Angela recently emailed us to ask: ‘I’m looking at buying a house, why do I need to get a LIM report?’
This is an excellent question, especially for first home buyers who may not have any experience with all the complex aspects of purchasing a property. While it’s not compulsory to obtain a Land Information Memorandum (LIM) prior to purchasing a property, it is highly advisable to do so, and to have an expert (ie. your great property lawyer) help you understand it.
What is a LIM?
A LIM is a report prepared by the local council containing information on various aspects of a property such as:
A more detailed description of the items in a LIM can be found here.
Why is it important?
Usually a LIM will be the only way you’ll be able to confirm any alterations to the property have been carried out with the local council’s consent. This is critical for a number of reasons:
A LIM may also show any proposed plans to widen or build new roads near the property which could affect its future value. It may also show issues with the property that may not be evident in all seasons, such as any areas that are prone to flooding; something that may affect your future landscaping or renovation plans.
If you are borrowing money to buy the property it’s quite likely that your lender will require you to obtain a satisfactory LIM as a condition of the loan.
Peace of Mind
Getting a LIM costs a little over $300 (for routine processing), but varies a little between councils. This might seem like a lot of money to spend when there is no guarantee that you will actually purchase the property. However, there’s every possibility that knowing what it contains will save you much more in the long run.
Adding a clause to your sale & purchase agreement to make it subject to your approval of the LIM is advisable. This means that, if anything unsatisfactory is uncovered, you can request, if possible, that it is remedied prior to settlement. You would also have the opportunity to cancel or renegotiate the agreement in this situation. Read more about putting conditions in a sale and purchase agreement here.
Understanding a LIM
Unless you are a property expert you’ll likely want a hand reviewing your LIM to fully understand its contents. Your first port of call should be your property lawyer; they will be able to advise you on any areas of concern or legal issues in the document. They will also be able to advise you on your options should something in the LIM turn out to be unsatisfactory.
Thinking of purchasing a property? Reviewing a property’s LIM report comes as standard in our full service conveyancing package. Phone 04 970 3600 or email us on email@example.com and we’ll take the complex work out of buying your next home.