Section 10.7 Certificates and Contract Clauses: What They’re Really Telling You
Your contract of sale comes with a planning certificate and a handful of clauses that can sound alarming on first read. Here’s what the ones we see most often actually mean.
Every NSW contract of sale comes with a Section 10.7 planning certificate attached, and most contracts carry at least one special condition that isn’t part of the standard printed form. Clients often read these and assume the worst. In reality, most of what turns up is either a standard disclosure that applies to thousands of properties, or a clause that simply explains what happens next rather than a reason to worry. Here’s what the ones we’re asked about most often actually mean.
At a glance
- A Section 10.7 certificate discloses planning controls and risks attached to the land, such as mine subsidence or bushfire-prone status. These are standard disclosures, not red flags on their own.
- Special condition clauses, like “subject to existing tenancy” or a probate clause, mostly change what happens after you sign rather than whether you should sign.
- If you’re buying a unit or townhouse, a strata report isn’t compulsory, but it’s the one report we’d never suggest you skip.
What is a Section 10.7 planning certificate, and why is it in my contract?
A Section 10.7 planning certificate (issued under the Environmental Planning and Assessment Act 1979) is a certificate from the local council attached to every NSW contract of sale. It sets out the zoning of the land and any planning controls, restrictions or known risks that affect it: things like heritage listings, flood control, foreshore building lines, road widening proposals, and the two we’re asked about most, mine subsidence and bushfire-prone land. It exists so a buyer isn’t relying on the seller’s word for what can and can’t be done with a property, or what conditions apply to it.
My certificate says the property is in a mine subsidence district. Should I be worried?
Not on its own. Large parts of the Hunter Region sit within a mine subsidence district, meaning the land could theoretically be affected by ground movement from historical or current underground mining. Because this is a known and managed risk in our area, there’s a statutory compensation scheme in place under the Coal Mine Subsidence Compensation Act 2017. If subsidence damage does occur, owners can apply for financial compensation to repair it through the Mine Subsidence Board.
The main practical impact is on future building work. Any renovation, extension or new structure will need approval from the Mine Subsidence Board before council will sign off on it, which can add a step and some time to a future building project. It doesn’t affect your ability to buy, live in, or insure the property as it stands today.
In plain English
A mine subsidence district isn’t a warning that something is wrong with the land today. It’s a standing note that the ground has a history of underground mining nearby, so there’s a dedicated compensation scheme and an extra approval step if you ever build on it.
It also says the land is bushfire-prone. What does that actually change?
Bushfire-prone land mapping is common right across Lake Macquarie and the wider Hunter Region, particularly anywhere near bushland reserves. The certificate flags this because it affects future building and renovation work: council will require bushfire construction standards to be met, which can mean things like fire-resistant materials, sealed gaps, and maintained clearance zones around structures.
The one thing we do flag to every client buying bushfire-prone land is insurance. Premiums for home and contents cover can run higher in these areas, and availability can vary between insurers, so we’d suggest getting a quote before you exchange contracts rather than after, while you can still factor it into your decision.
“Most of what’s on a planning certificate is a standard disclosure about the land, not a reason to walk away from the property.”
What does “subject to existing tenancy” mean in my contract?
It means the property is currently rented, and the tenant’s lease continues after settlement rather than ending because ownership changes. In practice, that means the tenant can stay in the property until their fixed-term lease ends, their existing lease terms carry over to you as the new landlord, and you’ll receive any rent due for the remainder of the tenant’s term. You can’t move in yourself or ask the tenant to leave early just because you now own the property.
Once the lease does expire, the choice is yours: renew with the existing tenant, give the required notice for them to vacate, or make new arrangements. If you’re planning to move in on settlement day, this is the clause to check for before you commit to a purchase, not after.
I’ve seen a probate clause in a contract. What is that?
A probate clause turns up when the seller is an estate, meaning the previous owner has passed away and the property is being sold under the terms of their Will. Before the sale can be finalised, two things need to happen: the Will needs to be granted probate (the court’s formal confirmation that it’s valid), and the executor or beneficiary named in the Will needs to be recorded on the property title.
The clause sets a timeframe, commonly six months from the date you sign, for both of those steps to be completed. If they can’t be finished in that time, either party can end the contract and the buyer’s deposit is refunded. It’s a protective mechanism for both sides rather than a sign that anything is wrong with the sale.
We read every certificate and special condition on your contract before you exchange, and translate anything unusual into plain English before it lands in your inbox.
Should I get a strata report if I’m buying a unit or apartment?
Yes, we’d suggest it every time. A strata report is essentially a health check on the whole building, not just your unit. It shows how much money sits in the building’s sinking fund, whether other owners are up to date on their strata fees, any large expenses coming up like painting or roof repairs, past defects or disputes, the body corporate’s by-laws around things like pets, parking and noise, and the building’s insurance position and claims history.
Buying into a strata scheme means buying into the whole building’s financial position, not just the four walls of your unit. A strata report is the way to see that before you’re committed, rather than finding out about a looming special levy after you’ve exchanged.
The short version
A planning certificate and a contract’s special conditions exist to inform you, not to scare you off. Mine subsidence and bushfire-prone status are common, well-understood risks across our area with established processes attached to them. Clauses about tenancies or probate simply describe what happens after settlement in a specific situation. The one document worth actively chasing down yourself, if you’re buying a strata property, is the strata report. If anything on your contract or certificate reads unclearly, that’s exactly what we’re here to walk you through before you sign.
Got a certificate or clause you’d like explained?
Send it through and we’ll walk you through exactly what it means for your purchase.
