Artist Noila Souza has crossed oceans to come to New Zealand, and she’s a dab... more
Property blog: why do you need a LIM?
01 May 2017
The term 'due diligence' often comes up when buying a property, and a LIM report from your local council is usually at the top of the list, according to Harcourts real estate company.
But what is it, and why do you need one? A LIM or Land Information Memorandum is a report issued by the local city or district council which provides a summary of all the information that local authority has on file about that property, in particular, all works on the property that council has had involvement in.
It will typically include:
- Zoning information
- Information on natural features which impact the use of the property (such as flooding or erosion, wind risk and subsidence)
- Scheduled roads or utility developments (such as drainage) which impact on the site
- Details of current rates, and an outstanding rates owed on the property
- Information on any protected or heritage buildings or trees on the property
- Details of resource consents, or building consents issued for work on the property.
It's important to remember that a LIM won’t contain ALL information on any given property. For example, it won’t contain recent survey measurements, or information on the building’s structural integrity, or address fears of contamination from substances such as methamphetamine.
You will need to explore those concerns with the help of building and meth contamination inspectors (note: the NZ Standards Authority is currently preparing a nationwide standard for meth contamination testing).
So why do you need a LIM report?
It can tell you if previous alterations or construction works have been signed off by the council. It may show areas liable to flood or which may be prone to subsidence or erosion. These are issues you may not notice just by looking at the property.
A LIM may also alert you to things such as planned road widenings or new routes which may affect the property.
Compare what's on the LIM and what you can see at the property. While not all works done on a property may require council involvement, and therefore not be on the LIM, if you notice any significant alternations that are not listed on the LIM, discuss this with your lawyer and the real estate sales consultant before making an offer.
It's a good idea for your lawyer to look over the LIM anyway as they may spot something you miss. You can request that the seller remedy any issues of concern as a condition of sale.
Councils will charge for supplying a LIM, typically between $200 and $400, depending on the urgency. This cost outlay may seem a waste, given that there’s no guarantee your bid or offer on a property will be accepted. In most cases you can cancel a LIM request, though it must be done in a timely manner and may carry a cancelation fee.
If you have a clear idea of what you want in a new home and the property ticks all those boxes, the cost of a LIM, given the information it provides, and the proportion of the overall property value it represents, is probably worth it. It represents peace of mind around one of the biggest purchases you will ever make. Compare it to the cost of finding something fundamentally wrong or non-compliant in the property at a later date; what it might cost to fix or insure, or the impact it may have on your resale value.
For more information on selling and buying, see the Harcourts website.
Published: 01 May 2017