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'Tis The Season For Buying And Selling Property - But Do I Really Need A Lim Report?

16 December 2013

With property sales on the rise again, people are gearing up to present their properties for sale in a highly competitive market.  Agreements for Sale and Purchase are coming in overnight and in some cases settlements are happening a few days later.  “Excellent” you might think, the quicker the better, and I can have Christmas dinner in my new home.  However, it pays to take all the necessary steps to ensure your settlement goes smoothly.  Carrying out a LIM report is an important part of the process, and provides you with knowledge of the property over and above what you see with an inspection.  The LIM also provides for a process to follow should it reveal any major issues detrimental to your sale or purchase going ahead.

 

What is a LIM report?

A Lim Report is a Land Information Memorandum prepared by local Councils containing information held by a Council on a property.

 

What information will be included in a LIM?

  • Building information including Permits and/Consents and building plans for any buildings on the land;
  • Details of any outstanding work;
  • Valuation detail and rates details including any outstanding rates;
  • Town Planning zones;
  • Restrictions on the use of the land or buildings;
  • Any special features on the land such as erosion, flooding, subsidence or the presence of any hazardous substances;
  • Storm water and sewage drains;
  • Resource consents issued for the property and for any neighbouring properties such as subdivision consents;
  • Swimming pool and/spa information;
  • Any classification of land or buildings such as a designation by the New Zealand Historic Places Trust;
  • Information notified to the Council by any network utility such as electricity supply authority or gas or petroleum corporations;
  • Any other information that the Council considers relevant to the property.

 

Timing is key

The Agreement for Sale and Purchase contains a standard LIM condition. The condition provides for a LIM Report to be applied for within 3 working days of the signing of the Agreement.  The Council must provide the LIM within 10 working days of receipt of the application.  The LIM condition then allows 15 working days to approve the LIM report.

If you wish to object to anything in the LIM you must notify the vendor and ask the vendor to complete any work that is required by Council on or before the 15 working days, because if you do nothing the LIM condition is deemed to have been approved.  The Vendor can choose whether or not to comply with the request.

Some of the more common matters that purchasers object to are:

  • the absence of consents or Code Compliance Certificates for buildings or work completed on the property;
  • log fires and swimming pool fencing that does not comply with the law.

If there is something in the LIM you don’t like, you don’t have the automatic right to end the agreement. The LIM condition sets out a process with strict time frames that must be followed. If you object to something in the LIM and the vendor cannot, or will not, remedy the matter, then you will be able to cancel the Agreement.

 

What does a LIM cost?

The cost varies between the Councils and can be between $200.00 and $400.00.  Many Councils have an urgent service for an additional cost.

 

Is a LIM Report necessary?

In many cases the LIM Report will not contain anything out of the ordinary, but it is a useful report of the property and provides a valuable peace of mind for a purchaser.

 

Gill Whinray is an Associate with Norris Ward McKinnon and leads the Property team. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters. Find out more about us www.nwm.co.nz