Private Law

Is a LIM Report Necessary?

Is a LIM Report Necessary?

This post is written by Miriam Betts and Brianna Freebairn, Associates at Freebairn & Hehir who both specialise in residential conveyancing.

If you’re a first-time buyer in the Manawatu, you might be wondering about the significance of Land Information Memoranda (LIM) and whether you should obtain one when you are looking to purchase a home.

We have clients all over the country and have noticed that practices around LIM reports vary greatly. In cities like Auckland and Wellington, vendors often supply a LIM Report to prospective purchasers. Here in Palmerston North (and the Manawatu generally) it’s quite rare. This puts the onus back on the purchaser to make a decision about whether they will purchase one or not.

Why people opt for Council records instead

One of the main reasons people avoid obtaining a LIM Report is the cost. With the Palmerston North City Council currently charging $455, this can be a real barrier. Time constraints are another issue, as it can take up to 10 days to process a LIM request. Councils don’t commonly offer urgency services anymore.

Considering the fact that vendors in Palmerston North rarely provide a LIM, it’s understandable why buyers might be hesitant to request one. You might worry about missing out on a sought-after property or feel like the expense is unjustified if the report comes back clean. As a result, people will often rely on their own examination of the council’s property records.

We understand these pressures, but as lawyers we will always recommend a LIM.

What a LIM report provides

A LIM sets out crucial details about a property. These will include zoning, resource and building consents, unresolved issues, service maps, soil contamination and potential natural hazards. All of this information is brought into one place and the Council has a duty to ensure it is complete.

If you are completing your own research, you will need to try to gather this from council records and online databases. This is not likely to be as complete and the council is less likely to be liable for inaccuracies and omissions in its records. If you purchase a LIM and it fails to disclose crucial information, you may have a direct claim against the council.

That legal recourse is not likely to be available if you conduct the research yourself.

For this reason, courts have consistently ruled that without a LIM, property owners have contributed to their own loss in cases involving leaky homes, building defects, and natural hazard damage. This can lead to reduced damage awards.

Don’t overlook the LIMitations

While a LIM provides important information, it doesn’t give you the full picture of a property’s condition. That’s where a building report comes in. A property inspection report can identify significant defects, maintenance issues, and problems caused by gradual deterioration, such as structural issues, leaky buildings and mould.

Final Thoughts

Buyers in Palmerston North don’t generally obtain a LIM when they’re purchasing a property. This is their decision and in view of local practices it’s a decision we understand. As legal professionals, however, we genuinely believe that a property LIM is crucial to protecting your interests as a home buyer.

So, whether you’re purchasing a home in the heart of the city or in the picturesque countryside, make sure you take the time to obtain a LIM report and a building inspection to ensure your investment is a sound one.