Buying property within a Mine Subsidence District

Under the Coal Mine Subsidence Compensation Act 2017 and Mine Subsidence Compensation Act 1961 (repealed), structures in Mine Subsidence Districts must be constructed following Subsidence Advisory's development requirements to be eligible for compensation should mine subsidence damage occur.

Section 15B certificates confirmed that a property in a Mine Subsidence District had been constructed in accordance with Subsidence Advisory's development requirements and was eligible for compensation should the property be impacted by subsidence damage.

Section 15C certificates identified if a claim for mine subsidence damage to a property had previously been paid or was pending. If a compensation claim for the damage has already been paid, no further claims can be paid for the same damage irrespective of whether repairs were completed.

The review found that the checks being undertaken to confirm a property’s compliance before issuing a certificate were inadequate. For Subsidence Advisory to undertake inspections of every property where a certificate is requested, the cost per certificate would increase from $50 to approximately $1000. This cost increase was not justified given the low volume of claims for subsidence damage compared to the number of requests for certificates received.

Yes. If a s15B certificate has previously been issued for a property, any structures present on the property at the date the certificate was issued are eligible for compensation under the Coal Mine Subsidence Compensation Act 2017.

Improvements constructed since the issue of the last certificate must have been built in accordance with Subsidence Advisory’s requirements to be eligible for compensation.

Discretional coverage for unwitting purchasers

Under the new Coal Mine Subsidence Compensation Act 2017, Subsidence Advisory has discretion to determine to pay a claim for subsidence damage to a contravening development in circumstances where the failure to obtain the relevant approvals was not the fault of the property owner or where exceptional circumstances exist.

If a property owner can demonstrate they exercised due diligence (for example, sought proof of approval from vendor or council at the time of purchase but either due to an error, omission or malfeasance) were not alerted that the structure was a contravening development, Subsidence Advisory may determine to consider the claim.

Please refer to the Policy to support determinations under section 23(2) (PDF 138.37KB) of the Coal Mine Subsidence Compensation Act 2017 for further detail.

Option to take out title insurance with coverage for unapproved structures in mine subsidence districts

Property owners may wish to explore the option to purchase title insurance, which may include coverage for structures built without Subsidence Advisory’s approval in mine subsidence districts. Title insurance does not provide coverage for mine subsidence damage to a structure, however, some policies may provide cover for structures built without the relevant approvals in Mine Subsidence Districts.

Property owners should refer to the title insurers relevant policy statements for further information.

Prospective purchasers who wish to confirm if a property has the relevant development approvals and is eligible for compensation for mine subsidence damage may be able to do so by obtaining documentation from the vendor or council during the conveyancing process.

Development approvals under the Coal Mine Subsidence Compensation Act 2017 and former Mine Subsidence Compensation Act 1961 are closely aligned with development approval processes involving local councils under the Environmental Planning and Assessment Act 1979. Before granting development approval for properties in Mine Subsidence Districts, approval from Subsidence Advisory is required.

Under Section 23(a) the Coal Mine Subsidence Compensation Act 2017, buyers have the right to withdraw from a contract of sale for a structure that does not comply with Subsidence Advisory’s development requirements.

It’s important to note that Subsidence Advisory’s records indicate the non-compliance rate for properties within Mine Subsidence Districts is extremely low. There are approximately 140,000 properties in districts. In the last 10 years, records show only 4 claims for homes have been refused due to non-compliant structures.

Those prospective purchasers who still wish to ascertain whether a structure is eligible for compensation can do so by obtaining confirmation of development approval through the vendor or council. Prospective purchasers may explore the option to purchase title insurance as an alternative to obtaining additional development approval reports.

Note: Title insurance does not provide coverage for mine subsidence damage to a structure.  However, some policies may provide cover for structures built without the relevant approvals in Mine Subsidence Districts. Property owners should refer to the title insurer’s relevant policy statements for further information.

Prospective purchasers may be able to find out if there have been any previous or pending claims for subsidence damage at a property through the Requisitions on Title process or through information disclosed by the vendor under a claim settlement deed.

Requisitions on Title process

During property sale negotiations, the buyer’s conveyancer may ask the vendor questions to confirm there are no current claims on the property under the Coal Mine Subsidence Compensation Act 2017 through the Requisitions on Title process. The buyer’s conveyancers may also ask the vendor to provide documentation confirming development approval at this point.

Information disclosed by the vendor as required under a deed

Subsidence Advisory recently introduced a monetary compensation model with claims settled through cash payments based on assessments of the cost to rectify the damage.

To settle claims, property owners are generally required to sign a deed of release or deed poll. The deed requires property owners who elect to sell a property without rectifying the damage to disclose to purchasers that the damage has been the subject of a claim and has not been rectified. This includes a requirement to have the purchaser sign a deed poll acknowledging that no further claims for the damage can be made.

Yes. Conveyancers are no longer able to request Section 15 certificates from Subsidence Advisory as part of the conveyancing process for a property in a Mine Subsidence District.

Persons looking to purchase a property in a Mine Subsidence District can work with their conveyancer to determine their preferred approach in the absence of certificate. This may include:

• Proceed with the purchase without documentation confirming development approval
• Obtaining documentation confirming development approval from the vendor
• Obtaining a survey report and documentation confirming development approval from council
• Purchase title insurance that includes coverage for structures built without Subsidence Advisory's approval in mine subsidence districts.

Note: Title insurance does not provide coverage for mine subsidence damage to a structure, however, some policies may provide cover for structures built without the relevant approvals in Mine Subsidence Districts.

Subsidence Advisory previously communicated with financial institutions to ensure they were aware Section 15 certificates would not be issued from 30 September 2019.

If a financial institution is requesting a certificate, please contact Subsidence Advisory on (02) 4908 4300 for advice.

No. Subsidence Advisory will continue to honour previously issued certificates. If you have previously had a Section 15B certificate issued for your property, all structures on your property at the date the certificate was issued are eligible for compensation should subsidence damage occur. Improvements constructed since the issue of the last certificate must have been built in accordance with Subsidence Advisory’s requirements to be eligible for compensation.

It’s important to note that just because a certificate has not previously been issued for a property does not mean it is not eligible for compensation. Compliance with Subsidence Advisory’s development requirements, not a certificate of compliance, is a prerequisite for compensation for subsidence damage.

There are many reasons why a certificate may not have been issued for a property in a district, including but not limited to:

• the previous owner did not request a certificate at the time of purchase
• the property has not been sold recently
• the property has only recently been declared within a mine subsidence district
• the property is the result of a subdivision and certificates were issued under prior property details.