How to Obtain and Interpret a LIM Report
When buying or selling property, obtaining a Land Information Memorandum (LIM) report is a crucial step in the due diligence process. A LIM report provides comprehensive information about a property, helping buyers make informed decisions and ensuring sellers are transparent about the property’s condition and history. This article will guide you through the process of obtaining and interpreting a LIM report, highlighting its importance and how to use it effectively.
What is a LIM Report?
A LIM report is a document prepared by the local council that contains all the information the council holds about a particular property. This information can include details about land features, building consents, zoning, and any potential hazards. The purpose of a LIM report is to provide a clear and accurate summary of the property, ensuring that all parties involved in a transaction are fully informed.
Why is a LIM Report Important?
A LIM report is essential for several reasons:
- Due Diligence: It helps buyers conduct thorough due diligence, ensuring they are aware of any issues that could affect the property’s value or usability.
- Legal Compliance: It confirms that any building work on the property has been properly consented and complies with local regulations.
- Risk Mitigation: It identifies potential risks such as flooding, land instability, or contamination, allowing buyers to make informed decisions.
- Negotiation Tool: It can be used to negotiate the purchase price or request repairs or remediation from the seller.
How to Obtain a LIM Report
1. Application Process
To obtain a LIM report, you need to apply through the local council where the property is located. Most councils offer online application forms, which streamline the process. For example, the Auckland Council provides an online application system where you can request a LIM report and pay the associated fees. Other councils, such as the South Waikato District Council and the Dunedin City Council, also offer similar services online.
2. Required Information
When applying for a LIM report, you will need to provide the following information:
- Property address
- Legal description of the property (e.g., lot and deposited plan number)
- Applicant’s contact details
- Payment details
3. Processing Time and Costs
The processing time for a LIM report can vary, but it typically takes up to 10 working days for a standard LIM and up to three working days for an urgent LIM. The cost of a LIM report also varies by council and urgency, generally ranging from $200 to $400.
Interpreting a LIM Report
Once you receive the LIM report, it’s essential to understand how to interpret the information it contains. Here are the key sections to focus on:
1. Property Information
This section includes basic details about the property, such as its legal description, boundaries, and land area. It may also include an aerial photograph indicating the property’s boundary location.
2. Zoning and Land Use
The report will provide information on the property’s zoning and any relevant planning regulations or restrictions. This is crucial for understanding what types of development or use are permitted on the property.
3. Building Consents and Permits
This section lists all building consents, permits, and compliance certificates issued for the property. It confirms whether any alterations or additions have been approved by the council and comply with building codes.
4. Hazards and Special Features
The LIM report will detail any known hazards or special features of the land, such as:
- Flooding risk
- Land instability
- Contamination
- Erosion
- Presence of hazardous substances
5. Utilities and Services
Information about the property’s connection to public utilities, such as water, sewerage, and stormwater drainage, will be included. This section may also indicate any limitations on building due to the location of these services.
6. Rates and Valuations
The report will provide details about the property’s current rates, any outstanding rates, and the latest rating valuation. This helps buyers understand the ongoing costs associated with the property.
7. Resource Consents
Details of any resource consents granted for the property, including conditions attached to them, will be listed. This is important for understanding any legal obligations or restrictions on the property’s use.
Matching the LIM Report to the Property
It’s essential to compare the information in the LIM report with the actual property. This involves:
- Checking that all listed building work matches the current state of the property.
- Ensuring that any alterations or additions have the necessary consents.
- Identifying any discrepancies between the LIM report and the property’s physical condition.
Seeking Professional Advice
Interpreting a LIM report can be complex, and it’s advisable to seek professional advice. A lawyer or conveyancer can help you understand the report and identify any potential issues. Additionally, a building inspector can compare the LIM report to the property to ensure all work is compliant and identify any unconsented alterations.
Obtaining and interpreting a LIM report is a vital step in the property transaction process. It provides comprehensive information about a property’s history, condition, and any potential issues, helping buyers make informed decisions and ensuring sellers are transparent. By understanding how to obtain and interpret a LIM report, you can mitigate risks, comply with legal requirements, and negotiate effectively, ultimately leading to a successful property transaction.