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Conservation Leases

Conservation leases are a voluntarily tool, usually used by nature conservation organisations and private landowners to ensure that land use of a property is compatible with nature conservation objectives. The lease may include all or part of a property, or a particular use, such as farming or forestry. The leaseholder gains the use rights and in consequence the lease is a form of management transfer agreement, where the leaseholder is responsible for the management of the land. Usually, this type of agreement between the landowner and the leaseholder involves economic transactions from the first to the second in the form of a rent. Conservation leases can be implemented by public or private organisations as well as private landowners, which means that the leased land can be owned by the public administration, private landowners, companies, the church or nature conservation organisations. However, some leases work differently, for example, emphyteutic lease. In that case, rights are attached to the land parcel. The emphyteutic lease of immovable property confers on the lease a real right which may be mortgaged.

Factsheet

Key characteristics

In conservation leases, a landowner and the leaseholder agree, based on free will, to a se-ries of conditions under which his/her land is leased. For that, an environment of mutual trust is essential. In lease contracts the objectives of land conservation or restoration ac-tions are specified as well as the restrictions to which the leaseholder agrees once the con-tract is formalised. If desired, additional activities such as volunteering, educational activi-ties or research could be implemented on the land. The duration of the leases is temporal and actual duration is negotiated between the parties according to national law. The tem-poral horizon between countries is despair and hence a homogeneous characterization across the EU for this tool is not possible at this point in time.
Conservation leases imply management transfer while property rights stay with the land-owner, hence these conditions have to fit with the objectives of the involved parties.

Key Characteristics:

  • Conservation leases constitute private agreements which involve the lease of land from a landowner, that can be public or private, to a lease holder with the objective of nature conservation or restoration.
  • The land lease is regulated by civil law.
  • The contractual agreement to establish a conservation lease is voluntary on both sides.
  • Land rights always stay with the owner, but the management of it is transferred to the leaseholder.
  • The duration of the lease variable and negotiated between the parties according to corresponding national law.
  • Compensation is provided through rent payments

Key Stakeholders

  • Landowner: can be public or private and is willing to achieve conservation purposes on their property by leasing the property to a third party.
  • Lease holder/land user: typically, a farmer willing to protect or restore natural values by restricting land uses to those compatible with conservation objectives linked to a property.
  • Land registry: records the conservation lease as part of the property title (optional).
  • Notary: documents the signing of the contract that establishes the rent and makes sure all administrative steps are taken (optional).
  • Nature consultant: evaluates the natural features and the potential of property and provides advice to landowner and leaseholder about what stipulations to include in the lease contract (optional).
  • Civil society: society can be involved through volunteering activities, environmental education or training and they can benefit from the goods and services provided by the leased land.

Rights and obligations

The formalisation of the lease does not impose conditions upon the landowner as rights and obligations will be detailed in each lease contract as a result of the negotiation between the parties. The non-profit aims of the lease should be clearly established in the contract. The lease can establish condition in issues like tillage, rotation, soil management, use of chemicals, logging rights, etc. Property rights always stay with the landowner, but management is transferred to the leaseholder. Once the conservation lease is terminated, no further rights or obligations apply to the involved parties if not specified differently in the lease contract.

Duration of rights

The duration of leases is variable, negotiated between the parties and must appear in the contract. Maximum or minimum duration will depend on the civil regulation in each country. It is recommended within the possibilities to sign lease contracts for long periods, for example, five years or more. This allows a tenant to invest in sustainable practices, which in turn can lead to increased soil health, higher crop yields, and added value to the land. After the finalization of the contract, depending on the country, the lease can be extended. Landowners and tenants can also use an automatic renewal clause to help encourage a long-term relationship. There are big differences among countries. From cases like the UK with 99 years maximum duration, to cases like Spain with 5 years minimum duration and the possibility of indefinite extensions.

Legal basis

Conservation leases are regulated by civil law and are different in each country. In France, conservation leases (“baux environnementaux”) were included as a new form of land leases in the Rural Code. The Administration and conservation entities can also lease land they own, both to nature conservation organizations, and to individuals who use them responsibly and respectfully from an environmental point of view.

Purpose and application

The purpose of conservation leases is often considered by stewardship organisations to carry out the management of agricultural and forestry estates of high natural interest or to secure uncultivated land in intensively exploited agricultural areas. There are also organisations that have capacity to conduct agricultural activity and make it an essential part of a land stewardship initiatives.

Economic transactions and fiscality

Conservation leases are based on the voluntary agreement between the parties, and economic transactions in form of the lease are involved. To compensate for the economic loss associated with the restrictions or the non-profit objectives of the lease, land is often leased below market value. The monitoring and management of the leased land, as well as taxes, can imply additional cost for the land steward. In some countries as France, tax exemptions exist on the tax on non-built property.

Opportunities

Conservation leases are flexible in time frame under the umbrella of each national law and can be adapted to each case without implying legal burdens to the landowner beyond the conditions voluntarily negotiated. Under climate change scenario the flexibility in time frame of conservation leases can be an advantage to adapt to new environmental conditions.

Opportunities for landowners 

  • Landowner keeps the property of the land and inheritance is not constrained.
  • Parties decide together on which are the conditions to exercise, enforce or restrict use rights of a property to protect or restore natural values.
  • The transfer of the management of the land can be of interest to the landowner when they are not interested in the use and management of the land or if they are interested in increasing biodiversity value through a specialized management done by the leaseholder.
  • The conservation leases are flexible in their description and duration (subject to national law) and, if required, it can be ended if the landowner experiences change in interest (i.e., succession, cases of disagreement between the parties or changes in legislation). However, the early termination of the contract could imply economic or material compensation to the land steward. Concrete conditions of early termination are negotiated freely in the lease contract. It is recommended that parties renegotiate and search alternative ways to secure a prosperous dialogue and collaboration, being early termination a last option. 
  • Recommended to sign contracts for long time periods if national law permits it.
  • When the leased land is part of a larger estate, land stewards can act as a broker for financial support to implement nature conservation activities by capturing public funds or promoting products and services of the larger estate.
  • Conservation or restoration management practices can increase public recognition of the land (i.e., voluntary labels).
  • Land users can increase their estate by leasing land from nature conservation organisation, sometimes below market value, under certain management conditions.

Opportunities for conservation NGOs 

  • Represents an alternative to land acquisition when purchase is either impossible because of high costs or if the landowner is not interested to sell his/her property.
  • The long-term lease may be of interest for land conservation or restoration, because actions undertaken go beyond what the civil regulations provide. According to the pact, it may include good management of the territory, such as good agricultural practices, soil conservation and minimum tillage, reforestation or landscaping, among many others.
  • In countries that allow long-term leases, e.g., in the UK where leases routinely last for 99 years, they provide a useful tool for the conservation of private properties.
  • Mechanism for conservation organisations to delegate the management of a property in their ownership to private land users (farmers, ranchers etc.) on the condition of certain management obligations.
  • Can be combined with other environmental aid (Natura 2000).
  • Possibility to break the lease and dismiss the lease holder in case of non-compliance with environmental clauses.

Barriers

Barriers for landowners and NGOs

  • There does not yet exist a structural economic support to conservation leases.
  • Each EU country has its own legal approach and hence a comprehensive EU wide approach is lacking.
  • Parties often lack the legal knowledge to set up a concrete plan on the commitments of both parties and the procedure in case of an early agreement termination.
  • Need to build up trust with the involved parties, which can be time consuming.
  • Legal obstacles can impede the inclusion of management restrictions in the lease contract (case of France).
  • Possibility of notary fees

Barriers for landowners

  • Lack of examples and references in the surrounding properties.
  • Lack of experiences and hence knowledge on land stewardship tools and contracts. Landowners might need legal or technical advice.

Barriers for conservation NGOs

  • For conservation projects, the drawback of leases is that it is a contract that is not perpetual but of limited duration, while most conservation projects are aimed at permanently improving the area in question.
  • Conservation leases can be costly and not every stewardship organisation will have the capacity for it even if a free cession is involved as the lease can involve management or tax cost for the land steward.
  • Conservation leases can be terminated at any moment if specified in the contract