When it comes to buying a property, the term due diligence is bandied about a lot. That basically means doing your official research into the property you’re interested in, and nine times out ten, on the top of the list of recommended research is usually a LIM report. So, what is a LIM and why do I need one?
What Is a LIM, and Why Do You Need One?
A LIM (which is shorthand for a Land Information Memorandum) is a report issued by the local city or district council which provides a summary of all the information that the local authority has on file about that particular property, in particular, all works on the property that council has had an involvement in.
It will typically include:
- Zoning information
- Details of current rates, and any outstanding rates, if any, owed on the property
- Information on any natural features which impact the use of the property (such as flooding or erosion, wind risk and subsidence)
- Scheduled roads or utility (such as drainage) developments which impact the site
- 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.
The important thing to remember with a LIM report is that while it can contain vital information on a property you’re interested in buying, it won’t contain ALL information on any given property. For example, it won’t contain recent survey measurements, information on the building’s structural integrity, floor plans, or address any fears of contamination from substances such as methamphetamine.
These concerns will need to be addressed with separate reports from building and meth contamination assessors and experts.
So Why Do You Need a LIM Report?
It can tell you if previous alterations or construction work has been signed off by the council. It may show areas liable to flood or which may be prone to subsidence or erosion causing problems in the future. These are things which you may not notice in a typical viewing of the property.
A LIM may also alert you to things such as road widenings or new routes which may affect your amenity or the future value of the property.
Always look at the LIM in the context of what is currently in place at the property. Its important to note that not all works done on a property will appear on a LIM as not all works require council involvement. However, if there is noticeable recent construction on the property and it doesn’t appear to be listed in the LIM, you should discuss this with your lawyer and your agent.
Of course, as with any due diligence, there is a cost associated with requesting a LIM report and this is typically around $300 to $400 depending on the urgency and the Council concerned.
The crucial aspect to consider when paying for a LIM, or a building report and the like, is comparing 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, and the impact it may have on your resale value.