A Land Information Memorandum (LIM) provides information held by the local Council on a property. If you are purchasing a property we always recommend that you get a LIM. You are about to invest in what will be your most significant asset and you should be fully informed about the characteristics of the property before you go ahead. The standard Agreement for Sale and Purchase has a LIM condition included, all you have to do is circle ‘yes’ on the front of the Agreement. As Conveyancing Lawyers we strongly recommend this.
What does a LIM report include for home buyers?
A LIM can include information about things such as potential erosion, fault lines, contamination and flooding for example. The LIM will also detail any permits, consents or notices that have been issued relating to the property. You may love that woodburner that will heat the house while saving money on heating, but you need to check whether it was correctly installed with Council consent. If it was installed without consent, your home insurance might be void if the woodburner causes a fire.
It can also be helpful to see where the street water pipes and sewerage run particularly if you plan on subdividing or doing any renovations to the property.
Understanding your property and its future before buying
The LIM will also point out the zoning of the property, which will indicate what you can do with the property and any proposed uses of the land around the property such as future roads. You may be buying the property intending to use it in a certain way, but the Council might have other ideas! If the Council intends to perform works in the area such as road widening or strengthening, this might have an adverse effect on the future value of the property.
Risks of going without a LIM before your buy a home
The consequences of not obtaining a LIM could be significant. If there are structures on the property that are not consented such as garages, carports or conservatories the Council may require you to obtain retrospective consents for these or possibly even demolish them.
Your lender may also require you to get a LIM before you get your hands on the money. Your loan repayments might increase if the Lender sees that you will have to pay for repairs or maintenance because of any problems the LIM reveals.
First Home Buyers – A LIM is a worthwhile investment
In most cases there should be little in the LIM to cause you concern about the property. However, if there are problems and you have are buying your property that is subject to a satisfactory LIM you can request the seller to fix the unsatisfactory aspects or face possible cancellation of the contract.
Compared to the potential risk of hidden problems, the cost of obtaining a LIM is minor. In a sense a LIM report is similar to an insurance policy. Before you sign an Agreement talk to us about what conditions should be included in your Agreement.
