When buying or selling a rural property in the Port Macquarie-Hastings region, the septic system is one of the most important, and most frequently mishandled, aspects of conveyancing due diligence. Understanding what the Section 10.7 certificate reveals about the on-site sewage management system, and what obligations flow from it, can prevent very expensive surprises after settlement.
Quick answer (BLUF)
A Section 10.7(2) planning certificate from PMHC confirms whether the property is registered on the OSSM system register, but it does not confirm the system is functional or compliant with current standards. A separate PMHC records search, plus a physical septic inspection, is needed for genuine due diligence. Non-compliant or unregistered OSSM systems can be a significant liability that should be disclosed and priced before exchange.
What is a Section 10.7 certificate?
A Section 10.7 certificate (previously known as a Section 149 certificate) is issued by PMHC under the Environmental Planning and Assessment Act 1979. It is a mandatory part of the vendor’s contract for sale and must be provided to purchasers before exchange.
The certificate reveals planning information about the property including:
- Zoning and LEP overlays (flood, bushfire, heritage)
- Development conditions
- Council orders or notices
- Rates status
- OSSM registration status (for unsewered properties)
The Section 10.7(2) certificate (the standard version) confirms whether the property is registered in PMHC’s OSSM register. The Section 10.7(5) certificate (an extended version, optional) provides more detail about specific conditions and orders.
What the certificate does and doesn’t tell you
It tells you:
- Whether an OSSM system has been registered with PMHC
- Whether any Council orders or notices are current against the property (including OSSM compliance orders)
It does not tell you:
- Whether the system is actually functioning
- Whether the system meets current standards (it may have been registered under superseded standards)
- The age or condition of the tank and absorption area
- Whether the system has been maintained
- Whether the system is sized appropriately for current use
For a purchaser, the Section 10.7 certificate is a starting point, not an endpoint.
Additional PMHC records search
A more informative approach is to request a separate OSSM records search from PMHC’s Development and Environment team (or through your solicitor). This typically reveals:
- The approved system type and capacity (from the original OSSM application)
- Any conditions on the operating approval
- Whether service records for AWTS units have been received (PMHC keeps these)
- Any compliance history, inspections, notices, orders
Physical septic inspection: why it matters
Neither the Section 10.7 certificate nor the PMHC records search tells you the physical condition of the system. This requires a professional inspection by a licensed contractor.
A pre-purchase septic inspection should cover:
- Tank condition (structural integrity, baffle condition)
- Sludge and scum levels (pump-out status)
- Outlet pipe and distribution condition
- Absorption area condition (any signs of surfacing or failure)
- AWTS component condition if applicable
- Written inspection report
This report becomes the basis for negotiation, a system in poor condition or requiring significant upgrade is a legitimate ground for price adjustment or a specific contract condition.
Vendor’s disclosure obligations
NSW law requires vendors to disclose material facts that would affect a purchaser’s decision to buy. A non-functional or non-compliant septic system is a material fact. Failure to disclose can expose vendors to post-settlement claims under the Conveyancing Act 1919 and potentially misrepresentation claims.
Vendors should:
- Ensure the OSSM registration is current and documented in the contract
- Include copies of the PMHC OSSM approval and service records in the contract of sale
- Disclose any known problems with the system (prior overflows, maintenance history, known failures)
- Not represent an unapproved system as an approved one
Common issues in Hastings region property sales
Unregistered systems: Older rural properties, particularly those built before the OSSM registration system was established, may have operating systems that have never been registered with PMHC.
Expired AWTS service contracts: AWTS service records that show gaps or expired contracts are flagged in a records search. PMHC can require the vendor to bring the service contract current before settlement.
Systems sized for previous use: A property converted from residential to holiday rental may have a system that was appropriate at the time of approval but is now undersized.
Systems requiring upgrade: PMHC compliance orders requiring system upgrade that aren’t resolved at settlement create ongoing liability for the purchaser. This must be fully disclosed and either resolved by the vendor or specifically dealt with in the contract.
FAQs
Should the vendor or purchaser pay for a septic inspection?
This is negotiated. Increasingly, vendors commission a pre-sale septic inspection to provide full disclosure and avoid objections, the cost ($250 to $500) is trivial relative to the value of transparency. Purchasers who are buying rural properties may also commission their own independent inspection.
What happens if a non-compliant septic is discovered after settlement?
The purchaser inherits the compliance obligation. PMHC treats the current owner as the responsible party regardless of when the non-compliance originated. If the non-compliance was deliberately concealed by the vendor, the purchaser may have a claim, but litigation is expensive and slow. Prevention through proper due diligence before exchange is far preferable.
Do I need to disclose a septic issue if I’ve just had the system pumped and it’s “working”?
If you’re aware of underlying issues, known failures, previous overflows, absorption area problems, these are material facts that should be disclosed even if the system appears to be functioning after a pump-out.
Can settlement be delayed due to a septic system problem?
Yes. If a pre-purchase inspection reveals a material defect that wasn’t disclosed, the purchaser may seek to delay settlement while the issue is investigated and either rectified by the vendor or priced into an amended contract.