Lets talk law: Do your due diligence

Photo / File

We all know the property market in Wanganui has been booming over the past few years.

With demand outweighing supply, it is more competitive than ever to get on to the property ladder.

What this means is that the days are long gone when a potential purchaser's first offer is below the belt leaving room to negotiate.

The sense out there is that there is no time for that these days. Popular multi-offer scenarios see purchasers needing to put their best foot forward as the vendor views multiple offers at a time.

Unfortunately, this sees the necessity of LIM reports, title reviews and building reports being scratched from agreements in the hope of making an offer more appealing in this increasingly competitive market.

Due diligence is a purchaser's best friend. It is your insurance policy in ensuring your major investment and life savings are not going to be whittled away into expensive repair and maintenance issues.

To an untrained eye, a house may appear good as gold and under the current market pressure it is becoming common for people 'not to worry' about a building report, but it is not easy to see the signs.

You cannot see if the wiring needs to be re-done. You cannot see if the piles need re-doing, if the roof is leaking or building work has been done without a building consent.

A LIM report and a building report will provide you with this information and ensure the money you have invested in your new home is well spent.

It is also important to have the title checked. The title will show you where the boundaries are and, more importantly, if the buildings are within the boundaries.

It will also confirm whether any other property has the benefit of a right of way or a right to take water from your new property. Wouldn't you want to know if your neighbour has the right to share your driveway or walk across the back of your property?

Furthermore, if you are looking to purchase a bare piece of land, the title will reveal consent conditions or building restrictions which could fundamentally impact your future build.

If you leave out these conditions and sign an unconditional offer you cannot back out of the agreement if you find the problems later. Including due diligence conditions gives you time to ensure you have all the information you need before you buy.

Otherwise the issues down the track could have a big impact on your future.

Petra Allen Photo / File

Petra Allen, Solicitor at Treadwell Gordon, Whanganui