Mine Subsidence and the Discontinuation of Compliance Certificates

August 15, 2019

 

 

Newcastle and the Hunter Valley area has a long and rich mining history. Over time, inactive mines have been filled in, and developed into urban housing areas. These areas are designated ‘mine subsidence districts’. A property in a proclaimed mine subsidence area could be, at some stage, affected by mine subsidence.

  

What is Mine Subsidence?

 

Mine subsidence occurs due to underground mining, which causes the ground above to shift and sink.  Mine subsidence from inactive underground mining occurs when part of the old mine workings collapse.

If your property is damaged by mine subsidence and it is compliant with the requirements under the (new), Coal Mine Subsidence Compensation Act [2017] (replacing the previous Mine Subsidence Compensation Act [1961] from 1 January 2018)  you are protected under the Act and can claim compensation from Subsidence Advisory NSW (previously known as the Mine Subsidence Board). 

It is compulsory under the Conveyancing Act that a section 10.7 Planning Certificate from Council is included in a standard Contract for Sale of Land. This document informs a potential purchaser about the particular piece of land they are looking to purchase, including information about zoning, development, whether it is subject to flooding, bushfires, contamination, etc. It also reveals whether the property is located within a mine subsidence area.

 

Current protocol. To date, when acting for a purchaser, if a property is situated in a proclaimed mine subsidence district, it has been necessary to obtain a section 15B Mine Subsidence certificate. The purpose of this certificate is to confirm that the property is fully compliant with requirements under the Mine Subsidence Compensation Act (not to be mistaken with the new, Coal Mine Subsidence Compensation Act) and that the property owner would be eligible for compensation in the event of a mine subsidence incident.

 

Due to reforms to the Subsidence Advisory NSW Board, section 15B Certificates have not been carried over to the Coal Mine Subsidence Compensation Act and Subsidence Advisory NSW will no longer be issuing these Certificates from 30 September 2019.

 

Why? A recent review found that these certificates provide no real value to the community, due to the fact that no physical inspection has been taking place prior to the issuing of a certificate. To continue issuing certificates, practical inspections should take place prior, however the costs associated with compliance checking could not be justified. This is because a very low number of houses are affected by subsidence, and a minute proportion of claims are ever found to be non-compliant.

 

The statistics are such that of 140,000 houses in mine subsidence areas, only 150 are damaged by mine subsidence each year. From that, just four claims in the previous ten years have been refused due to non-complying structures.

 

Going forward. The Coal Mine Subsidence Compensation Act 2017 allows for Subsidence Advisory NSW to use discretion in paying out a claim for subsidence damage to a non-complying structure when it can be proved that a property owner has exercised their due diligence at the time of purchase, but has been misinformed, at no fault of their own.

 

As always, a purchaser (with the assistance of their solicitor or conveyancer) should always exercise their due diligence when buying a property. After September 30, the Purchaser of a property in a mine subsidence affected area should seek confirmation that the property has been developed in accordance with the relevant development approvals and is therefore compliant with the Coal Mine Subsidence Compensation Act requirements.

 

As a starting point, a purchaser should always take steps to ensure that they review Council’s files and that DAs exist for all structures.

 

For more information, please visit https://www.subsidenceadvisory.nsw.gov.au/buying-property.

 

If you are purchasing your home, or an investment property and would like some more information, please call us. Our friendly and experienced Property team are available to guide you through the conveyancing process and advise you with the most up to date information, to assist in making the best possible decisions in relation to your most valuable asset.

 

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