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The Importance of Section 10.7 Certificates When Buying Property


a couple is congratulated by a real estate agent with a purchase of their new home


Section 10.7 planning certificates (formerly known as 149 Certificates) provide important and often crucial planning and environmental information about a property or land. Understanding these certificates is vital in avoiding potential pitfalls when buying a property. Let's dive into the difference between Section 10.7(2) and 10.7(5) certificates and discuss real-world implications of not thoroughly reviewing them.


Difference Between Section 10.7(2) and 10.7(5) Certificates


Section 10.7(2) certificates, or "Standard Planning Certificates", provide fundamental details about the land zoning, heritage listing, applicable State Environmental Planning Policies (SEPPs), and relevant Local Environmental Plans (LEPs).


Meanwhile, Section 10.7(5) certificates, or "Special Planning Certificates", go a step further by uncovering some hidden layers to the standard planning certificates. They provide all the information included in the 10.7(2) certificate plus additional council-held details such as proposed environmental plan changes, land contamination, council development plans, or other pertinent issues.


What Can Go Wrong?


The implications of not carefully perusing your Section 10.7 certificates can be far-reaching, leading to unforeseen issues and costly mistakes.


Let's consider a few examples:


1. Land Use Restrictions:


We have encountered this all too many times. Clients often come to us with a signed contract and ask us if they can use the property for a specific purpose - for example, a business purpose such as running a family day care or some other business. If only they had been more careful and perused the planning certificate prior to signing the contract to find the disclosure about permissible use of the property.


Let's consider another example related to land use restrictions. Imagine you've purchased a beautiful parcel of land with dreams of building a three-storey house with stunning views. But upon reviewing the Section 10.7 certificate after your purchase, you discover that zoning restrictions only permit single-story structures. This information, had it been known beforehand, could have significantly influenced your buying decision.



2. Land Contamination from Previous Use


Consider a scenario where you have bought a sizeable property planning to divide the land, build a set of townhouses, and sell them for a profit. After the purchase, you delve into the Section 10.7(5) certificate and find out that the property was formerly an industrial site and has been identified as potentially contaminated land.


Now, you're facing extensive and costly soil testing and potential remediation before you can even begin construction. Your project timeline is delayed, and your budget for the development is now woefully inadequate. If you had paid close attention to the certificate before buying, you might have avoided this property or factored in the additional costs and delays into your negotiation and planning.


3. Infrastructure Developments:


Let’s say you have purchased a picturesque property, attracted by its serene surroundings and a pleasant view of a nearby park. Your plan is to enjoy a peaceful life and views while your property value appreciates over time, given the location.


However, after the purchase, you decide to take a closer look at the Section 10.7(5) certificate. You are taken aback to find out that there are council plans to construct a multi-level apartment complex adjacent to the park within the next two years, which will block most of your view of the park.


This change in the landscape could drastically affect your quality of life due to increased noise, traffic, and loss of the park view. Additionally, the construction might decrease your property value, thwarting your investment plans. If you had thoroughly reviewed this certificate before the purchase, you might have reconsidered your decision or negotiated a lower price to account for these future changes.


4. Heritage Listings:


You might purchase a quaint older property with plans to modernise it extensively. You invest significant time and effort in finding just the right looking property in the perfect location. You rush to sign the contract as you are happy with everything about your new home, which will be perfect when renovated. However, a late review of the Section 10.7(2) certificate shows that the house is heritage listed, severely limiting what you can do to the style and facade of the building.


Each of the above examples highlights the crucial importance of thoroughly considering and reviewing a Section 10.7 certificate when purchasing a property. These documents carry essential information that can significantly impact your plans and affect the value of your investment.


Takeaway


Navigating property purchases in New South Wales involves careful review and perusal of various legal documents attached to the Contract, with Section 10.7 certificates being among the most important. By thoroughly reviewing these certificates with the help of a qualified conveyancer or solicitor, you can make an informed decision that aligns with your property goals and avoids potential pitfalls. When it comes to purchasing a property, knowledge is the key to a successful purchase.


Contact Surge Legal on 02 8722 5021 for a free consultation in relation to your purchase or sale of real property or any other conveyancing related issues.




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