Biodiversity Net Gain and legal considerations for landowners
Biodiversity New Gain (BNG) is a phrase landowners will become very familiar with over the next couple of years, as it offers them an opportunity to secure additional income and a new revenue stream.
BNG is already a requirement of the National Planning Policy Framework and National Planning Practice Guidance so it is not a completely new concept. I’ve been dealing with these projects in my role as trustee for various charities and their recent property developments.
The difference now is that the draft Environment Bill sets out a number of proposals for developers to require them to achieve a 10% improvement to biodiversity value and whilst a net gain on the site of the development is likely to be preferred, in many cases that won’t be possible. Landowners could therefore offer land for biodiversity projects and generate additional income at the same time.
What legal considerations should landowners therefore take into account before entering into any agreements with developers?
They should consider whether any mortgage terms or covenants will be breached by participating in a scheme.
Secondly, are they happy with the land being taken out of production for 30 years or more and what will be the ongoing costs to manage and maintain it and who is responsible for those.
Also, will you risk generating an unintended IHT bill for future generations which reduces the financial gains to be made and could result in other land or assets needing to be sold to pay for it. It is certainly likely the Chancellor will look at many new ways to increase revenues to pay for the Covid-19 pandemic and financial measures recently extended to businesses and the self-employed and reviewing or changing APR could be one of them.
Lastly there will need to be a full understanding of the ongoing responsibilities to avoid breaching them and possibly opening oneself up for legal action or financial penalties. Taking legal advice will therefore be vital to understand the detail of any agreement.
Currently every local authority has a different approach to Biodiversity Net Gain and without any standardisation this will inevitable cause issues in the future.
We are happy to review any documentation and advise on the legal implications of any future agreement to protect you and your land interest.