The Importance of a LIM Condition

See exactly what you're buying with a LIM

As Farmer Freddy makes his way home for lunch he begins to think about the conversation he overheard that morning between John and Bill, the two recent additions to his farming staff. 

Freddy couldn’t recall John ever mentioning that he had received legal training, but yet he sounded so confident in the advice he was giving Bill. Perhaps Pebbles might know something about it, muses Freddy as he spots her car outside the house.

“Good afternoon, Dad,” greets Pebbles with a great big smile. “I have some very exciting news!”

“You’ve finally decided to quit being a lawyer to come and help out on the farm?” replies Freddy with a grin as he spots the freshly prepared sandwiches set out on the table.

“Very funny, but no - I have put an offer on a house!” exclaims Pebbles. “The Agreement is subject to finance of course, and a couple of other conditions but I’m feeling pretty good about it. I can finally have a place of my own.”

“That’s great, Pebbles, and believe it or not, quite topical,” comments Freddy.

“How so?”

“Bill, one of the new guys, has also just put an offer on a house, subject to obtaining a LIM report from the Council. I’m not quite sure what the significance of a LIM is but John seems to think it’s a waste of time. What are your thoughts?” asks Freddy.

“Bill would be silly not to get a LIM, Dad. I’m certainly getting one. In fact, I think the Bank requires me to get one before it will approve the lending,” states Pebbles.

“But why, and what sort of information does it include?” probes Freddy.

“A LIM, or Land Information Memorandum as it is properly called, can be requested from the local authority under the Local Government Official Information and Meetings Act 1987. It is intended to include information on the land which the Council holds in its records, including:

  1. any special features or characteristics of the land, i.e. the potential for erosion or the likely presence of hazardous contaminants;
  2. the location of stormwater and sewerage drains;
  3. any rates owing in relation to the land;
  4. any consents, certificates, notices, orders, or requisitions affecting the land or any building on the land;
  5. notifications under parts of the Weathertight Homes Resolution Services Act 2006; and
  6. the use to which that land may be put, and conditions attached to that use.”

“Without looking at a LIM, a prospective purchaser might not know that the fireplace which was installed by the previous owner never received the tick of approval from the Council in the form of a Code Compliance Certificate. They might also not be aware that the swimming pool in the back yard was put in without a Resource Consent. Both of these things would quickly become the new owner’s problem after settlement, when they could have easily been address beforehand.”

“I wonder why John was telling Bill not to get one then,” comments Freddy.

“I have no idea, Dad. Perhaps John was talking about bare land which was going to be under development. If that were the case, a LIM might not tell them anything they don’t already know. Although it could still reveal contaminated soil or filled land which may impact on earthworks or constructions methods,” replies Pebbles.

“The point is, Dad, a LIM provides information which may be extremely relevant to someone’s decision whether or not to purchase the property,” summarises Pebbles.

“Based on what you’ve said,” replies Freddy, “I would tend to agree. So how does one obtain a LIM and at what cost?”

“A LIM will usually cost between $200 - $300 if it’s non-urgent, which must be produced by the Council within 10 working days. Urgent LIM’s tend to cost more but can be produced much quicker, usually within 3 days,” explains Pebbles.

“You can apply for a LIM direct from the Council or, alternatively, you could ask your lawyer to obtain one on your behalf, along with a summary of the key information – they can be quite thick documents. If you’re interested Dad, I can bring mine in for you to have a look at. I should be receiving it in the next day or so,” states Pebbles.

“That would be good thanks, Pebbles. In the meantime, maybe you could have a chat to John and Bill in case they’ve been misinformed – which I suspect they may have been,” suggests Freddy.

“Always here to help, Dad.”

The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document. 

If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser. 


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