When it comes to buying a property, the term “due diligence” is bandied about a lot. That means doing your official research into the property you’re interested in, and top of the list of recommended research is usually a LIM report.

But what is it, and why do you need one?

A LIM or Land Information Memorandum is a report issued by the local city or district council which provides a summary of all the information that local authority has on file about that property, in particular, all works on the property that council has had involvement in.

It will typically include:

• Zoning information
• Information on natural features which impact the use of the property (such as flooding or erosion, wind risk and subsidence)
• Scheduled roads or utility (such as drainage) developments which impact the site
• Details of current rates, and outstanding rates, if any, owed on the property
• Information on any protected or heritage buildings or trees on the property
• Details of resource consents, or building consents issued for work on the property.

The important thing to remember with a LIM report is that while it can contain vital information on a property you’re interested in buying, it won’t contain ALL information on any given property.

For example it won’t contain recent survey measurements, or information on the building’s structural integrity, or address fears of contamination from substances such as methamphetamine.

You will need to have those concerns addressed with separate reports from building and meth contamination inspectors (note: the NZ Standards Authority is currently preparing a nationwide standard for meth contamination testing).

So why do you need a LIM report?

It can tell you if previous alterations or construction works has been signed off by the council. It may show areas liable to flood or which may be prone to subsidence or erosion causing problems in the future. These are things which you may not notice in a typical viewing of the property.

A LIM may also alert you to things such as road widenings or new routes which may affect your amenity or the future value of the property.

Always look at the LIM in the context of what is currently in place at the property. It’s important to note that not all works done on a property will appear on a LIM as not all works require council involvement. However, if there is noticeable construction not listed in the LIM you should discuss this with your lawyer and the real estate sales consultant prior to making an offer.

Generally speaking it is a good idea for your lawyer to look over the LIM anyway as they may spot something you miss. And remember you can request aspects of the LIM that are of concern be remedied by the vendor as a condition of sale.

Of course, as with any due diligence, there is a cost associated with requesting a LIM report. This can be a hurdle, given that there’s no guarantee you will have your bid or offer accepted.

The Auckland City Council currently charge $293.00 for a standard LIM and $395.00 for an urgent LIM. In most cases you can cancel a LIM request, though it must be done in a timely manner and there may still be a cancellation fee depending on how much work on the LIM has already been undertaken.

The crucial aspect to consider when paying for a LIM, or any other aspect of due diligence such as a building report, or meth contamination test, is comparing it to the cost of finding something fundamentally wrong or non-compliant in the property at a later date; what it might cost to fix or insure, or the impact it may have on your resale value.

Think of the cost of a LIM as a kind of bright line test for how much you really want the property in question. If you have a clear idea of what you want in a new home and the property ticks all those boxes, the cost of a LIM, given the information it provides, and the proportion of the overall property value it represents, is probably worth it. In the end it represents peace of mind around one of the biggest purchases you will ever make.

Checklist:

Remember to cancel:

☐ Newspaper and/or milk delivery.

☐ Telephone, internet and cable TV.

☐ Gas, water and electricity (arrange a final meter reading).

Organise for moving day:

☐ Obtain supply of boxes (the supermarket can be one supplier).

☐ Get packaging tape and heavy marker pens.

☐ Arrange for furniture removal (get quote, confirm time).

☐ Arrange care of your children on moving day.

☐ Make suitable arrangements for any pets.

☐ Arrange transit insurance and contents and fire insurance

for your new home.

☐ Organise shifting times with the purchaser of your old

property and the previous owner of your new one.

Notify your change of address to:

☐ Bank, credit card and charge card companies.

☐ Post office for redirection of mail.

☐ Elections Registrar.

☐ Registrar of motor vehicles and drivers license.

☐ Tax department.

☐ Insurance companies.

☐ Hire purchase or finance companies.

☐ Investment companies.

☐ Local council.

☐ Clubs and organisations.

☐ Police (if you own and store firearms).

☐ Friends and relatives.

☐ Magazine subscriptions.

☐ Doctor, dentist, accountant, lawyer.

Don’t forget:

☐ Clean the stove and defrost the fridge/freezer.

☐ Tidy the yard.

☐ Ensure that the chattels that have been sold with the

property are not accidentally packed.

☐ Disconnect all appliances.

☐ Disconnect the TV aerial.

☐ Return any borrowed items.

☐ Throw out items that you don’t intend taking with you.

☐ List valuable items for special care when moving.

☐ Advise removal company of dangerous goods being moved

(i.e. ammunition, petrol, spirits, chemicals).

☐ Securely pack all jewellery, money, special documents

and papers (i.e. legal, tax, insurance etc).

☐ Set aside items you will need on the day of the move so you

can take them with you (i.e. food, drinks, cleaning products).

☐ Pack each room leaving the boxes stacked and labelled with the

room they are to be moved to. It is a good idea to write on each box

a list of its general content.

☐ Clearly label boxes containing breakables as ‘Fragile’ and identify

these items to the removal people.

☐ Pot and pack away plants and cuttings you are taking with you.

☐ Explain your packing procedure to the removal people and be at

your new home when they arrive.

Do not:

☐ Put breakables or liquid filled containers in drawers.

☐ Overload drawers and make furniture too heavy to shift

(too much weight can damage furniture).

☐ Move netting, barbed wire, timber, wood, coal etc without

special arrangements being made.

☐ Store perishable goods where they might be overlooked.

Make arrangements to:

☐ See your solicitor to sign transfer documents/mortgage

discharge documents.

☐ Enrol children in new school.

☐ Coordinate the forwarding of any files from the children’s

previous school to their new one.

Organise for your new home:

☐ Contact Harcourts Connect to connect your gas, electricity and

telephone on your behalf: www.harcourts.connectnow.co.nz

☐ Newspaper delivery.

☐ Telephone.

☐ Internet and cable TV connection.

☐ Gas, electricity and water.

The week before moving:

☐ Remind and confirm dates/times/locations for furniture

removal company.

☐ Confirm moving in/moving out details and key exchange

with your Harcourts consultant.

☐ Say goodbye to neighbours.

One last check:

☐ Nothing left behind?

☐ No clothes at the dry cleaners?

☐ No gear stored away from your property?

☐ Electricity, gas and telephone disconnected?

☐ Water turned off and no taps left running?

☐ Windows and doors latched?

☐ Keys with solicitor (if appropriate)?

After it’s all over:

☐ Have spare keys cut.

☐ Make an insurance claim if any damage has occurred

during the move.

☐ Teach children how to get to their new school.

Open for inspections give you a great first impression of a property and you’ll know almost immediately if it’s one you want to pursue. But that first visit can be much more than a “once over lightly” impression. How do you make sure you’re getting as much information from it as possible?

Use the time to perform a thorough first property inspection. Later on, you’ll want to engage professionals to inspect the building’s structure and health, but it’s a good idea to use your initial tour of the home to see some things for yourself.

The Structure

When inspecting a property, chances are the current owners are going to present the interior of the property in the best possible light. They will have cleaned and tidied, perhaps added a new coat of paint, or even had the home styled with beautiful furniture. Whilst these things will help you to appreciate what the home could look like for you, at this stage, it’s more important to focus on the dwelling’s structure.

Look For:

• Damage from pests. Recent termite damage in wooden structures is a huge red flag. Have a look for bores through wooden frames, or dirt tubes in the foundation or exterior walls that hint to borer infestation.
• Poor construction. Windows and doors that jar, or cracks in the walls around doors and windows are both signs of poor construction.
• Wet spots on walls or ceilings. Condensation within the home can lead to mould build-up, timber decay, leaks, corrosion and even loss of structural integrity.
• Cracks in the foundation. Some small cracks in a home’s foundation can be harmless, but large cracks either running down the foundation or across could mean a home is shifting, which can cause significant structural damage over time.

If you see anything through this process make a note of it, and make sure to mention it when you have a professional building inspector go through the property.

The Location

Location means more than the general neighbourhood. You may be attracted to the area, but take a look at the property’s exact location for things that may bother you over the long-term, hurt re-sale value, or cause lifestyle issues.

Things to consider are:

• Is it on a busy main road? Houses on main roads can attract lower prices than those on quieter, private and less congested roads. You’ll also have to get used to the noise of heavy traffic.
• Is it next to a retail or commercial space. This can create high levels of traffic and additional noise, depending on the type of business and its operating hours. Also be mindful of properties next to land that may be zoned as retail or commercial. Talk to your sales consultant about what zoning around the property means for potential development
• Is the property near railway lines? A home close to public transport is always convenient, but a home that shares a border with a train line, for example can cause a lot of excess noise, potentially hurt re-sale value, and cause safety issues for young family members depending on fencing around the property.
• Are there power lines over the land/property? Sometimes found on larger parcels of land, power lines have been known to drop property prices.
• Is the property on a flood plain? Depending on the city, the climate and the proximity to dams, lakes and watercourses, the potential of flooding on the property will be different. Be aware that houses within the same street can be impacted differently by flood waters. If you have concerns talk to you sales consultant, property inspector and the local council.

The Surrounding

• Take note of the neighbouring properties on each adjoining border for any clues you might not be comfortable long term.
• Are the neighbours’ yards neat and tidy? It might not directly impact on the property you’re considering, but what about when it comes time to sell the property? Would untidy yards next to yours reflect poorly on the area.
• Do they have pets? It might not be an issue, particularly if you have pets of your own. But look for problem pets. Is a neighbour’s dog barking non-stop during the inspection? Are animals loose or roaming? Is there evidence of pet damage to shared fences or common areas?
• Do you have a comfortable level of privacy? Take a look at different angles around the home, particularly on smaller blocks or apartments. Are you too close to neighbours? Can you easily hear them through the walls? Are certain windows placed directly opposite a neighbour’s window? Is the property fenced off from neighbours?

It’s important to remember that none of these things always have to be immediate deal breakers on a property you’re interested in. It’s about arming yourself with as much information as possible so you can make an informed decision and end up with a property you are happy with, for an amount you feel is reasonable.

Once you have made your first visit and if you decide you wish to proceed in making an offer, seek good legal, building and financial advice from the experts.