Off-site biodiversity gain: section 106 or conservation covenant

Off-site biodiversity gain has to be secured for at least 30 years, and there are two legal instruments that can do it: a planning obligation under section 106 of the Town and Country Planning Act 1990, or a conservation covenant under Part 7 of the Environment Act 2021. A conservation covenant biodiversity agreement is the newer of the two and the one designed for the job. The obligation is the one every planning lawyer already knows how to draft.

Which to use turns on three things: who owns the land, which authority's area it sits in, and how many developments the habitat will serve.

The two mechanisms available

Schedule 7A to the Town and Country Planning Act 1990, inserted by the Environment Act 2021, requires the biodiversity gain plan to identify how any off-site gain is secured. The statutory language allows either route, and both must run for at least 30 years from the date the habitat works are completed.

Both appear on the biodiversity gain sites register, which Natural England operates. Registration is what allows habitat to be allocated to a specific development, and an unregistered off-site gain cannot discharge the condition however well drafted the agreement.

How a planning obligation secures habitat

The obligation is familiar and that is its main advantage. The landowner covenants to create and maintain habitat to a stated specification for 30 years, with a management plan appended, monitoring reports at defined intervals and a monitoring fee.

Where the off-site land lies in the same authority's area as the development, and the applicant either owns it or has an option over it, a single agreement covering both sites is usually the fastest route. The authority is already drafting a section 106 for the development and adding a schedule costs less than opening a second workstream.

Two limits. A section 106 obligation is entered into with the authority for the area in which the land is situated, so an off-site parcel in the next district needs that district as a party, and cross-boundary agreements move at the speed of the slower legal team. And an obligation can be modified or discharged under section 106A once five years have passed, with an appeal to the Secretary of State if the authority refuses, which is a weaker long-term lock than it first appears.

How a conservation covenant works and who holds it

A conservation covenant is an agreement between a landowner with a freehold or a long leasehold interest and a responsible body, for a conservation purpose, which the parties expressly state is intended to be a conservation covenant.

It binds successors in title. It is registered as a local land charge. And because the counterparty is a responsible body rather than a planning authority, the land can sit anywhere in England without dragging a second council into the drafting.

The obligations are typically positive: create this habitat, manage it to this prescription, report annually. Positive obligations are exactly what restrictive covenants at common law could never deliver against successors, which is why the mechanism was created.

A covenant can also be combined with a lease or a management agreement so that the day-to-day delivery sits with a habitat bank operator while the covenant holds the land. That structure is common where the habitat serves several unrelated developments, and it pairs with the statutory register mechanics for off-site gain.

Responsible bodies and their designation

Only a designated responsible body can hold a conservation covenant. Local authorities are eligible by virtue of their status. Other organisations, including conservation charities and commercial habitat bank operators, apply to the Secretary of State under section 119 of the Environment Act 2021 and must satisfy criteria on purpose, capability and financial standing.

The list of designated bodies is published and it changes. Check it at the point of drafting rather than relying on a note from a previous transaction, and check that the body you are dealing with is designated for the right purposes.

This is the practical bottleneck. A covenant needs a body willing to take on 30 years of monitoring liability, and that body will charge for it and will want the management plan to be deliverable. Bodies decline schemes with unrealistic prescriptions. The question of who holds a covenant and on what terms is worth settling before the metric is finalised.

Registration on the biodiversity gain site register

Registration is a separate step from the agreement and it has its own evidence requirements: the land, the baseline habitat condition, the habitat creation or improvement proposed, the units generated by the statutory metric, and the legal mechanism securing it.

Two sequencing points catch people out. Habitat must be registered before units can be allocated to a development, and allocation is recorded on the register rather than in the section 106. So a biodiversity gain plan submitted with a signed agreement but no registration entry is incomplete.

The metric itself is where most of the risk sits. Baseline condition assessment on the receptor site, distance and spatial risk multipliers, trading rules and the time-to-target multipliers all change the unit count, and errors are found at plan approval rather than at application. A biodiversity net gain assessment has to be completed by a competent person under the Environment Act 2021 regime, so an AI-assisted draft is a starting point for that person rather than a substitute for them.

Enforcement routes under each mechanism

An obligation is enforced by the authority, by injunction or by action for breach of covenant, and the authority may recover expenses of carrying out works itself where the agreement provides for it. Authorities enforce unevenly, and a monitoring fee that was set in 2025 for a 30 year obligation is a slender basis for 2050.

A covenant is enforced by the responsible body, and the Environment Act provides for specific performance, injunction and damages. The body is a specialist with a reputational interest in enforcing, which is a point in the covenant's favour.

Modification is the reverse. A covenant can be modified by agreement or by the Upper Tribunal on defined grounds, which is a higher hurdle than a section 106A application after five years. If long-term certainty is the aim, the covenant is the stronger instrument.

Which mechanism suits which arrangement

Three patterns cover most cases.

1. Applicant owns off-site land in the same authority area. Use a section 106, as a schedule to the development agreement. Fewest parties, one legal process.
2. Third party habitat bank selling units to several developments, possibly across authority boundaries. Use a conservation covenant with a responsible body, plus a unit sale agreement with each developer.
3. Off-site land in a different authority area but controlled by the applicant. Either works. The covenant usually moves faster, because it avoids making a second council a party.

Illustrative example: a 38 dwelling scheme needing 2.4 off-site habitat units, with a candidate field two districts away. The section 106 route required both councils as parties and stalled on which authority would hold the monitoring fee. The covenant route needed a responsible body, a management plan and a registration entry, and completed in about half the time.

Costs, timing and the land agreement

Budget for four things on either route: the ecological work to establish baseline and enhancement, the legal drafting, the counterparty's fee, and the 30 year management cost, usually capitalised into a sinking fund.

Timing is the risk that bites programme. A covenant is only as fast as the responsible body's own approval process, and registration adds time after signature. Start the off-site conversation when the metric shows a shortfall, not when the biodiversity gain plan is due.

Draft your supporting documents on PlanScope and send the ecology drafts to a licensed ecologist for review before the gain plan is submitted.

This is general guidance, not legal advice. Biodiversity net gain agreements have long-term legal and financial consequences, so take advice from a solicitor and a qualified ecologist before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.