The importance of a LIM report
As Farmer Freddy makes his way home for lunch, he thinks about the conversation he overheard that morning between John and Bill, the two recent additions to his farming staff.
Freddy couldn't recall John mentioning he had received legal training, but he sounded confident in the advice he was giving Bill. Perhaps Pebbles might know something, muses Freddy as he spots her car outside the house.
"Good afternoon, Dad," greets Pebbles with a great big smile. "I have some exciting news!"
"You've finally decided to quit being a lawyer to come and help out on the farm?" grins Freddy as he spots freshly prepared sandwiches on the table.
"Very funny, but no - I have put an offer on a house!" exclaims Pebbles. "The agreement is subject to finance, of course, and a couple of other conditions, but I'm feeling pretty good about it. I can finally have a place of my own."
"That's great, Pebbles, and believe it or not, quite topical," says Freddy.
"Bill, one of the new guys, has also just put an offer on a house, subject to obtaining a LIM report from the council. I'm not quite sure what the significance of a LIM is but John seems to think it's a waste of time. What are your thoughts?" asks Freddy.
"Bill would be silly not to get a LIM, Dad. I'm certainly getting one. In fact, I think the bank requires me to get one before it will approve a loan," Pebbles replies.
"But why, and what sort of information does it include?" Freddy asks.
"A LIM, or Land Information Memorandum as it is properly called, can be requested from the local authority under the Local Government Official Information and Meetings Act 1987."
It is intended to include information on the land which the Council holds in its records, including:
* any special features or characteristics of the land, i.e. the potential for erosion or the likely presence of hazardous contaminants;
* the location of stormwater and sewerage drains;
* any rates owing in relation to the land;
* any consents, certificates, notices, orders, or requisitions affecting the land or any building on the land;
* notifications under parts of the Weathertight Homes Resolution Services Act 2006;
* the use to which that land may be put, and conditions attached to that use.
"Without looking at a LIM, prospective purchasers might not know the fireplace installed by a previous owner never received the tick of approval from the council in the form of a code compliance certificate.
"They might also not be aware the swimming pool in the back yard was put in without a resource consent. Both these things would quickly become the new owner's problem after settlement, when they could have easily been addressed beforehand."
"I wonder why John was telling Bill not to get one then," says Freddy.
"I have no idea, Dad. Perhaps John was talking about bare land which was going to be under development. If that were the case, a LIM might not tell them anything they don't already know - although it could still reveal contaminated soil or filled land which may affect earthworks or constructions methods," Pebbles replies.
"The point is, Dad, a LIM provides information which may be extremely relevant to someone's decision whether or not to purchase a property.
"Based on what you've said," says Freddy. "I would tend to agree. So how does one obtain a LIM and at what cost?"
"A LIM will usually cost between $200 and- $300 if it's non-urgent and it must be produced by the council within 10 working days. Urgent LIMs tend to cost more but can be produced much more quickly, usually within three days," explains Pebbles.
"You can apply for a LIM direct from the council or, alternatively, you could ask your lawyer to obtain one on your behalf, along with a summary of the key information - they can be quite thick documents. If you're interested Dad, I can bring mine in for you to have a look at. I should be receiving it in the next day or so."
"That would be good, thanks, Pebbles. In the meantime, maybe you could chat to John and Bill in case they've been misinformed - which I suspect they may have been," suggests Freddy.
"Always here to help, Dad."
* Lawyers and legal executives from Auld Brewer Mazengarb & McEwen write fortnightly about legal topics affecting farmers. The content of this article is necessarily general and readers should seek specific advice and not rely solely on what is written here. Those who would like further information on any of the topics, please contact Auld Brewer Mazengarb & McEwen. If you want a particular topic covered, email Hayden.Mazengarb@abmm.co.nz