the responsible body (specialist organisation)
- ✓Often faster to establish than S106
- ✓Greater flexibility — terms bespoke between two parties
- ✓LPA is not directly involved
Section 106 Agreement
- ✓Legal agreement between developer/landowner and the Local Planning Authority
- ✓Long-established planning mechanism
- ✓Signed as part of the planning process
- ✓Registered as a local land charge
- ✓Binds future landowners on sale of the land
- ✓Monitored by the LPA (may have capacity constraints)
- ✓Can be slower — tied to LPA processing times
- ✓More standardised terms
- ✓LPA is a direct party to the agreement
Detailed comparison
| Feature | Conservation Covenant | Section 106 |
|---|---|---|
| Counterparty | Designated responsible body (Wildlife Trust, RSK Wilding, LPA, or other designated organisation) | Local Planning Authority |
| Legal basis | Environment Act 2021, Part 7 | Town and Country Planning Act 1990, Section 106 |
| Typical timeline | 8–16 weeks (private negotiation) | 12–24+ weeks (LPA capacity dependent) |
| Flexibility | High — terms are entirely bespoke between the two parties | More constrained — subject to CIL regulations, LPA policies |
| Monitoring | Responsible body (specialist conservation organisation with dedicated expertise) | LPA (may have resource constraints and competing priorities) |
| Cost | Varies by responsible body — typically covers due diligence, legal drafting, and 30-year monitoring | LPA monitoring fees apply (set by the authority) |
| LPA involvement | Not required — this is a private agreement | LPA is a direct party |
| Runs with land? | Yes — binds all future landowners | Yes — binds all future landowners |
| Dispute resolution | Between parties, or Lands Chamber of the Upper Tribunal as last resort | Standard planning dispute mechanisms |
| Duration | At least 30 years for BNG; indefinite if not specified on freehold | At least 30 years for BNG |
| Modification | By agreement between parties, or Lands Chamber application | By agreement with LPA, or Section 106A/106B application |
| If counterparty fails | Secretary of State steps in as interim custodian until replacement appointed | LPA continues to exist; obligation persists |
Conservation covenants in depth
Conservation covenants were introduced under Part 7 of the Environment Act 2021 and have been available since September 2022. They are a relatively new legal tool but have rapidly gained traction in the BNG market because they offer speed and flexibility that S106 agreements often cannot match.
How covenants work
A conservation covenant is a private, voluntary agreement between a landowner and a designated responsible body. The agreement sets out how the land will be managed for conservation purposes — in the case of BNG, this means maintaining and enhancing habitats to deliver biodiversity units over a minimum 30-year period.
To be valid, a covenant must:
- Be executed as a deed by both parties
- Have a conservation purpose — conserving, protecting, restoring, or enhancing the natural environment
- Be for the public good
- Be registered on the appropriate local land charges register
- Contain obligations that are either positive (requiring action) or restrictive (prohibiting action), or both
What is a responsible body?
A responsible body is an organisation designated by DEFRA to enter into conservation covenants. They are the essential counterparty who monitors compliance, enforces breaches, and ensures the covenant delivers its conservation objectives.
To become a responsible body, an organisation must:
- Be a public body, charity, or other organisation with conservation-related main purposes or activities
- Have adequate capacity, expertise, governance, and financial viability
- Be based in the UK with ability to properly carry out covenant functions
- Submit an application to DEFRA (typically processed within 12 weeks)
Current designated responsible bodies include Wildlife Trusts across England, RSK Wilding, LPAs that have applied for designation, and other conservation organisations. DEFRA maintains and publishes the full list of designated responsible bodies.
Responsible bodies must submit an annual return to DEFRA (by 31 March each year) detailing the total number of covenants held and the area of land covered.
What happens if the responsible body fails?
If a responsible body ceases to exist or loses its designation, the legislation provides a safety net: the Secretary of State steps in as an interim custodian until a replacement is appointed. The covenant obligations transfer to the Secretary of State, but only for future performance — they have no liability for existing breaches.
A responsible body can also unilaterally appoint a replacement (unless the covenant terms prohibit this). If a landowner wants input into this process, the covenant agreement should include contractual provisions requiring their consent before any transfer.
Section 106 agreements in depth
Section 106 agreements are a well-established planning mechanism that has been used for decades to secure planning obligations. In the BNG context, they are used to secure both significant on-site habitat gains and off-site biodiversity delivery.
How S106 works for BNG
A Section 106 agreement is negotiated between the developer (or landowner) and the LPA as part of the planning process. For BNG purposes, the agreement typically covers:
- The habitat creation and enhancement commitments
- A Habitat Management and Monitoring Plan (HMMP)
- The 30-year management obligation
- Monitoring fees payable to the LPA
- Reporting requirements
- Remedies for non-compliance
S106 agreements are particularly common for on-site BNG where the LPA is already involved in the planning decision. They are also used by LPAs that have chosen to act as the counterparty for off-site BNG, rather than leaving this to third-party responsible bodies.
LPA capacity challenges
One of the practical challenges with S106 agreements for BNG is LPA capacity. Many planning authorities are still building their BNG expertise and processes, which can lead to delays. The government has committed £15.67 million over the transition period to support LPA preparation, but resource constraints remain a common issue.
This capacity gap is one reason why conservation covenants have gained traction — they allow off-site BNG to be secured through specialist responsible bodies without adding to the LPA's workload.
Which should you use?
The choice between conservation covenant and S106 depends on your circumstances:
| Scenario | Recommended | Why |
|---|---|---|
| Securing on-site significant habitat gains | S106 | The LPA is already party to the planning permission — keeping everything in one agreement is simpler |
| Registering an off-site habitat bank | Conservation covenant (usually) | Faster, more flexible, specialist monitoring by a dedicated responsible body |
| LPA has limited BNG capacity | Conservation covenant | Avoids adding to the LPA's workload; responsible body handles everything |
| LPA is itself a designated responsible body | Either works | Some LPAs have set themselves up to offer both routes |
| Landowner wants maximum speed | Conservation covenant | Private negotiation is typically faster than LPA-dependent S106 timelines |
| Developer needs to secure planning permission quickly | S106 for on-site; covenant for off-site | On-site gains are best secured through the planning permission itself |
| Buyer preference for durability | Conservation covenant | Specialist monitoring and dedicated oversight may command a premium |
The Habitat Management and Monitoring Plan
Whichever legal mechanism is used, the agreement must be accompanied by a Habitat Management and Monitoring Plan (HMMP). This is the practical document that sets out exactly how the habitats will be created, managed, and monitored over the 30-year period.
An HMMP typically covers:
- Target habitats and their condition objectives
- Management prescriptions (what work will be done, when, and how)
- Monitoring schedule (frequency of surveys, what will be measured)
- Trigger points for remedial action if targets are not being met
- Reporting requirements to the responsible body or LPA
- Financial provisions for the 30-year management period
Key contacts
- Conservation covenants: conservation.covenants@defra.gov.uk (DEFRA)
- Responsible body applications: Same email — DEFRA aims to process within 12 weeks
- Annual returns: Due by 31 March each year to the same address
- Full guidance: GOV.UK conservation covenant guidance
- Designated bodies list: GOV.UK designated responsible bodies