Why Should I Pay for a LIM?
Buying a home is the largest investment most of us will make in our lifetimes. There is no substitute for sound legal advice from an experienced conveyancing lawyer at the time of your purchase.
In post-earthquake Christchurch in particular there is no longer anything such as a "simple conveyance", if indeed there ever was such a thing! Add to that the complicated new tax laws for the taxation of property purchases and you need expert legal advice more than ever.
In this article we are going to look at why you need to obtain a Land Information Memorandum (LIM) and in particular, why are you should order and pay for it yourself.
With the great proliferation of sales by auction and deadline sale these days it is increasingly common to be provided a LIM which has been ordered by the agent on behalf of the vendor’s or by the vendor’s themselves.
The problem with this was highlighted in the recent case of Selwyn District Council v Monticello Holdings Ltd. In that case it was held that a council only owes a duty of care to the party ordering and paying for the LIM and not anyone else seeking to rely on the content of the LIM.
Furthermore, as the time lag between listing, ordering the LIM and subsequent sale can sometimes be quite long, the LIM can often be some months old by the time your lawyer looks at it. This highlights the other factor with LIM's namely, that the content is only warranted to be correct as at the date of issue.
What's more, the standard contract for sales other than by auction provides at clause 10.2 (1) (a) that the LIM has to be obtained by the purchaser at the purchasers cost.
You might well think (and it may not be unreasonable to assume in some cases) that if the time between the issue of the LIM and the sale is small that there is a little chance of anything of material importance changing in relation to the property. However there is always a chance, however small that there might have been a requisition notified or a change to the content of the LIM however slim that chance might seem.
A large number of buyers to choose to simply rely on the LIM provided but the message to be taken from this article is that if you want to be able to rely on the content of the LIM you should order and pay for it yourself.