In a recent case, the vendors selling a leaky property decided to falsify a LIM report by removing reference to the property’s moisture-related cladding defects. They sent the falsified LIM report to their real estate agent which was then displayed on the agent’s website.

The purchasers of the property were unaware of the defects until they came to sell the property four years later, discovering the truth when they ordered a new LIM report directly from the Council.

The purchasers stated that they would not have purchased the property if they had seen the original LIM report. They sold the property for $25,000 less than the purchase price.  However if the property had not had these issues, it was expected that it would have been able to be sold for up to $335,000 more.

The matter is still before the Courts so it is not yet known what legal remedies the Court will order.

To avoid situations like this, we always advise purchasers to order a copy of the LIM report themselves directly from the Council, and avoid relying on a report supplied by the vendor. This is important, as a contractual relationship forms between the Council and the purchaser when the purchaser obtains their own LIM report, and the Council can be held liable for any inaccuracies within it.  Where the LIM report is obtained by the vendor or the agent, the Council does not owe any obligation to the purchaser.

It is vital to take legal advice when purchasing a property, to ensure you don’t get caught out and are aware of the risks.

Laurie Pallett