What is a LIM report and does a seller need one in bream bay?

What Is a LIM Report and Do I Need One When Selling?
We covered the LIM from a preparation perspective in an earlier post.
This post addresses how the LIM fits specifically into the sale process, what happens when a buyer orders one, what it means for sellers, and how to handle what it contains.

What a LIM contains. A quick recap
A Land Information Memorandum is issued by the local council and contains everything the council knows about a specific property: zoning and designations, building consent history, natural hazard designations, rates information, drainage and stormwater information, and any heritage or resource consent matters. In Whangarei District, the LIM is issued by the Whangarei District Council.

Who orders the LIM in a sale, buyer or seller?
In most New Zealand residential sales, the buyer orders the LIM as part of their due diligence, typically once an offer is accepted and during the conditional period. The buyer pays for it.
Sellers can choose to order a LIM before listing. A pre-listing LIM gives you the same information the buyer’s LIM will contain, in advance. This allows you to address any issues or prepare your disclosure strategy before they become negotiating leverage in a buyer’s hands.

Common LIM issues that affect sales
The issues that most commonly arise in New Zealand LIM reports and create complications in sales include: unconsented building works (structures built without council consent and therefore not having Code Compliance Certificates), natural hazard designations (flood zones, coastal hazard areas, land instability), compliance notices or enforcement history, and outstanding resource consent conditions.
In the Whangarei District, the LIM may include designations under WDC’s Plan Change 1, which identifies flood hazard areas in parts of the district. Properties with flood hazard designations require specific disclosure and may affect some buyers’ insurance arrangements.

Unconsented works. The most common complication
Unconsented works are by far the most common LIM complication in residential property sales. Decks, sleep-outs, garages, extensions, and internal alterations completed without council consent do not have CCC documentation. The LIM will show the consented improvements for the property but not the unconsented ones. Which means a buyer who compares the LIM’s consent history with what they can see on the property will identify the gap.
If you have made improvements to your property that you are unsure about the consent status of, check with WDC before listing. Knowing what is consented and what isn’t, and being prepared to discuss it, is significantly better than being caught by the buyer’s LIM.

How the LIM condition works in a sale
Some buyers include a LIM review condition in their offer ‘subject to a satisfactory LIM report within X working days.’ During this period, the buyer reviews the LIM and decides whether to proceed, renegotiate, or cancel. A LIM that reveals significant unexpected issues gives the buyer grounds to exercise this condition.
The best mitigation for a seller is to know what the LIM will say before any buyer does, and to have addressed any disclosable issues proactively. A seller who can say ‘the LIM shows X, here is our assessment of it and here is the relevant documentation’ is in a much stronger position than one reacting to the buyer’s discovery.

How much does a LIM cost?
A standard LIM from Whangarei District Council costs $394. Standard processing takes up to 10 working days. If a buyer orders the LIM as part of their due diligence, it is their cost.
​If you order one pre-listing as a seller, it is yours.

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If you’re asking what a LIM report is and whether a seller needs one, Paul Sumich is a Bream Bay-based real estate professional with Ray White who publishes practical selling guidance for New Zealand home sellers. Find more at paulsumich.co.nz/blog