If you are purchasing a property you must obtain you own LIM.  It’s not new advice, but the Courts have provided another reminder why it is important.  The same goes for a PIM if you are developing/building.

The recent case of Monticello Holdings Limited v Selwyn District Council 2015 NZHC 1674 confirms that if you don’t request or pay for a LIM then Council do not owe a duty of care to you.

So relying on a LIM provided by a real estate agent provides you with free information but if it turns out the information is incomplete or inaccurate you will not have a claim against the Council in negligence.

Here a developer purchased property and relied on a LIM and PIM.  The land was contaminated.  Old Council records disclosed this but it wasn’t in the LIM.  The remediation costs were estimated at $800,000+.  The Court said if the developer had got a LIM they would likely have held the Council did owe a duty of care in negligence.  Similarly with the PIM.

However, there is also a warning about doing proper due diligence.  The Court notes that even if the developer had got the LIM/PIM themselves the lack of due diligence generally might have meant Council were not fully liable e.g. the developer did not undertake a site visit either.

So do your homework, do proper due diligence and buy your own LIM/PIM.

By Denise Marsden