Understanding LIM reports and builder’s reports

You’ve found a property you love, and you can already picture yourself living there. This is the exciting part, but it’s also the time for one of the most important steps in the buying process: due diligence. This means doing your homework to uncover any potential issues before you commit.

Two of the most powerful tools you have for this are the Land Information Memorandum (LIM) and the pre-purchase builder’s report. Together, they give you a comprehensive picture of the property, protecting your investment and giving you the confidence to make a great decision.

What is a Land Information Memorandum (LIM) report?

A LIM report is an official summary of all the information the local council holds on a specific property. It’s a legal document that provides a snapshot of the property’s history and any rules or restrictions that apply to it. Think of it as the property’s official record.

What a LIM report tells you

A LIM report is essential for understanding the legal and regulatory status of a property. It typically includes:

• Special land features: Information on any known hazards like flooding, erosion, slippage, or potential soil contamination.
• Drainage and water services: Details on the public stormwater and sewerage drains on the property.
• Rates information: The current rates being charged and any outstanding amounts.
• Building and resource consents: A list of all consents issued for the property, which tells you if work like extensions, renovations, or new structures were officially approved and signed off.
• Zoning information: The property’s zoning under the District Plan, which determines how the land can be used and what you can build on it in the future.
• Any notices or orders: Information about any legal notices or requirements that affect the property.

Getting a LIM is a crucial step. It helps ensure there are no unconsented works or hidden hazards, and it’s often a requirement for getting your mortgage approved by the bank.

What is a pre-purchase builder’s report?

While a LIM report covers the legal history, a builder’s report assesses the physical health of the property. It’s a top-to-bottom visual inspection conducted by a qualified, independent building inspector who identifies any existing or potential problems.

What a builder’s report covers

A good building report is incredibly detailed and will give you a clear understanding of the home’s condition. The inspector will check:

• The structure: The condition of the foundations, subfloor, walls, and roof framing.
• The exterior: The type and condition of the cladding, windows, doors, gutters, and roof.
• The interior: The general condition of walls, ceilings, and floors, looking for signs of movement or damage.
• Moisture testing: A non-invasive moisture meter is used to check for high moisture levels in high-risk areas, such as around windows and in bathrooms and kitchens.
• Key systems: A visual check of the plumbing and electrical systems for any obvious defects or safety concerns.
• The site: The condition of fences, decks, retaining walls, and drainage around the property.

The report will highlight any areas that need maintenance or repair, giving you a clear idea of what work might be required. It’s a small investment that can save you from tens of thousands in unexpected repair costs down the line.

How to use these reports to your advantage

Receiving these reports can feel overwhelming, as their job is to find every potential issue. The key is to use the information to empower your decision-making.

• Proceed with confidence: If the reports come back clear, you can move forward with your offer knowing you’ve done your homework.
• Negotiate with the seller: If the reports uncover issues that aren’t deal-breakers, you can use the information to negotiate a lower price or ask the seller to fix the problems before settlement.
• Walk away if you need to: If the reports reveal major structural problems or unconsented work that you’re not prepared to take on, you have the information you need to walk away from the purchase, saving you significant stress and expense.

Always get your own independent reports rather than relying on ones provided by the seller. This ensures the advice is impartial and prepared just for you. By investing in due diligence, you’re not just buying a house—you’re making a smart, informed investment in your future.