When buying a property, you have the option of obtaining a Land Information Memorandum, commonly known as a “LIM”.
A LIM is issued by the Local Council (“Council”) and provides information that the Council holds on file about the property.
How do I get a LIM?
To obtain a LIM, either you or your awyer (or sometimes the Real Estate Agent may offer to apply for it on your behalf) make an application to the appropriate Council and at the time of the application, pay the appropriate application fee.
What does it cost?
The fee for the LIM depends on which council is responsible for issuing the LIM but tends to range from $100-$150.
When do I have to the LIM?
It is important to note that if you have made your contract conditional upon a satisfactory LIM being obtained, then the standard Agreement for Sale and Purchase of residential property provides that you must apply for the LIM within 5 working days from the date of the contract.
What information is included in the LIM?
There are legal requirements as to what must be included in a LIM and these are:
- Information identifying any special features or characteristic of the land which might include potential erosion, evasion, falling debris, subsidence, slippage or inundation (flooding) or the likely presence of hazardous contaminants;
- Stormwater and Sewage drains as shown on the property record;
- Rating information;
- Information on any consents, Certificates, Notices, Orders or requisitions affecting the land or any building on the land previously issued by Council;
- Any Certificates issued by a building certifier;
- Information on land use and any conditions attached to the use of the land;
- Information notified to Council by any statutory organization;
- Information from any network utility operator pursuant to the Building Act 1981.
Why is this information useful?
The information provided in the LIM is useful for a number of reasons as it gives you a history of the property. For example if you are purchasing a vacant section for the purpose of constructing a house, the LIM can provide information on the suitability of the land for building. The LIM also provides information on the restrictions in respect of further development, land use and renovation.
Another very important function of the LIM is that it discloses to a potential purchaser the building consents and certificates that the local council has issued for the property. This is where you as the Purchaser have an important role. As you have viewed the property, you have a much better idea of whether the physical appearance of the property, matches the consents and certificates disclosed by the LIM. Some examples are:
- You may notice that a new structure has been added to the property such as a conservatory and there are no permits recorded on the LIM.
- The property might have a spa pool or swimming pool, which the LIM has no record of.
- The property has a new log burner but the LIM has no record of this or has record of a different type of fire being in the property.
Please note however there are some structures on the property, which may not necessarily require the prior approval of a Council for their construction. As Councils differ in their rules if you are unsure it is important to check with them.
If you do find a problem in the LIM, then the vendor maybe willing to fix this and if you are relying on the standard LIM clause in a Residential Sale and Purchase Agreement then in most cases you must give the vendor an opportunity to elect whether or not they are willing to fix any problems.
It is therefore important that if the LIM discloses a problem with the property or you have any concerns about the LIM, you should immediately contact your Solicitor to discuss the steps, which should be taken to protect your position.
As a LIM provides important information about a property a prudent purchaser should make the contract conditional upon a satisfactory LIM report.