Why Get A Land Information Memorandum (LIM) Report Before Purchasing A Property?


fiona taylor lawyerA LIM report from the local Council will disclose information to you about a property which is not immediately apparent through viewing the property and obtaining a builder’s report.

For example, some of the information contained in a LIM may affect what you can and can’t do to the property, change the feeling of the wider area the property is located in or cause problems in obtaining insurance. There may be work that has been carried out that has not been approved, and the Council may force you (as the new owner) to rectify those works.

LIM reports normally include:

• What building consents have been issued for any buildings on, or alterations to, the property and whether final sign-off or Code Compliance Certificate has issued. It is important that you pay particular attention to this as the lack of a building consent or Code Compliance Certificate could cause problems in the future.
• The zoning for the property.
• If the property is subject to any resource consents.
• Building and resource management compliance issues, land use consents or subdivision consents.
• Information about protected trees and buildings.
• Land features such as flooding, overland flow paths and storm water.
• Environmental protection issues.
• Soil contamination.
• Land stability information.
• Site plan of dwelling (this is not normally included in Auckland Council LIM reports).
• Location of drains and any additional information on drainage.
• Any outstanding council requisitions (notices to fix) or requirements on the property which have not been complied with.
• Rates information.
• Any proposed public works in the area.

All of these things affect what you are able to do with the property once purchased, and therefore impact on the value of the property.

Where to do you get a LIM?
You can obtain a LIM (Land Information Memorandum) report from the Council in respect of any property. A Council is under a legal obligation to provide a report to you within ten working days of you applying for it, however many Councils have a facility for urgent LIM report availability. The costs vary with each Council.

Reviewing the LIM
It is recommended that you have a property law expert review your LIM, as they know the pitfalls and keywords to watch out for, and can explain what each part means and highlight any issues.

If you are purchasing at Auction, you should have the LIM reviewed as part of your property due diligence prior to Auction day.

Making your offer conditional on a satisfactory LIM
If you are not purchasing at Auction, you should ensure your offer is conditional on a satisfactory LIM report. This is usually achieved by ticking the “LIM” box on the front page of the Agreement for Sale & Purchase Agreement. As LIM usually take 10 working days to come from Council, ensure that the condition date allows you enough time to request the LIM, receive it from the Council and have your property lawyer review it.

Pre Auction Due Diligence Costs
Smith and Partners offers a fixed price Residential Property Auction Due Diligence package which includes:

• Search, review and explain the title
• Search, review and explain any interests that affect the title, such as easements and covenants
• Search, review and explain the LIM report (Council fee for LIM report not included in $350)
• Review and explain the terms and conditions of auction
• Advise on any other due diligence matters such as building reports or valuations

The cost of this is $350* + GST, Disbursements & Office Expenses. If you are successful at auction, this fee will be deducted from your overall conveyancing fees.

*Unit Title Properties may incurr additional costs to complete a full review of body corporate documents etc.

Cost of reviewing a LIM for a conditional offer
The cost of reviewing a LIM for a conditional offer on a property is usually included in the cost of your conveyancing.

Do you want peace of mind about a property you are considering buying? Contact New Zealand property law expert, Fiona Taylor to discuss a Pre Auction Due Diligence Check or to get started with a conditional offer on a property.

Fiona Taylor
Email: Fiona.taylor@smithpartners.co.nz
Phone: 09 837 6845
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