When the property market is hot it is easy to rush into purchasing decisions without due care.  It is so important to check things out thoroughly before you commit. 

The following checklist includes key issues to consider.

• Title - There may be restrictions, easements that affect your use or enjoyment of the property or covenants preventing certain buildings being erected on the land. There may be a right of way on the property; who shares it and who has to maintain it?

• Zoning – You need to check that you can use the property for the purpose you intend.  There are many potential constraints, including a heritage restriction or a residential zoning when you have a commercial use in mind.  Obtaining council consent to overcome non compliance can be a long and complex process.

• Lim - This is a land information memorandum obtained from the council containing information on rates, zoning, soil erosion, flooding, contamination, drainage and consents.  It is based only on records the council actually holds on their file and can take 10-15 working days to obtain. A separate check may need to be made of records held by the regional council.

• Building Report - This is undertaken by a qualified builder who views the property and itemises each part of the house from what can be seen visually. He/she lists un-permitted alterations/work undertaken on the property and work required eg rotten boards may need replaced, mould or cracking can be seen. He/she also checks permits/consents held by the council and details work urgently needing attention. We can also obtain a property search report from the council for a fee of $20-$60 on permits, drainage plans, floor plans, site plans, plumbing etc.

Permits/consents are important to check especially if a fire burner has been installed without consent if after 1992. This is illegal and can cause your insurance to be invalidated if the burner causes a fire.

• Engineers Report - Obtain this if you think there may be structural building issues.

• Boundaries - These may need to be checked. We can obtain an aerial search of a Dunedin property as an indication only of the boundaries. Any further enquiries should be made by employing a surveyor to identify the boundaries accurately.

• Valuation Report  - This provides an independent assessment of the market value of the property and may also be required for mortgage finance and insurance.

• Ownership - There are many different types of ownership including joint ownership, tenants in common, company, trust or partnership structures.  It is important to ensure the property is owned by the entity that best meets your objectives (which may including tax and asset protection planning).

• GST Issues - Is the contract plus GST or inclusive of GST?

• Finance - Have you met all the pre-conditions of the loan and obtained confirmation of finance before signing a contract unconditionally? Make sure you have calculated your sums correctly. Have you included rates apportionments and up-front mortgage fees?  If you need to obtain finance we can source the best deal available in the market at no cost to you.

• Conditional Contract - This means the contract is subject to certain conditions.  This can be a useful means of securing the property while you obtain finance or satisfy yourself about aspects of the property (through say a LIM report or a Property Search report).  It is important that any special conditions be recorded in writing – for example, that the seller will complete the painting of the third bedroom before settlement.  Remember, once the conditions are met you are bound by the contract, and the contract becomes unconditional. 

• Chattels - Make sure that all fixtures, fittings and appliances that you understand are being purchased with the house are listed in the contract.  Otherwise you may find that those light fittings or curtains aren’t there when you move in.

Buying a house is likely to be the biggest investment of your life, and there are many pitfalls.   Always seek advice from your lawyer or qualified legal executive before signing any agreement for sale or purchase. A brief consultation can save you a lot of heartache down the track.