Land Information Memorandum
From WikiProperty
Reduce the Risks with a LIM
A Land Information Memorandum (LIM) provides information held by the local authority on a property. While it’s not essential, it is advisable to obtain one of these in relation to any property you are interested in purchasing - after all, it’s likely to be a most significant asset. The standard Agreement for Sale and Purchase has a LIM condition inserted as a standard term.
A LIM might include information about things such as potential erosion, contamination or flooding, structural requirements, where the street water pipes and sewerage run, rates details, consents and notices that have been issued relating to this or neighbouring properties, the zoning (which tells you what you can do with the land), likely future use such as new roads, information from other utility providers and any other information the local authority regards as relevant.
A LIM report can be particularly important if the purchaser wants to carry out alterations or additions to the property or to subdivide the property. It might also alert a potential purchaser to work undertaken without the necessary consents. Has a compliance certificate been issued for existing alterations or construction work?
A LIM may show areas prone to flooding or zones, which in heavy rain may pond. Having information of this nature will help you to decide if that property - which looks so impressive during a dry spell - is really what you want! In other cases the LIM may be an early warning of road widening or proposed new arterial routes likely to be built near a property, which may affect its future value.
You should always compare the information on the LIM with what is on the property - for instance, if there is a recent structure but no reference on the LIM to a consent being issued, you may want to ask some questions.
If you are borrowing money to purchase a property the lender will often require you to obtain a LIM and depending on the information contained in that report may impose new terms on the loan, which may impose additional expenses.
When compared with the risks of not getting a LIM the cost is minimal*. A LIM can take up to 10 working days to obtain, but this should not in itself deter you, even if there are other buyers. Alternatively in some areas a limited property report can be made available, at lower cost and in a shorter time.
In most cases there should be little in the LIM to cause you concern about the property. However, if there are problems and you have a sale and purchase agreement that is subject to a satisfactory LIM you can request the seller to fix the unsatisfactory aspects or face possible cancellation of the contract.
A word of warning - A LIM does not contain all information relating to properties. It won’t for instance verify survey measurements and may not contain contamination reports held by regional councils. The onus is on purchasers to seek expert reports where these are required.
Call your lawyer or the local authority for a costing, and perhaps timeframe for producing a report
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