The current processing time for Lims issued by Wellington City Council is 28 working days. Photo / RNZ, Reece Baker
By Anya Fielding of RNZ
House sales are being delayed by a backlog of property reports issued by Wellington City Council.
The current average processing time for Land Information Memorandums (Lims) is 28 working days – almost triple the timeframe in which the council legally must issue them.
Lims are reports which include all the information the council has about a property, such as rates and special land features.
Lims are not mandatory for a house sale but are highly recommended for sellers and buyers and most banks will not lend without seeing a Lim.
Lowe & Co real estate agency co-founder Craig Lowe said these were the worst delays in his 26-year career.
“At least in my memory, I can’t remember it being this bad.”
He said delays in receiving Lims caused frustration and uncertainty, causing more pain for people during the sales process.
He said buyers may have to have more additional conditions on the sale, or not go through to contract because they have not seen the Lim yet.
“To actually transact, buyers and sellers need information.
“It just adds friction to the process and slows things down and makes it particularly hard for sellers that have a reason to get on the market quickly.”
Alexia Stoddart from Tommy’s Real Estate has had a client lose out on their dream home because of the delays.
“Their dream property popped up on the market, and they couldn’t be unconditional as the Lim hadn’t come through. I think it was on day 20 [of waiting for the Lim]. So they offered, but with a finance clause waiting for that Lim.
“And those vendors took a lower offer, but an unconditional offer.”
Stoddart said the backlog was delaying house sales as sellers may not know they need a Lim to put their house on the market.
“Well, it basically puts you in a five-week limbo while you wait for that Lim, because people who bring their properties to market don’t always know that the Lim is required and that there is this delay.
“So they might suddenly want to come on the market next week. We may get them an offer in week two, but we have to sit for another sort of four weeks waiting for the Lim to arrive, because generally banks will not lend unless they cite the Lim.”
She said there was little agents could do while waiting for Lims.
The fast-track service has been put on hold while the council works through the backlog.
Backlogs over the summer are expected, as more houses come on sale during this time, causing higher demand for Lims.
“We generally run between sort of 750 and 800 homes in the Wellington region, and we’re up at around about 1100 at the moment. So there is an increase in properties on the market,” Stoddart said.
“We have had that spike before, though, and we still managed to get our Lims. It certainly hasn’t been as long as it is now.”
Wellington City Council said demand continued to be high into February and March, which had not been planned for.
“This week we have seen a reduction in the number applied for which indicates the first sign of a slowdown in the seasonal demand,” a council spokesperson said.
To work through the backlog the council has hired more staff, increased hours and was looking into automating the Lim process.
Wellington City Council charges $563.50 for a Lim. This is above the charges for Auckland, Christchurch, Hamilton and Dunedin.
The council is currently processing 452 Lims.
“Council fees are set on a cost-recovery basis, rather than being linked solely to statutory processing timeframes,” a council spokesperson said.
The fees charged reflect the full cost of providing the service, including staff resources, technical assessments, specialist inputs, systems and overheads that are incurred regardless of whether a statutory timeframe is met.
“The work required to assess applications still needs to be undertaken to an appropriate standard.”