The phrase "LIM Report" is often a source of confusion.

This article will explain what a LIM Report is and why you as a purchaser of property should consider obtaining one.

A LIM Report, or a Land Information Memorandum, is issued by the local Council and discloses information held by the Council on file in respect of a particular property. A LIM Report provides a wide range of information, such as:

• Any special feature or characteristic of the land - such as whether the property is prone to flooding or erosion. 
• Information about public and private stormwater and sewerage drains. A LIM Report usually includes a map showing the location of drainage pipes.
  
• Information about rates.
  
• Whether there are any requisitions notified by Council which affect the land.
  
• Information relating to the use to which the land may be put and conditions attached to that use.
  
• Building permits that have been issued in respect of structures and additions on the property and whether these have been signed off or completed.
  

Building consents (previously known as "building permits") are particularly important for prospective purchasers and we would usually ask you to check if any structure or addition does not appear as having a consent on the LIM. For example, often a conservatory has been built on to an existing structure but no permit shows on the LIM as having been issued for it.

There is, however, the problem of incomplete Council records. The Council can only supply information that it actually has. Records may have been lost, stolen or destroyed. However, Hawke’s Bay records are generally in good condition as they have been carefully maintained since the 1931 earthquake.

Another problem with LIM Reports is that they take ten working days to process and this can significantly slow down a transaction. There is also cost - the Hastings District Council and the Napier City Council both charge $100.00.

It is good practice for a vendor to obtain a LIM Report as soon as the property is put on the market and to give a copy to prospective purchasers. If the purchaser has a copy of a LIM Report prior to signing an Agreement, the Agreement need not be conditional on obtaining a LIM. Because it takes ten working days to obtain a LIM Report from Council this means time saved for a vendor who wants an earlier unconditional Agreement.

Whether or not you should obtain a LIM Report depends on a number of factors. Some things to consider are whether the Council records have already been checked by you, what you intend to do with the property (if it is simply intended for demolition then a LIM Report may not be necessary), and whether the bank lending money on the property requires a LIM Report.

It is usual for us to apply for a LIM Report on your behalf and also to help you understand its contents. If you have any questions about LIM Reports, or any other aspect of a property transaction, then please contact a member of our Property Law team.