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Received a “free” LIM? Know the risks!!

When purchasing a property, it’s advised a purchaser obtains a Land Information Memorandum Report (also known as a LIM Report). A LIM Report can be obtained from the local authority for a fee, and contains valuable information about the property such as soil contamination, plumbing, drainage, consents, licences, permits, rates, and zoning.

When a property is being sold at auction, the real estate agent will often obtain a LIM Report and make it available to potential buyers. While this is common practice, relying on this LIM Report rather than obtaining and paying for your own, may leave you unable to sue the Council for suffered loss should the LIM Report omit information or contain information which is incorrect.

This was seen in a recent case where the purchaser, Monticello Holdings Limited, purchased land and obtained a resource consent to subdivide it. It was soon discovered that the land purchased was once used as a dump site and the land was contaminated. Knowledge of the contamination existed in the Council’s archives but the information wasn’t readily available. Monticello sued the Council in negligence but the Court was unwilling to establish that a duty of care was owed between the Council and Monticello. After delivering its findings on other issues, the Court ruled that a Council does not hold a duty of care to the world at large in regards to its records, but a duty of care would be owed to a person who applies and pays for a LIM themselves. If Monticello had applied for and paid for a LIM Report before completing the purchase of the land and the LIM Report failed to reveal the existence of the dump, then it is likely the Council would have been found liable for the financial loss suffered by Monticello.

Don’t end up like Monticello. If you are purchasing a property and want to rely on the contents of the LIM Report, then you should apply and pay for the LIM Report yourself.

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