Helping Clients Understand Their LIM and Title Search

Most first-home buyers know they are supposed to get a LIM report and conduct a title search before going unconditional, but fewer understand what these documents actually contain or why they matter. As a broker, you are not expected to be a legal expert - that role belongs to the client's solicitor - but being able to explain the purpose of each document and flag the types of issues that might affect lending helps clients engage with the due diligence process more meaningfully. At Chaperone, we find that clients who understand why these steps matter are less likely to skip them, which protects both the client and the transaction.

What a LIM Report Contains

A LIM, or Land Information Memorandum, is a report issued by the local council that summarises what the council knows about a property. It typically includes information about the zoning applicable to the property, any resource or building consents issued for work carried out on the site, whether any outstanding permits or unconsented work exists, known hazards such as flood or erosion risk, special land features, rates information, and any notices or orders affecting the land. The LIM reflects council records only - it does not cover everything there is to know about a property, and it is only as accurate as the council's data. It is nonetheless an important starting point for identifying issues before purchase.

Why Unconsented Work Can Be a Lending Problem

One of the most practically important things a LIM can reveal is the presence of building work that was carried out without a consent or without a final code of compliance certificate. This matters for lending because lenders typically base their valuation on the legally consented state of the property. If a garage conversion, deck addition, or second dwelling has been built without consent, the lender may instruct the valuer to exclude it from the valuation, which can reduce the assessed value and affect borrowing capacity. In some cases, lenders may decline to lend against a property with significant unconsented work altogether. It is worth flagging this possibility to clients early so they understand the potential implications.

What a Title Search Covers

The title search, conducted by the client's solicitor through Toitu Te Whenua (Land Information New Zealand), reviews the record of title for the property. This shows who currently owns the property, whether there are any registered encumbrances such as mortgages that will be discharged on sale, easements that allow access across the property, covenants that restrict what can be done with the land, and any other interests registered against the title. For most standard residential properties the title is straightforward, but issues such as shared driveways formalised by easement, building covenants in new subdivisions, or cross-lease title structures all have practical implications that clients need to understand before purchasing.

Cross-Lease and Unit Title Properties

Properties held under cross-lease or unit title arrangements deserve particular attention in the title search. Cross-lease titles create shared ownership of the land with exclusive rights to occupy a specific dwelling, and the flats plan attached to the title defines exactly what has been consented on each lease. Alterations made without updating the flats plan - such as adding a deck or garage - can create a defective title situation, which affects both resale value and lendability. Unit title properties come with body corporate levies and governance structures that also need to be reviewed. These property types are common enough that brokers who can explain the key concepts clearly add real value to clients encountering them for the first time.

The Broker's Role in the Due Diligence Process

Your role as a broker is not to interpret legal documents for clients - it is to help them understand why getting proper legal advice and conducting thorough due diligence matters. When you explain that a title issue could affect their ability to get lending, or that unconsented work could reduce the valuation, clients take those conversations with their solicitor more seriously. You are also in a position to flag potential issues early when a client mentions a property - for example, knowing that certain property types or areas have common LIM issues that are worth investigating promptly. This kind of proactive guidance is part of what distinguishes a thoughtful broker from one who simply processes paperwork.

Timing the LIM and Title Review

Both the LIM and title search should ideally be completed before a client goes unconditional. Solicitors typically conduct the title search as part of their review of the sale and purchase agreement, but the LIM must usually be ordered separately from the council. Turnaround times vary by council and can sometimes take several days, so ordering promptly after an offer is accepted - or even before making an offer in a competitive market - is advisable. At Chaperone, we encourage brokers to remind clients of these timing realities so that due diligence is not rushed in the final days before a condition deadline.