Although a rural lifestyle is an attractive option for many prospective purchasers, it is important to know that a prudent purchaser should complete additional due diligence on the property prior to committing to purchasing it. Rural land is classified as any lot that exceeds 2.5 hectares or 6.2 acres, whether or not the land has previously been used for agricultural purposes.
While there are a large number of additional enquiries that a purchaser can undertake in NSW, particularly in relation to rural property, we hope to provide a brief outline of some of the more common below:
The Noxious Weeds Act 1993 (NSW) makes the occupier of land responsible for the control of specified weeds such as blackberry, serrated tussock and Bathurst burr which can all spread and cause problems for neighbouring land holders. Purchasers should inspect the land for weeds and make enquiries with the Vendor or Local Land Services about any weed problems. The local council may issue a notice to a property owner requiring them to carry out weed control works at the expense of the owner, so a purchaser will want to ensure that such a notice has not issued as it will also be binding on them in the future.
Water Access Licences
The Property may also have a water access licence (WAL) associated with it for the use of dams or bores. A WAL must be transferred to a Purchaser separately from the title to the Property. A solicitor or conveyancer will be able to search the register to identify whether any WAL need to be transferred with the property.
Share Farmed or Leased Properties and Agistment
Many share farming/lease agreements are oral and deemed to be a periodic tenancy from year to year. Land may also be leased out to farmers under agistment agreements that permit stock, cattle or horses to graze. Agricultural tenancies can be a complex area for rural land purchasers and may prevent the property from being sold with vacant possession. We recommend that specific enquiries are made with the Vendor to determine whether there is a sharefarmer or lessee using the land.
Mineral and Mining Exploration
Rural land may be subject to mining and mineral exploration titles or application under the Mining Act 1993 (NSW) or the Petroleum (Onshore) Act 1991 (NSW). Purchasers or their solicitors can apply to the Mine Subsidence Board for a certificate to confirm whether the land is within the Mine Subsidence District.
Rural land that has been used for production purposes can often be impacted by chemical residues in animal and plant products. The residues of major concern to land purchasers can persist in soil for long periods and impact on the marketability of the property. We recommend that prospective purchasers inspect the Property for evidence of potential sites of residual contamination, such as pesticide storage sheds, diesel and fuel storage areas, dip sites or rubbish dumps etc. The Local Land Services can advise whether the Property is impacted by any current orders, notices or undertakings under the Act. They will generally release this information to purchasers with consent from the vendor.
Livestock and Plant Diseases
Some livestock diseases can persist on contaminated land even after the stock has been removed from the property, as can some soil-borne pests. Native vegetation may also prove to be an issue for prospective purchasers, as it may not be capable of being cleared without development approval. Rural land purchasers who intend on operating a horticultural enterprise or keeping stock on the land should make enquiries in this respect with the Vendor or Local Land Services.
Access to the Property
Although a Contract may show that there is a road providing access to the Property, in practicality this road may no longer be accessible. The previous owners may have put arrangements in place with neighbours to ensure access, or the property may only be accessible by a ‘crown road’, being a road owned by the NSW Government. The current owner may be paying rent for the use of the crown road. For these reasons, it is important to identify how access to the Property is obtained and whether you are protected in this respect.
Land Use Planning
There are many features of agricultural land which may not be governed by legislation but can significantly affect the land’s suitability – such as the climate, soils, water availability and natural vegetation. If a purchaser intends to work the land or use it for a specific period, we recommend enquiries are made with the local council prior to exchange to determine the suitability of the land for that particular purpose. A purchaser should also ensure that they have the opportunity to thoroughly inspect the property prior to exchange so that they can be assured that the land will accommodate their crops or livestock.
Local Land Services Rates
In addition to standard general rates charged by local council (and water usage charges should the property be connected to reticulated council water), a property may also be charged local land services rates whether it is over 10 hectares. Local Land Service Rates are used to provide services to landowners.
On-Site Sewerage Management Systems
A rural property may not be connected to a council sewer main, meaning that it must have an alternative form of waste disposal. An on-site sewerage management system (OSSMS) will have particular compliance and operational standards depending on the local council’s guidelines. Your solicitor or conveyancer will be able to provide further information in this respect.
As the vendor is not necessarily required to disclose the above information in the Contract for Sale, we strongly recommend that prospective purchasers of rural properties take the time to investigate them with the assistance of their solicitor to ensure that the property will be suitable for their needs.