Amendments to standard land promotion agreements and precedents aimed at balancing climate change and environmental issues against maximising financial returns for the landowner and promoter.
Why use this?
The drafting assists landowners to discuss environmental implications of a development with their promoter/ developer, satisfying their interest in responsible development and placing environmental issues front and centre in future land use. The promoter will be incentivised by a bonus linked to net zero obligations. The approach is consistent with UK targets on net zero and therefore less likely to be challenged.
How to use this clause
(A) The Owner wishes any future development of the Property to create a sustainable, resilient and net zero community.
(B) The parties wish to adopt a ‘Zero Carbon by Design’ approach to the promotion, development and construction on the Property.
(C) The parties aim the Development to be consistent with all applicable policy and targets for net zero.
Air Quality Index means the Daily Air Quality Index numbered 1-10 as published by DEFRA or replacement index issued by the UK government to measure air quality and pollution.
Allotment Land means land designated in the Development for use as an allotment garden and to be made available to individuals within the community.
Architectural Diversity means a range of architectural designs and styles for housing and commercial buildings that provides different designs and a fair range of Affordable Housing options.
BAU Development means a development that does not [comply with UK net zero policy] [achieve EPC A standard for at least 95% of the properties] [or similar benchmark].
Biodiversity Objectives means to develop a plan for the Development that will maintain, monitor and [improve][ensure no net loss of] the genetic, species and ecological diversity on the Property in accordance with [the Natural Capital Impact Group Biodiversity Impact Metric] [the Defra Biodiversity metric] [or a similar biodiversity framework].
Carbon Capture means the mechanical or natural removal of carbon dioxide from the atmosphere,
Carbon Insetting means a carbon reduction project, verified by a carbon offset standard, which occurs on the Property.
Carbon Offsetting means the purchase of a quantity of carbon credits from a project that has been verified in accordance with [insert name of voluntary standard] or from a United Nations Framework Convention on Climate Change clean development mechanism, in order to compensate for the emissions made by the Development.
Climate Positive Planning Permission means a Planning Permission and Planning Agreement (if any) free from any Owner’s Unacceptable Condition (unless any Owner’s Unacceptable Condition is waived by the Owner in accordance with this agreement).
Climate Professional means an environmental or net zero consultant that specialises in the creation, implementation and measurement of net zero targets that may from time to time be appointed in accordance with this Agreement in connection with the Development.
Community Land means that part or parts of the Property designated as being for the benefit of the community, and to be held in community ownership, following the completion of the Development including:
a) Allotment Land;
b) Conservation Land;
c) Community Energy Land; and
d) Open Spaces.
Community Energy Land means land designated in the Development for the creation of renewable energy as part of a Community Energy Programme.
Community Energy Programme means the production and sale of electricity generated from the Community Energy Land whether direct to the Residents or otherwise via a community energy company.
Community Objectives means all of the following:
a) become a Plastic Free Community from the start of the Development;
b) encourage healthy living;
c) encourage use of Co-Working Space at the Development;
d) designate areas of land for use as Community Land;
e) create structures and governance for the co-ownership and stewardship of Community Land;
f) model to achieve an Air Quality Index score of 3 or below at all times; and
g) maximise Architectural Diversity.
Conservation Covenant means a covenant to do or not do something on a defined area of land for a conservation purpose.
Conservation Land means land designated in the Development to be returned to its natural state in order to achieve the Biodiversity Objectives.
Co Working Space means a shared office space for independent workers.
Development means the buildings and wider development to be created on or at the Property pursuant to the Satisfactory Planning Permission.
District Heating Scheme means a new or existing system for the distribution of heat and hot water to buildings on the Development.
Embodied Carbon means the Greenhouse Gases that are emitted through the production and delivery of building materials for and used in the Development.
EV means a vehicle that uses one or more electric motors for propulsion and obtains all its power from an electric battery.
EV Parking Spaces means spaces specifically designated for charging EVs through charge points or directly from the grid.
EV Substation Capacity means a substation with sufficient capacity to be able support the requirements of the EV Parking Spaces.
Greenhouse Gases mean the natural and anthropogenic gases which trap thermal radiation in the earth’s atmosphere and are specified in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC).
Green Transport Objectives means all of the following:
a) include car sharing facilities and spaces at the Development;
b) minimise Private Car Ownership with a target of no more than  per 100 inhabitants in the Development;
c) maximise EV Parking Spaces and minimise non-EV car parking spaces on the Development;
d) maximise Pedestrian Zones;
e) maximise cycle storage facilities;
f) maximise cycle ways and footpaths;
g) maximise the use of public transport for commuting by the residents of the Development; and
h) use advanced data analytics to predict transport requirements creating new public transport hubs as required.
Hydrocarbons means principally oil, gas and coal or other fuel derived from an organic compound made up of hydrogen and carbon.
Natural Capital means the natural assets in and around the Property including the geology, soil, air, water and all living things that the residents and community use, which make their lives possible.
NGO means a non-governmental organisation that is established to protect wildlife, the environment or biodiversity and that has rights to object to the Development.
Net Zero means the sum of Greenhouse Gas emissions from all operations on the Property and Greenhouse Gas removals, accounted for by credits from Carbon Insetting or Carbon Offsetting projects, is zero.
Net Zero Adjusted Land Price means [NUMBER]% of the Minimum Land Price or Market Value whichever is higher.
Net Zero Bonus means an additional [NUMBER]% of the Net Sale Receipts (exclusive of VAT) payable for achievement of all the Net Zero Objectives.
Net Zero Objectives means all of the following:
a) maximise the proportion of Zero Carbon Housing;
b) use construction materials with the lowest Embodied Carbon reasonably available;
c) maximise self-generation of renewable energy on the Development;
d) minimise the use of heating and hot water technologies that use Hydrocarbon fuels or produce Greenhouse Gases;
e) establish a Community Energy Programme to supply renewable energy to the Development;
f) maximise Carbon Capture at the Development;
g) minimise the use of energy by the Development using ‘smart grid’, demand side energy management and other technologies;
h) prioritise the use of electricity from renewable energy sources over all other types of fuel on the Development;
i) maximise the EV Substation Capacity; and
j) connect into existing District Heating Schemes where possible.
Net Zero Overage means the overage provisions set out in Schedule 1.
Objectives means the Net Zero Objectives, the Green Transport Objectives, the Community Objectives and the Planning Objectives.
Open Space means
a) public open space, public recreational social or communal use amenity land, landscaped areas, play areas, school sports grounds, playing fields; and
b) parkland and woodland (including (but not limited to) any areas of land required for tree belts, structural landscaping buffer zones and noise bunds).
Owner’s Unacceptable Climate Condition means a Condition which in the Owner’s reasonable opinion:
a) will or is likely to increase the Greenhouse Gas emissions during occupation of the Development;
b) will or is likely to reduce the UK’s transition to Net Zero;
c) will or is likely to cause irreversible damage to the environment; or
d) is otherwise inconsistent with the Net Zero Objectives.
Pedestrian Zone means areas of the Development reserved for pedestrian [and cyclist] only use and where motor vehicles are prohibited.
Planning Objectives means all of the following:
a) obtaining a Climate Positive Planning Permission; and
b) maximising so far as reasonably practicable the area within the Property which has the benefit of a Climate Positive Planning Permission.
Planning Permission means detailed planning permission for the Development granted by the Determining Authority.
Plastic Free Community has the meaning given to it by the charity Surfers Against Sewage as at the date of this agreement.
Private Car Ownership means a car, van or other vehicle owned or operated for private use.
Promoter’s Costs means [insert all the market standard costs from a traditional land promotion agreement and add] including the fees of the Climate Professionals.
UK’s Net Zero Target means the UK Government’s target under Section 1 of the Climate Change Act 2008, which as at the date of this agreement is 2050.
Zero Carbon Housing means [has the same meaning as Level 6 of the Code for Sustainable Homes] [or any successor or equivalent standard].
14. Development Objectives and Priorities
14.1 The Promoter shall use all reasonable endeavours to achieve all of the Objectives.
14.2 The Promoter shall prioritise the Objectives in the following order:
a) first, the Net Zero Objectives [and the Planning Objectives];
b) second, the Green Transport Objectives; and
c) third, the Community Objectives.
15. Not to promote BAU Developments
During the Promotion Period, the Promoter shall not promote through the planning process or be connected or associated in any way with a BAU Development.
16. Green Planning Strategy
In preparing and implementing the Planning Strategy, the Master Plan and the Disposal Strategy, the Promoter shall:
a) have regard to:
(i) the Objectives;
(ii) the priorities set out in clause 14.2;
(iii) the Embodied Carbon that will be used to build the Development;
(iv) the use of Natural Capital during the occupation of the Development in the future;
(v) the UK’s Net Zero Target; and
(vi) any policies or strategies that have been created in response to a declaration of a ‘climate change emergency’ by the local council covering the Development or the Determining Authority.
b) in collaboration with the Climate Professionals, create a Net Zero model to measure the Greenhouse Gas emissions from the Development and demonstrate how these are reduced to Net Zero.
17. NGO Interests
The Promoter shall engage with all relevant NGOs to encourage direct feedback from them to the extent reasonably required to achieve the Objectives or facilitate the Development, in order to reduce the number of objections at planning.
18. Net Zero Price Adjustment
18.1 If after [NUMBER] months of promotion the Promoter is unable to find a buyer and the reason has been notified and evidenced as the Net Zero Objectives being too onerous, the Owner will, acting in good faith, consider offers to buy the Development Land at the Net Zero Adjusted Land Price. [Drafting note: the drafting tries to set a higher disposal threshold to enable the higher price to be used to offset the environmental losses from not hitting the Net Zero Objectives]
18.2 On sale of the Development Land at the Net Zero Adjusted Land Price the parties agree that the cash difference between the Net Zero Adjusted Land Price and the Minimum Land Price and Market Value (the “Carbon Premium”) shall be used for any of the following purposes:
a) to progress Carbon Insetting or Carbon Offsetting relating to the Development;
b) to promote Carbon Capture in the UK by using the Carbon Premium to plant trees or preserve peat bogs; and/ or
c) to any similar or analogous activity that would offset or balance the resulting Development’s carbon footprint.
19. Net Zero Bonus
The Owner shall pay the Promoter the Net Zero Bonus immediately following completion of each Sale that meets the Net Zero Objectives in full.
20. Net Zero Overage
20.1 To ensure that the Objectives are met and delivered, the Owner shall ensure the Satisfactory Planning Permission is not amended by subsequent owners or developers in a way that would erode the Net Zero Objectives.
20.2 The Owner and the Promoter agree that they will not accept a financial offer for the Development Land if such offer excludes the Net Zero Overage.
20.3 The Owner shall not exchange contracts in relation to any Sale without incorporating the Net Zero Overage either as covenant in the Transfer or as a separate overage deed.
The transfer of the Development Land to a Buyer shall include:
a) a positive covenant to pay the Net Zero Overage [Drafting note: assumes deed of covenant wording included elsewhere]; and
b) a Conservation Covenant over the Conservation Land in favour of [NGO or Community Company].
22. Rights of third parties
Save for relevant NGOs and the potential beneficiaries of the Conservation Covenants, a person who is not a party to this agreement will not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement
Schedule 1 – Net Zero Overage
[Include ‘typical’ overage provisions and drafting.]
1.1 Additional Definitions:
New Owner means the new owner of the Development Land or any part of it from time to time.
Original Landowner means [Insert name of landowner from the promotion agreement].
Original Value means the consideration paid for the Development Land by the New Owner with the benefit of the Climate Positive Planning Permission.
NZ Overage Payment means an amount equivalent to [NUMBER %] of the Original Value.
New Planning Permission means an outline or detailed planning permission for the whole or part of the Development Land submitted by the New Owner, or on its behalf, which varies or replaces the Climate Positive Planning Permission such that the Development would:
a) not meet the Net Zero Objectives; or
b) have a higher carbon footprint than the development that would have been progressed as part of the Climate Positive Planning Permission.
Trigger Date means the date of submission to the Determining Authority of the New Planning Permission by the New Owner or its agent, developer, promoter or contractor. [Drafting note: deliberately brought forward to submission to discourage the action in the first place]
2. Net Zero Overage Payment
2.1 On each occasion that a Trigger Date occurs, a NZ Overage Payment shall immediately become due by the New Owner to the Original Landowner.
2.2 The New Owner covenants with the Original Landowner that it shall pay each NZ Overage Payment due under paragraph 2.1 to the Transferor within 10 working days of the Trigger Date.
3. Disposals and restriction
3.1 The New Owner covenants with the Original Landowner not to make any Disposal of the Development Land without the transferee executing a Deed of Covenant.
3.2 The New Owner shall procure that the following restriction is registered on the title to the Development Land:
“No disposition of the registered estate by the proprietor of the registered estate, or by the proprietor of any registered charge, is to be registered without a written consent signed by the [Original Landowner].”
[Drafting note: See Notes for users regarding Land Registry Guide 19].