Checking Council Records – Land Information Memorandum or Property File – What do I need as a Purchaser?
Buying a house is a serious undertaking. For most people, their home is their largest asset, so it is crucial to complete careful due diligence before purchasing a property.
We can assist with a purchaser’s due diligence investigations, such as reviewing the legal title to the property and agreement for sale and purchase. Still, purchasers should also complete their own due diligence such as reviewing Council’s records under a Land Information Memorandum (LIM) or Property File (in addition to obtaining builder’s reports and bank approval) before declaring the agreement unconditional.
Land Information Memorandum (LIM) or Property File
One important decision is to decide whether to obtain a LIM and/or Property File for your intended property. While there is some overlap between these documents (LIM reports draw on information contained in the Property File), LIMs and Property Files have different purposes, and therefore can be used for slightly different purposes.
A LIM is a report prepared by a local council that summarises information it has on a particular property including:
- Building consents and resource consents for the property – It is important to ensure that all work completed at the property has obtained the necessary consents (including fuel burners). This is particularly important as insurers may be reluctant to provide insurance for unconsented buildings/works. We, therefore, recommend you disclose any issues with your proposed insurer early to give them time to ascertain whether they can provide you with cover. Failure to obtain insurance can cause serious issues regarding your bank, as a failure to maintain insurance constitutes a breach of mortgage covenants.
- Resource consents for properties in your area – Information on neighbouring resource consents can be useful to show what other developments are happening in your area, i.e. if there will be a new play centre or preschool nearby, or whether there is going to be a large scale development down your street (which may cause disturbance during the build and greater congestion of the roads).
- Information on any special features of the property including, whether there are protected trees, a heritage building located on the land. These special features could also be environmental features or hazards that impact the property, i.e. erosion, slips, flooding, pollutants etc. In some cases, these special features could impact your ability to obtain insurance for the property, so it is important to disclose any potential issues to your preferred insurer early.
- Zoning information and the planning relating to that particular area.
- Aerial photographs, and plans detailing the public and private services available to the property. It is important to check that the property has access to water, sewage and stormwater services and to check the location of those services, in particular, to ensure the services do not run beneath any buildings on the land for risk of flooding.
- Rates details for the property (including water rates if applicable).
- Other information or correspondence the council has relating to the property.
As a LIM is a report issued by a local authority, purchasers who order LIM reports which contain incorrect information can take action against the council which issued the LIM.
A LIM can take between 10-15 working days to issue (council dependent).
(2) Property File
A property file is held by the local council and is intended to be a complete record of what the council knows about the property. The property file usually includes copies of original plans for buildings on properties, together with copies of consents that have been issued in respect of that property. It is common practice, where there are discrepancies with the LIM report, to have the property file checked to see if the differences can be reconciled from the property file information.
It can be helpful to review the original plans and consents for a property, especially if you can read these alongside a builder’s report for that property. A builder may be able to flag whether something may not have been completed to code, in which case a purchaser should check the LIM, or request copies of the building consents from the vendor. A builder will also be able to indicate whether there has been any recent work or extensions at the property, which you can compare against the original house plans.
Reviewing the original plans may also reveal whether any work completed was not permitted or consented to by council at the time. This can be important from an insurance perspective.
Property files are readily available from the local council and costs between $20-$100 depending on the council and how urgent your request is.
What is better?
Both the property file and LIM have their own particular uses. We recommend, however, that often both should be considered in light of a builder’s report, and alongside any finance and insurance requirements.
We are happy to discuss any queries you may have regarding LIM and property files, and how these should be considered in light of building reports, finance and insurance in your next purchase.
For more information
If you’re looking to buy a house and would like more information, please contact Helen Nathan and the team at Morrison Kent on 07 348 2030. We are happy to discuss any due diligence queries you may have.