Councils May be Liable for Incorrect information in LIM Reports

Posted on Monday, September 30 2013

Supreme Court Rules On Incorrect Information Regarding LIM Reports

The Supreme Court has ruled that if a Council negligently includes incorrect information in a Land Information Memorandum,and the person who bought the LIM relies on that incorrect information, the Council will be liable for any loss suffered by that person as a result.
The case involved the purchase of some land in Marlborough by a buyer who wanted to plant grapes on the land. The purchase agreement was conditional on a satsifactory LIM, and the LIM showed that the property had a certain number of water rights. After settlement, the buyer discovered that the land only had half the number of water rights that the LIM said it had. The Council had to pay part of the loss suffered by the buyer (the land agent and the vendor’s lawyers also had to pay damages for misrepresenting the number of water rights).

The case reinforces the need to make a purchase confitional on getting a satisfactory LIM – the Courts have previously said that a buyer would probably be negligent if he or she did not do so. It also shows the importance of a buyer getting their own LIM, rather than relying on a LIM given to them by the agent or the vendor. The buyers in this case may not have been successful against the Council if they had relied on a LIM provided by the agent, rather than buying their own LIM.

Mike Toepfer – Aspiring Law

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Expert's Bio

Mike Toepfer

Aspiring Law is a general practice firm, offering the best in legal services and advice to our local Upper Clutha community, as well as our national and international clients. We recently launched our new firm, after taking over AWS Legal’s Wanaka office. We’ve carefully tailored our firm’s services and culture to meet the needs of our business, and wider, community. Clients from further afield also draw on our specialist expertise, particularly advice and support around property, including large-scale developments, and agribusiness. As our clients have come to expect, the cornerstone of our new practice remains excellent, timely advice, underpinned by personalised, genuine service and support. Further to that, we’re really excited about building further on our community-based initiatives to educate and inform people on legal issues, and do our part in finding meaningful, innovative ways to support our area. Before that I was at large Auckland firm Hesketh Henry for 17 years - over 13 years as a partner and 10 years on the firm's board of management and as property team leader. I have specialised in all types of property transactions for the last 27 years.

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