The impact of missing council files and what you can do
Are you listing an older house with missing council files and don’t know what to do? You’re not alone. This is a common problem faced by vendors with older houses in Northland, causing frustration, stress and potential cost.
Recently, I worked with a vendor who was facing this exact situation and it demonstrated to me the importance of doing your homework. We’re always told to do due diligence when it comes to buying a property, and that makes obvious sense. When you own an older property, this advice is just as useful when it comes to selling property.
Case study in missing council files
Sometimes, closing on a property deal is not as straightforward as we think and just when we least expect it, something happens out of the blue.
One of my recent vendors was selling her property which was the original home on a well-established and highly sought-after Kamo West 1989 subdivision. She’d accepted an offer that was conditional on the purchaser being satisfied with the Building and Lim reports, which is standard for most Sale & Purchase agreements.
She’d been meticulous with any work she’d had done on her property, ensuring it was all completed and documented strictly by the book, so neither of us foresaw any problems. The property flew through the building inspection and we were comfortable that everything was on track.
Then came an email from the purchaser’s solicitor that made my blood run cold.
It stated that the original permit and house plan from the early 1970’s was missing from the LIM Report. Unless my vendor could supply these documents within 5 days, the deal would fall over, leaving the vendor seriously out of pocket.
How do property files go missing?
When we went back to the Council, they told us that this problem is all too common.
Many files related to older properties in Northland went missing when Council made the change from manual hardcopy to digital. They stated that all they could do was add a note to the LIM report explaining that files from “older properties are often incomplete”.
Unfortunately for my vendor, this didn’t make any difference. Everything came back to the Sale & Purchase agreement which stated that she had to produce the two missing files – or lose the deal.
The Council did their best to help us, assisting us further by searching all the property files to the same street as the property in question, but nothing turned up.
In desperation, I contacted the surveyors who worked on the subdivision in the hope that they could shed some light on our problem. However, as the subdivision was created back in 1989, they no longer had the information on file, and we were back to square one.
Real estate forensics
By chance, I was relating the story to a colleague of mine who pointed out that, as the property had been subdivided, the address may have changed.
We put the vendor solicitor on the case, and he carried out an historic search of previous titles relating to the property. He discovered that before the subdivision, the property had been on a large farm and that the address had indeed changed.
However, when Council searched under this address, the files were still nowhere to be found.
Thinking outside the square
Luckily, the Council staff member we dealt with had the brilliant idea to search through the files of the properties either side of the vendor’s property. Sure enough, she found the missing documents – in the file of a property 4 doors down!
These documents were found late afternoon on the 4th working day, just when we had given up all hope. If we’d not found this information, it would have cost the vendor hundreds of thousands of dollars, through no fault of her own and left her with an impossible problem to rectify.
Missing council files – important takeaways
A missing council file is frustrating and stressful, but it doesn’t have to mean the end of the world. Here are 3 top tips to protect yourself if you own an older home:
- Check your LIM (Land Information Memorandum) report thoroughly. Let Council know immediately if there are any missing files. If you’re unsure of what a LIM report should contain, ask your real estate agent
- Have your real estate agent carry out a Council file check to see if there’s any missing information
- If there are any missing files, get your agent to insert a special clause in any Sale & Purchase contract that acknowledges what is missing and that the purchasers accept the contract on that basis
This experience was a huge learning curve for me and emphasised how vital carrying out thorough research is when buying or selling property.
If you have any concerns about missing Council files in your property or LIM reports, contact me today, I’m happy to assist you with friendly and accurate advice you can rely on.