WHAT IF I DO NOT GET A LIM? IS THERE AN ALTERNATIVE TO A LIM? Practical guidance from Atticus Legal, Property Lawyers Hamilton
A LIM (Land Information Memorandum) is a written summary of information that the council holds on a property. We always recommend that purchasers obtain a LIM. And that they make their purchase contract conditional on obtaining a satisfactory LIM. However, they are quite expensive and the costs can mount up, especially if you have had a number of attempts at buying different properties. But if you don’t get a LIM how can you avoid buying a dog? This article sets out brief guidance as to what inquiries you can make with the council as a second-best alternative to a LIM.
For an explanation of LIMs and what they do and don’t contain see our article ‘What is a LIM? And do I need a LIM? on our website at https://atticuslegal.co.nz/what-is-a-lim-do-i-need-a-lim/
The alternative to a LIM
As an alternative to a LIM, you can make inquiries at the local council and the regional council to satisfy yourself that there are no issues with the property known to either council. If you do not want to obtain a LIM then relevant over-the-counter inquiries at both councils may reveal helpful information or alert you to problems with the property ‘on record’. However such informal verbal inquiries will always be less reliable than a LIM.
This article gives guidance on what general inquiries you can make at the council as an alternative to a LIM. If you are already aware of, or suspect, a specific potential problem (see below regarding any apparent alterations) then your inquiries should also specifically address that as well.
Seller’s warranties – But it’s always a good idea to make inquiries (or get a LIM) anyway
The seller gives various warranties (promises) in the standard general terms of your purchase contract. For example, that the seller has not received any notice of, and does not have any knowledge of, any requisitions or outstanding requirements imposed by a local authority. The seller also usually warrants that if they have carried out (or engaged someone to carry out) building works that required a building consent then the seller obtained the required building consent and, on completion, a code compliance certificate (CCC) from the council. For a description of the consequences of the seller not obtaining the required building consent and/or CCC see the article on our website ‘How to avoid a DIY disaster’ at https://atticuslegal.co.nz/home-renovation-how-to-avoid-a-diy-disaster/
Nevertheless, if there is a problem with the property it is always better to know this before settlement, rather than finding out later at which time your only remedy may to bring legal proceedings which can be expensive. For example, if a problem is found on the council records (eg. contamination or lack of a CCC) you may be able to negotiate an appropriate deduction from the price to be paid on settlement. If you are making informal inquiries, rather than obtaining a LIM, the ideal is to make your inquiries before you sign the purchase contract.
Inquiries you can make at council as an alternative to a LIM
Over-the-counter inquiries you can make at the building department and the town planning department of the local council include the following (inquiry numbers 8 and 9 below should be repeated at the regional council):
- Existing zoning and any proposed changes (including permitted uses for nearby properties, especially if the property is in a mixed-use zone or is on or near a zoning boundary);
- Whether the property lies in an area designated as at risk of flooding;
- Whether there are any town planning ‘designations’ (eg road widening or proposed arterial routes) affecting this or nearby properties;
- Whether there have been any ‘notified applications’ in respect of this or any nearby properties (eg. for consent to use for a controlled or restricted activity);
- In the case of a section, whether the council has soil test reports on file and/or specific foundation requirements/recommendations;
- Whether the dwelling and other structures on the land requiring a building consent have the required building consent and have had a CCC issued. If there are any apparent alterations which would have needed a building consent you should specifically inquire whether those alterations have the required building consent and CCC;
- Compliance with pool/spa fencing requirements (if relevant);
- Whether there are presently any outstanding unsatisfied council requisitions or requirements;
- Whether there is any record of contamination in respect of this or any nearby property;
- Whether there are any public drains/public sewer lines affecting the property (and where those pipelines lie) – this is important as generally you cannot build over these;
- Whether there is any work planned which will affect the property (eg. road widening proposals).
Contamination – Further investigation
In addition, especially if the property has been rented out, you should also consider getting a methamphetamine test done. Meth contamination is more common than you might think. Typically regional councils hold any contamination records rather than a local council such as Hamilton City Council, although the local council may hold them as well. Their records will only tell you whether or not there is any known existing (or perhaps historical) contamination problem in respect of the property. Carrying out a meth test may provide further information.
Other strategies to help avoid buying a dog include making your purchase contract conditional on a satisfactory builder’s report. And, in the case of a unit title property, examining the required disclosure documents and making certain other inquiries we can guide you on.
WANT TO KNOW MORE? Just ask Atticus Legal, Property Lawyers Hamilton
CALL ANDREW SMITH, the owner of Atticus Legal, for expert professional advice on any of the matters referred to in this information sheet.
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LAWYERS HAMILTON, PROPERTY LAWYERS HAMILTON NZ
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Disclaimer: The information contained in this information sheet is, of necessity, of a general nature only. It should not be relied upon without appropriate legal advice specific to your particular circumstances.
This information sheet is copyright © Atticus Legal, September 2016.