When you’ve found the home you want to buy, there are a number of important official documents to read before you buy. We recommend you get your lawyer or conveyancer to help you understand this documentation, as it will contain important technical details.
1. Record of title
This is a legal document held by Land Information New Zealand (LINZ) showing who owns the property, what kind of ownership it is (e.g. freehold, leasehold, cross-lease), and whether any legal rights or restrictions apply to the land. Those interests could include an easement, a covenant, a mortgage or a caveat. Your lawyer or conveyancer can explain any legal obligations you may have as a result.
2. LIM report
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A LIM (Land Information Memorandum) report summarises property information held on file by different departments at your local council on the day the LIM was produced. A LIM can include information on stormwater or sewage drains, council permits and building consents, zoning details, heritage protections, any outstanding rates, special land features such as erosion or flooding and other documentation.
You can order a LIM directly through your local council (check with them about what fees and timeframes apply). Alternatively, your lawyer or conveyancer can order it on your behalf, as well as help you understand the report once you receive it.
3. Property file
A property file is another document held by your local council and should be read in addition to the LIM report. It includes things like a site plan and the original plans of the house itself, as well as permissions, building consents or resource consents that relate both to the original property and any changes since it was built.
Compare the original plans to how the property looks now to identify any alterations, and check if the required consents are recorded in the file.
4. Property inspection report
A professional pre-purchase inspection (sometimes called a building report) assesses the condition of a property and can identify significant defects and future or urgent maintenance issues, including problems caused by gradual deterioration or deferred maintenance.
We strongly recommend using an accredited property inspector who has professional indemnity insurance (so you have some protection in case of errors), understands the strict legal requirements of their role and carries out their work in accordance with the New Zealand residential property inspection standard 4306:2005.
A professional property inspection comes at a cost, but if you buy a property based on advice from someone unqualified and/or uninsured, you could end up owning some expensive problems.
Sometimes a seller may provide their own building report, but if that report fails to identify serious issues that you find after buying, you are unlikely to be protected as the property inspector’s client was the seller, not you.
5. Sale and purchase agreement
This is a legally binding contract between you and the seller which must use to purchase the property. It sets out all the details, terms and conditions of the sale. This includes things like the price, any chattels being sold with the property and any conditions you agree must be met before the sale is finalised (e.g. a satisfactory inspection report, obtaining finance, or the sale of another property).
It is essential to read and fully understand the agreement before you sign it, and your lawyer will play a critical role in providing advice on what the agreement should say.
The Real Estate Authority also produces a detailed consumer guide to the residential property sale and purchase agreement, which by law a real estate agent must give you before you sign. The guide is available in multiple languages and accessible formats like audio and large print, and can be downloaded from Settled.govt.nz.
- The Real Estate Authority is the independent government agency that regulates the conduct of real estate professionals in New Zealand. For more independent advice and guidance on the property buying and selling process, visit Settled.govt.nz. For more information on the regulation of licensed real estate professionals, visit REA.govt.nz.