More to LIM reports than just checking for a CCC

When purchasing a new build or a property ‘off the plans’ it is still vitally important to obtain a LIM Report even if you have been or will be provided with a copy of the Code Compliance Certificate. LIM Reports include a wide range of other important property information besides building consent matters. The scenario below is a fictional example to demonstrate issues that can arise when a Land Use Consent has not been closed off.

Mereana entered into an agreement to buy a newly completed two storey dwelling from a developer named Jim. Jim was friendly and helpful enough to supply Mereana with a copy of the Code Compliance Certificate (CCC) for the dwelling.Mereana decided she didn’t need to get a Council LIM report because she had a copy of the CCC and she didn’t want to waste money on the cost of a LIM report despite advice from her lawyer to the contrary.

Unfortunately not long after purchasing the property, Mereana was injured in an accident which meant she could no longer manage the stairs at the property. Mereana decided to sell the property and buy a smaller single level property.

Mereana entered into an agreement to sell the property to John and Kiri. John and Kiri obtained a LIM report for the property.The LIM report noted the details of the building consent and CCC, there were no areas noted as being susceptible to any hazards and no concerning land features recorded however there was a Land Use Consent which noted that ‘construction monitoring’ was underway.

A Land Use Consent is a type of resource consent issued pursuant to the Resource Management Act 1991 which is required by Councils for activities such as construction, vegetation removal or changes in land use.

A CCC is issued pursuant to the Building Act 2004 when the requirements of the building consent are met.

Issue of the CCC by Council does not mean that the Land Use Consent has also been complied with as these are separate processes each governed by different legislation.

John and Kiri’s lawyer made enquiries with Council about the Land Use Consent. It transpired that the Land Use Consent had a number of specific requirements that had not been complied with, such as:

• Restrictions on impervious areas;
• Landscaping requirements; and
• Fencing requirements.

The restrictions on impervious areas was a particularly serious problem as the developer had, at Mereana’s request, concreted a large parking area and outdoor living area, which would now need to be removed. The extent of impervious areas has significant importance in terms of Council’s management of stormwater, mitigating risks of flooding and contamination of nearby streams. In addition the fencing was supposed to be lower and substantial additional planting was required.

John and Kiri decided to cancel the agreement, they did not wish to be tasked with meeting Council’s requirements and they had been attracted to the property because of some of the features which they now discovered were in breach of the Land Use Consent.

Mereana was disappointed at losing the sale however she remembered that the developer, Jim, was very helpful and he had obtained the Land Use Consent, so surely Jim would have to fix these issues. Unfortunately for Mereana, a Land Use Consent runs with the land which meant that as the new owner Mereana was now responsible for complying with Council’s requirements. Jim did not respond to Mereana’s calls or emails. Mereana was made aware that if she didn’t comply, she risked enforcement action and penalties from Council.

However as a result of Mereana’s accident she hadn’t been able to earn her usual income and she couldn’t come up with the funds necessary to complete the works. The outstanding Land Use Consent requirements impacted her ability to attract purchasers and she couldn’t achieve the price she wanted.

Mereana’s situation highlights the importance of obtaining a LIM Report in all situations including if the property is a new-build or an ‘off the plans’ purchase or even bare land. A small investment in a LIM Report and thorough legal advice when purchasing can safeguard against unwelcome and costly surprises in the future.

This feature was submitted by Deanne Taylor from Davenports Law