This article is part of our developer‑focused series on Biodiversity Net Gain. We do not advise on the content or approval of biodiversity gain plans. Our focus is the commercial and land implications—how BNG affects acquisition strategy, conditionality, timing and long‑term obligations.
You’ve identified the site, agreed heads of terms, and the planning case appears workable. Increasingly, friction comes later — when biodiversity net gain (BNG) emerges as a barrier to lawful commencement and begins to reshape timing, cost and deal certainty.
While the content and approval of biodiversity gain plans sit with planning and ecological specialists, BNG has significant transactional consequences. This article focuses on the issues developers can address through deal structure, documentation and risk allocation, rather than the technical delivery of BNG itself.
Heads of terms: identifying BNG risk early
BNG can prevent lawful commencement until a biodiversity gain plan has been approved, even where planning permission has already been granted. From a transactional perspective, this introduces an additional pre-commencement gate that is best acknowledged at the outset.
In heads of terms, developers are increasingly:
- identifying biodiversity gain plan approval as a distinct milestone, alongside planning permission and funding, and
- flagging the potential need for off-site biodiversity gains or statutory credits, where the position is not yet clear.
Identifying these issues early helps ensure that pricing, conditionality and programme assumptions reflect the inherent uncertainty, rather than treating BNG as a detail to be resolved later.
Conditionality: separating BNG from planning consent
A common risk is to bundle all pre-commencement matters into a single condition requiring the grant of “satisfactory planning permission”. That approach can obscure the distinct risk posed by BNG.
In practice, many developers now distinguish between:
- a condition relating to the grant of planning permission; and
- a separate condition requiring approval of the biodiversity gain plan, together with evidence that any necessary legal mechanism (such as a planning condition, section 106 agreement or conservation covenant) has been put in place and is capable of enduring for at least 30 years.
This reflects the reality that a biodiversity gain plan can be delayed or refused after planning permission is granted, and that its long-term obligations can have material implications for title and future disposals.
Longstop dates: allowing for additional approval stages
BNG introduces further approval steps, including the execution of long-term legal agreements and, where relevant, the registration and allocation of off-site gains. Where contracts use a single longstop date aligned to planning permission, this can create completion pressure before the project is lawfully able to start.
Developers are therefore factoring in additional flexibility, whether through:
- split longstop dates (for planning permission and BNG approval); or
- a buffer period following the grant of permission to allow BNG matters to be resolved.
This approach can be particularly important where funding, contractor mobilisation or marketing assumptions depend on a clear commencement date.
Price and overage: accounting for off-site costs and credits
BNG can affect scheme viability in different ways. On-site habitat provision may reduce developable area or constrain layout, while reliance on off-site biodiversity units or statutory credits can introduce additional and sometimes unpredictable cost.
From a commercial perspective, this has led to greater focus on:
- price adjustment mechanisms if off-site units or credits are ultimately required;
- targeted overage provisions to share upside where design solutions avoid off-site provision, or to share downside where additional costs arise; and
- the allocation of market risk, recognising that off-site unit availability and pricing are not guaranteed.
These are not planning issues, but valuation and risk-sharing questions that sit squarely within the deal.
Title and long-term obligations: thinking beyond consent
Where land is relied upon to deliver BNG, the associated obligations must be secured for a minimum of 30 years. Whether achieved through a planning obligation or a conservation covenant, these commitments bind the land and will affect future owners.
This has implications for:
- due diligence, particularly where existing or proposed obligations may restrict use or impose management requirements;
- future disposals, ensuring that sale and lease documentation properly reflects ongoing maintenance and monitoring obligations across parcels or phases; and
- funding, as lenders increasingly seek clarity on who bears the cost of long-term management and how enforcement risk is addressed.
BNG obligations are therefore not merely “planning paper”, but enduring land commitments that require careful documentation.
Phased sites and promotion agreements
For outline or phased developments, planning authorities expect a coherent strategy for achieving BNG across the whole site. While the technical detail sits with specialist advisers, the commercial risk is that early phases consume the available BNG capacity, leaving later phases constrained.
From a contractual perspective, this often leads to:
- phase-by-phase checks that the overall BNG strategy remains deliverable, based on input from the relevant advisers; and
- internal allocation of land and management budgets to prevent front-loading of biodiversity provision.
These issues are particularly acute in promotion agreements and large strategic sites, where delivery is spread over many years.
Off-site gains: treating registration as part of deal certainty
Where a scheme relies on off-site habitat, registration and allocation on the national biodiversity gain site register are integral to approval and enforcement. In transactional terms, this means treating registration and the underlying legal agreements as part of the conditions precedent, rather than informal assurances.
Developers are also considering fallbacks, such as substitution rights or time extensions, if an intended off-site source becomes unavailable.
Allocating responsibilities across the team
BNG delivery depends on input from planning and ecological specialists, but contracts and documentation need to reflect that structure clearly.
Typically:
- developers remain responsible for commissioning ecological work and coordinating the biodiversity gain plan;
- landowners may need to cooperate with surveys or enter into long-term arrangements where habitat is provided on retained land; and
- transactional lawyers focus on ensuring that conditions, longstops, title and disposal documents accurately reflect the agreed risk allocation, without advising on the technical content of BNG itself.
Conclusion
BNG is not simply a planning hurdle; it is a deal-shaping variable with long-term consequences.
Developers who address BNG explicitly in their documentation — by separating it from planning consent, allowing realistic timeframes, pricing for uncertainty and planning for enduring land obligations — are better placed to manage risk and maintain momentum. Left until late, BNG can halt projects at precisely the point developers expect to be moving on site.
