Mine subsidence is the movement of the ground which can occur in areas where underground coal mining has occurred. The land above the mine can sink and fill hollow mine workings, causing tilts and strains on the ground surface. This can cause damage to property, such as cracking, and can also increase the risk of landslides. Australia has a significant history of underground coal mining in many regions such as the Hunter Valley, so it is important to check if your purchase is subject to a mine subsidence risk. Mine subsidence can impact future developments you may want to undertake on the property.
What are the risks of purchasing/building in a mine subsidence district?
The NSW Government has divided the state into districts with differing mine subsidence risks. The NSW Planning Portal can be used to find out if a property is within a Mine Subsidence District and the potential impacts of being located within that district. If your potential purchase is located within a mine subsidence district conditions on size, height, location, and materials can be placed on future developments by the Subsidence Advisory NSW (SANSW) depending upon the property’s individual classification. If you are planning to build or subdivide within a mine subsidence district you must obtain approval from SANSW.
How can I mitigate the risks?
To mitigate the risk of building or purchasing in these areas the NSW Government has established a fund which operates like insurance mechanism. The purpose of the fund is to reduce risk associated with building in a mine subsidence zone. The fund is able to pay for any damage caused by mine subsidence. Properties constructed within SANSW guidelines will automatically be covered by the fund. When purchasing you should check to ensure that the property has been constructed within the guidelines and is therefore covered by the fund.
Prior to the 1 October 2019, properties were issued certificates which assessed their compliance with the SANSW regulations. If you are purchasing a property which was built or developed pre 2017 then you will need to complete a search to ascertain whether approval was sought. To check whether a property is covered by the fund you can search on the subsidence advisory website to see whether SANSW issued a section 15B certificate for the property. All structures on the property at the date of issue of the certificate are eligible for compensation in the event of damage caused by mine subsidence. However, any subsequent construction will only be eligible for compensation if it was built in accordance with the SANSW requirements. Therefore, it is important to consider the age of structures on the property before purchasing.
Properties developed/built post 2019 are automatically considered covered by the scheme as long as they were built in accordance with the SANSW guidelines. Prospective purchasers who wish to confirm that approval was gained can do so by obtaining documentation from the vendor or council during the conveyancing process.
What about future development?
If a purchaser is considering future development, it is important that any limitations placed by SANSW on the property are considered and properly adhered to. Approval will also need to be sought by SANSW to ensure that the property continues to remain eligible for the compensation scheme.
What if I purchase a property which does not meet the guidelines?
SANSW has discretion to pay for a claim where there was failure to obtain relevant approvals at no fault of the property owner. For example, where a property owner can demonstrate that they sought proof of approval from the vendor or council at the time of purchase and there was an error or omission from the other party which caused the purchaser to believe that the property was constructed in accordance with SANSW guidelines.
Should I purchase a property in a mine subsidence district?
While there are some risks of buying in a mine subsidence zone, they are largely mitigated by the compensation fund and SANSW guidelines. In the last 10 years SANSW records show that only four claims have been refused due to the structure being non-compliant.
The team at Burgess Thomson are mine subsidence experts and can ensure that extensive due diligence is undertaken to guarantee that your purchase meets SANSW guidelines and is covered for mine subsidence.
Get in touch with our team to discuss your mine subsidence purchase.