When you're purchasing a property, whether it’s your first home or an investment, it's easy to get caught up in the excitement of finding the perfect space. However, before you sign on the dotted line, there are several important checks to make to ensure the property you're buying doesn’t come with hidden issues or unexpected costs. One of the most critical steps in this process is ordering a Land Information Memorandum (LIM) report.
ALIM report is an official document issued by your local council that provides a comprehensive overview of the property you are purchasing, including key information about its legal and physical status. This information can have a significant impact on your decision-making, and understanding what’s included in a LIM report can save you from financial stressors down the line.
Whyis a LIM report important?
To identifyhidden risks and issues:
ALIM report helps uncover any potential risks associated with the property that may not be immediately visible during a viewing. For example, the report might reveal unresolved consent issues for previous work, unconsented alterations, or environmental hazards like contamination or flooding risks. Without this information, you could end up purchasing a property with costly surprises, such as the need for expensive remediation work or fines for non-compliant structures.
Assessing the property’s true value:
Understanding a property's full legal and physical status is critical for determining its true market value. Issues such as zoning restrictions, flood risks, or outstanding debts may significantly impact the property’s worth. By ordering a LIM report, you can factor these considerations into your purchasing decision. It may even provide negotiating leverage to secure a lower price if there are any concerns or liabilities attached to the property.
To help secure finance:
Many lenders, particularly banks and financial institutions, will require a LIM report as part of their due diligence process when approving a loan. The report gives the lender confidence that there are no hidden risks or legal issues that could affect the property's value or your ability to repay the loan.
Legal protection:
The LIM report serves as an official record of the local council’s knowledge of the property. If issues arise after you purchase the property that were not disclosed in the LIM, the council may be legally liable if the report contained in accuracies. Essentially, it offers an additional layer of legal protection, as the information contained in the LIM is backed by the authority of the local council.
What information is included in a LIM report?
A LIM report contains key information about the property, including but not limited to:
· Capital value, rates and any unpaid rates –this sets out the rates owing up until the date the LIM was ordered.
· Building consents – this sets out the building consents applied for and accepted for the property. Reviewing these consents can ensure that the property you are purchasing is fully consented and there are no unconsented additions that may cause problems in the future.
· Resource consents – this sets out the resource consents applied for and accepted for the property.
· Land classifications – these characteristics set out features on the land that may have an impact on your property.
· Services – this sets out whether the property is connected to public water, sewer and stormwater.
· Zoning and land use restrictions – this sets out the zoning of the property and where it is located in the district plan. The property may fall within some qualifying matters which affect the way you can use your property and a LIM will ensure that you are informed of this.
· Hazards on the property – this sets out whether the property you are purchasing is on land that may potentially be hazardous.
· Local consents – this sets out consents within a certain distance of the property and what activity has been applied for.
How to Order a LIM Report?
Ordering a LIM report is simple. You can request one online through your local council’s website. You'll need to provide the details of the property and pay the fee, which varies by region. Alternatively, the team at Absolut Legal can assist you with this and order the LIM for you.
LIM fees for local Councils are:
- Christchurch City Council: $290 (10 working days) or $390 (5 working days)
- Selwyn District Council: $300 (10 working days)
- Waimakariri District Council: $236.50 (10working days)
- Ashburton District Council: $307 (10 working days)
What Happens If You Don't Order a LIM Report?
While ordering a LIM report isn’t legally required, skipping this step can be risky. Without a LIM, you are buying the property without full knowledge of potential problems, compliance issues, or financial liabilities. Discovering such issues after the purchase can be costly and time-consuming, leaving you with no claim against the seller or the council.
Conclusion
Ordering a LIM report is one of the best ways to protect yourself when buying a property. It can reveal hidden risks, help you avoid costly mistakes, and provide valuable legal protection. Whether you're purchasing a home or an investment property, a LIM report is a vital part of the due diligence process.
If you need assistance ordering or reviewing a LIM report, contact the expert team at Absolut Legal today. We're here to help ensure your property investment is a safe and informed one.
