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December 2007

Another Risk when not getting a LIM

Councils must notify of claims for “leaky homes”

An important issue, that purchasers of real estate should be aware of, has arisen since the passing of the Weathertight Homes Resolution Act 2006 (“the Act”).

By way of background, the current owner of a “leaky home” has the option to lodge a claim (“the claim”) with the Weathertight Homes Service (“the Service”) to resolve the weathertightness issues with the property.
Prior to the Act Councils (where they are aware of a claim) had a discretion to note a weathertightness claim on the relevant Territorial Authority’s Land Information Memorandum (“LIM”), but there was no requirement for them to do so.

However, the Act now requires the Service to give notice to Territorial Authorities that the claim has been made. Amendments to the Local Government Official Information and Meetings Act 1987 require territorial authorities to place such Notices on a LIM. This was intended to reduce the imbalance of information on the weathertightness of homes that exists between purchasers and sellers. However, if an owner wishes to avoid this outcome it can simply bring the claim in Court and nothing is noted on the LIM.

This raises two potentially important issues for purchasers of properties:-

1. Purchasers should obtain a LIM report, as it may disclose that a claim has been made to the Service. This will alert the purchaser that a leaky home issue exists concerning the property, when they may not have been aware of this before.

2. If a purchaser proceeds to purchase and doesn’t obtain a LIM, and it is subsequently revealed that a claim was noted on the LIM, this could impact on any later claim made by the purchaser to resolve any leaky home issues that arise. This is for two reasons:-

  • The other parties to the claim may raise the issue of contributory negligence on the part of a purchaser in not properly checking out the issue before purchasing.
  • The Act states that if ownership of a property changes, then any claim to the Service is automatically terminated. This may result in the new owner being unable to bring a new claim to the Service (or in Court) because of the complicated limitation issues that arise.

Don’t risk it. When purchasing a property, always obtain a LIM report.