Core Practice Area

Property Due Diligence

In New Zealand real estate, the principle of **Caveat Emptor** (Let the Buyer Beware) applies. You buy the property with all its title and structural faults. A thorough pre-purchase due diligence investigation is your only legal protection.

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Let the Buyer Beware

Under NZ common law, sellers are not legally obligated to point out property defects (except for specific warranties in the ADLS contract). If you discover a leaking roof or a restrictive building covenant *after* the contract goes unconditional, you have no legal recourse.

Our Advice: Always insert a due diligence condition in your contract before signing. This grants you the legal right to pull out if checks reveal problems.

1. Land Title Audits

We pull the official Record of Title from Land Information NZ (LINZ). We check for easements, restrictive covenants, and consent notices that dictate how the section can be used.

2. Council LIM Reports

A summary of council files containing building permits, Code Compliance Certificates (CCC), zoning rules, and hazard registers (flooding, slippage, land stability).

3. Building Inspections

A physical check by a qualified building inspector to audit structural integrity, claddings, moisture levels (weather-tightness), and identify unconsented alterations.

Land Title Vetting: Easements & Covenants

1. Easement vs. Personal License

If another section has the right to run pipes or drive across your section, this is registered on your land title as an **easement**. It is critical to understand its permanent legal status:

**Registered Easement**: Runs with the land permanently. It binds all future owners. If an easement grants the neighbour driveway access, you cannot block it or cancel it without their agreement.
**Personal License**: A contract between specific people. It does not run with the land and expires when the property is sold. We check titles to verify that easements are correctly recorded and do not block potential building extensions.

2. Restrictive Land Covenants

Common in modern subdivisions. Covenants are private rules that restrict how you build or live on the section (e.g. banning relocatable homes, specifying concrete claddings only, prohibiting trade vehicles parked in driveways, or restricting subdivision rights).

3. Council Consent Notices

Consent notices are conditions imposed by the local council during the subdivision process. They might require engineered foundations due to soft soil, specify stormwater retention systems, or prohibit building in geotechnically sensitive zones.

4. Vetting the Survey Plan

We audit the official land survey plan against the physical boundary lines. If a fence or driveway encroaches on a neighbour's boundaries, or if a building sits across an easement line, you can face costly legal disputes. We identify these boundary conflicts before you are legally committed to purchase.

Unconsented Works Risk

If a building report or council LIM reveals structural alterations built without consents (such as converted garages, load-bearing wall removals, or closed-in decks), you are facing a major liability.

Banks normally refuse to advance mortgages, and insurers will not cover properties with unconsented structural changes.

Read Unconsented Works Guide >

Vetting the LIM & Building Report

Auckland Council standard LIM report processing is **10 working days** (urgent is 3 days). If you are buying a home, you must ensure the contract condition gives you enough time to receive and audit the report.

We cross-reference the council records against the physical house layout. If there are rooms or bathrooms not shown on the council's plans, they are likely unconsented additions.

If the LIM report identifies environmental hazards (such as slipping or flood plain designations), we advise you on how this affects insurance coverage and mortgage approvals.

Custom Due Diligence Clause Template

If you are purchasing a property, request the real estate agent to insert the following broad due diligence clause into the "Further Terms of Sale" section of the agreement before you sign:

SAMPLE DUE DILIGENCE CLAUSE:

"This agreement is conditional upon the purchaser carrying out a due diligence investigation of all aspects of the property (including title, LIM, building structural checks, zoning, and financial feasibility) and being satisfied in all respects within [10/15] working days from the date of this agreement. This condition is inserted for the sole benefit of the purchaser."

Benefit of this clause: Unlike standard finance or building clauses, a general due diligence clause gives you a broad right to cancel the contract for any reason if you are unsatisfied with your checks.

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Ensure your easements, covenants, and LIM disclosures are vetted by experienced property lawyers before you go unconditional. Request a quote online today.

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Due Diligence FAQs

Removing a registered easement is difficult. It requires the consent of the owner of the section that benefits from the easement. Both parties must execute a formal surrender of easement document, which is then registered with LINZ. If they refuse to sign, the easement remains on title indefinitely.

Restrictive covenants remain on title forever unless they specify an expiry date in the original covenant instrument. Some developer covenants expire after 10 to 20 years, whereas others are permanent. We review the original covenant registry documents to confirm the duration and restrictions.

Minor cosmetic defects (such as scuff marks or squeaky hinges) do not normally justify canceling a contract under the standard ADLS building report clause. However, if structural or severe moisture issues are found, you can request the seller to repair them before settlement or deduct the cost of repairs from the purchase price. If they refuse, you can cancel the contract.

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Get in touch with Quay Law to review a Sale and Purchase Agreement, audit a land title, or arrange legal settlement.