[Murray Crane]

Samamtha,
Below is the NSW Water Management Act 2000 which Council’s in NSW work under with regard to water, as you can see it works alongside the Local Government Act 1993 in particular s713 of Division 5 – Sale of land for unpaid rates and charges.
You can’t sell properties outside your LGA.

NSW Water Management Act 2000
s359 Sale of land for unpaid rates and charges
(1) This section applies to rates and charges imposed under this Act by the Minister or by a water supply authority, private water corporation or private water trust.
(2) The provisions of Division 5 of Part 2 of Chapter 17 of the Local Government Act 1993 apply to land in respect of which a rate or charge (being a rate or charge that is, by virtue of this Part, a charge on land) remains unpaid in the same way as they apply to land in respect of which rates and charges under that Act remain unpaid.
(3) For the purpose of applying the provisions of Division 5 of Part 2 of Chapter 17 of the Local Government Act 1993 to land in respect of which a rate or charge remains unpaid—
(a) a reference in those provisions to a council is to be read as a reference to the Minister or to a water supply authority, private water corporation or private water trust, as the case requires, and
(b) a reference to a general manager or public officer is to be read as a reference to the Secretary or to the principal officer of a water supply authority, private water corporation or private water trust, as the case requires, and
(c) a reference to a member of staff of a council is to be read as a reference to a member of staff of the Department or to an employee of a water supply authority, private water corporation or private water trust, as the case requires, and
(d) a reference to a rating authority is to be read as including a reference to a council.