The Importance of LIM and Building Reports When Buying a Home

Buying a home is a significant investment, and ensuring that you have a full understanding of the property's condition is crucial. Two main documents play a key role in providing essential information before making the big leap to secure your home. These are the Land Information Memorandum (LIM) report and the Building Report. 

The Power of a LIM Report

A Land Information Memorandum (LIM) is a comprehensive document that provides crucial details about a property. This includes zoning information, resource and building consents, unresolved issues, service maps, soil contamination, sewer locations and potential natural hazards. The LIM brings all this information into one accessible place, and the council holds the responsibility to ensure its completeness.

While you could attempt to gather this information through your own research using council records and online databases, it's important to note that this DIY approach may not be as thorough. Moreover, the council is less likely to be held liable for inaccuracies and omissions in its records when the research is conducted independently. Purchasing a LIM, on the other hand, provides a level of legal recourse. If the LIM fails to disclose essential information that the council was aware of, you may have a direct claim against the council.

In legal contexts involving leaky homes, building defects, and damage caused by natural hazards, courts have consistently ruled that property owners who did not obtain a LIM contributed to their own loss. This lack of due diligence can result in reduced damage awards, highlighting the importance of this document in protecting your investment.

The Role of a Building Report

While a LIM report provides vital information about a property's history and potential risks, it may not offer an overview of its current condition. This is where a Building Report comes into play. Conducted by a qualified building inspector, this report identifies significant defects, maintenance issues, and problems resulting from gradual deterioration.

A thorough property inspection report should cover structural problems, signs of a leaky building, issues arising from deferred maintenance, and areas prone to dampness or mould. It is important to hire a qualified building inspector with professional indemnity insurance, and a deep understanding of the legal requirements in their role.

While obtaining LIM and Building Reports may incur additional costs, it is a small price to pay for the peace of mind that comes with making an informed investment decision. Your home is likely the most significant purchase you'll make, and understanding its history and current condition is an essential part of the buying process.

Here at Loan Market Queenstown, we are able to offer recommendations around building reports and LIM’s, so just reach out to us if you require additional advice.