Buying? How to find out about any issues with the land, property or neighbouring properties.

Date: 27 July 2017

“Neieeeeeighbours. Everybody needs good neeeiggghbours”…so says the catchy TV theme song. Very true. Also very true? The legal term ‘caveat emptor’ (or ‘buyer beware’ in non-legal speak). 
All good in theory, but how do you actually know whether there are any issues with the neighbouring properties, or indeed the land and property you’re interested in? 
1. Ask the Agent
When it comes to the property you’re considering, your first and most obvious port of call (but certainly not your last) should be the agent managing the sale. Ask them outright if there’s anything you should be aware of. For example: 
  • “What’s the plumbing like?” 
  • “What’s the wiring like?” 
  • “Any previous weather-tightness concerns?” 
  • And something dominating headlines currently: “Have there been any possible P contamination concerns?” 
Always be proactive and specific in your requests but don’t expect the agent to automatically have all the relevant information. 
The Real Estate Agents Authority (REAA) polices the real estate industry in New Zealand. According to its rules, real estate agents cannot withhold any information they know when asked about a property. They are not allowed to make statements about a property that cannot be backed up with evidence.
“Remember that the real estate salesperson represents the seller,” says REAA chief executive Kevin Lampen-Smith. “He or she will tell you a lot about the property and will answer any questions, but a prospective buyer should do their own research as well.”
So, on to that research then… 
2. Do a title search 
A  title search provides all the records about the property as held by Land Information New Zealand (LINZ). These records will include who the legal owner is, the legal description and any rights or restrictions against the property title, including easements that affect access. 
The agent selling the property may have a copy of the title. If they have noticed any restrictions, they must pass this information on to potential buyers.  The REAA recommends seeking advice from a lawyer when looking at a certificate of title as it can be daunting to understand the language involved.
How to do a title search? You can get one right here! Our Certificate of Title Report is available when you search an address.
3. Get a building report
Building reports do come at a cost, but can be a great source of information with regards to the condition of a property. They’re often made available by agents and vendors prior to a sale. But it pays to understand how and why such reports are written when evaluating their conclusions.
“You have a range of choices when it comes to getting a building report, from enlisting a builder mate to using a qualified and insured inspector,” advises REAA chief executive Kevin Lampen-Smith. 
“You can also make an inspection a condition of your offer on a property. If you choose this option, the report must be prepared by a suitably qualified building inspector in accordance with accepted principles and methods. If you then use the report’s findings to get out of the contract, you must provide the seller with a copy of it. Either way, the more you invest in this exercise the safer you will be if things don’t turn out as you had expected.” 
The property pre-purchase inspection industry is not regulated in New Zealand, however the REAA recommends using a qualified building inspector who has professional indemnity insurance, understands the strict legal requirements of their role and carries out their work in accordance with the New Zealand Property Inspection Standard. This is important because they will help protect you if something goes wrong later on. If you discover problems with the property that should have been evident in a building inspection, you can make a complaint to the professional body that the inspector belongs to and seek compensation through the courts.
Reports are done to protect the person who’s done the report, so knowing how to read one is really important. They’re always written from the worst-case scenario using interpretive words like ‘adequate’ and ‘inadequate’. But what do they really mean? If something’s ‘adequate’, for example, it’s probably actually pretty good. It’s important to understand that no building is perfect and that ultimately, you’ll still have to rely on your own knowledge and determinations to make a decision.
The REAA advises that it’s a “good idea to select a property inspector and/or engineer at an early stage of your home buying process so you are ready to arrange an inspection when you find a property you want to buy. We recommend you choose a property inspector who has professional indemnity insurance and carries out their work in accordance with the New Zealand Property Inspection Standards”.
To find a building inspector who conforms to this standard, visit the Building Officials Institute of New Zealand website and the New Zealand Institute of Building Surveyors website. Inspectors not listed on those websites may still conform to the New Zealand Standard.
4. Get a professional in
After you’ve got the building report, if you’ve got a friend who’s a builder, carpenter or plumber, now’s the time to offer them a case of craft beer in return for a walk-through. Alternatively, paying for the relevant building professionals to give a place a detailed once-over is a smart investment.
Getting them to walk through the property with you and actually give you a real assessment of what’s involved in making any necessary improvements or repairs is a great idea. Building reports often over-estimate the cost of repairs, so getting a professional opinion on what costs are actually likely to be is sensible. Even if you have to pay for that advice, it’s something that enables you to take a real view of the situation.
5. Ask your Council
Councils can be an invaluable tool for finding any issues that may seriously impact the future value or liveability of the property you’re considering.
For example: Is there a subdivision approval on the house next door or the one at the back? You could also check with the Council about any re-zoning plans that may be under consideration and could potentially impact the neighbourhood. Don’t just rely on the agent to deliver all the information you need. It always pays to do your own research.
6. Invest in a LIM Report. 
Before you place an offer on a property, you should get a “Land Information Memorandum” (LIM). This is a comprehensive report provided by the local Council with all important current and historical information that the Council knows about the property, including: 
  • Potential erosion, subsidence or slippage, flooding of any type, and possible presence of hazardous substances.
  • Information on private and public storm water and sewerage drains.
  • Rates information.
  • Any consents, notices, orders or requisitions affecting the land or buildings.
  • District Plan classifications relating to the land or buildings.
  • Any other classifications that relate to the land or buildings.
  • Any other classifications on the land or buildings notified to the Council by network utility operators in relation to the Building Act 2004.
You can get the most up to date LIM direct from your local Council or through your lawyer. They do cost and before investing in one, you could purchase a Property Changes Report, designed to identify any extensive renovations and subdivisions, by tracking changes to floor and land area as well as changes to value since 1991. 
If you have any questions over recent renovations or additions on a property, we also offer a Building Consents Report which provides information on what has been approved since 2010.
That’s your homework for today then! 
Don’t forget to check out our handy checklist for when buying a home, plus the REAA has a free downloadable guide to buying a home at

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