The Importance of Due Diligence in Property Transactions: A Cautionary Tale

Kia ora everyone,

At Surani Associates, we often encounter situations that highlight the critical importance of due diligence in property transactions. Today, we'd like to share a recent case that serves as a valuable lesson for both first-time and experienced property buyers.

Jane and Mark's Property Journey:

1. Initial Purchase:

   • Bought a newly built property as their first home

   • Conducted minimal due diligence, assuming it unnecessary for a new build

2. Decision to Sell:

   • As their family grew, they decided to sell and buy a larger property

   • Ordered a LIM (Land Information Memorandum) and property file

3. Unexpected Discovery:

   • Their solicitor found that the developer had not signed off all resource consents

   • This left compliance issues unresolved

4. Selling Challenges:

   • Potential buyers were interested but hesitant

   • They wouldn't commit until all compliance matters were resolved

5. Surani Associates' Intervention:

   • We helped Jane and Mark clear these issues

   • Ensured all consents were signed off

   • Made sure the title and LIM were clear

6. Successful Outcome:

   • Jane and Mark successfully sold their property

   • They were able to purchase a new home for their growing family

Key Lessons:

1. Due Diligence is Always Necessary:

   • Even for new builds, thorough checks are crucial

   • Don't assume everything is in order just because a property is newly constructed

2. LIM and Property File Importance:

   • These documents can reveal crucial information about a property

   • They should be reviewed carefully before any property transaction

3. Professional Assistance is Valuable:

   • Having a skilled solicitor or conveyancer can uncover potential issues

   • Professional help in resolving these issues can be invaluable

4. Compliance Matters:

   • Unresolved compliance issues can significantly impact a property's saleability

   • Ensuring all consents are signed off is crucial for a smooth transaction

5. Preparation for Sale:

   • Before listing a property, ensure all potential issues are resolved

   • This can help avoid delays and complications during the sale process

At Surani Associates, we emphasise that due diligence in property transactions is as crucial as obtaining approval for a home loan. Our team is here to assist you throughout the process, ensuring:

• Thorough review of all property documents

• Identification and resolution of any compliance issues

• Clear communication with all parties involved

• A smooth and successful property transaction

Whether you're a first-time buyer, looking to sell, or an experienced property investor, we're here to help you navigate the complexities of property transactions in New Zealand. Don't hesitate to reach out if you need assistance or have any questions about your property journey.

Remember, a little extra care and diligence at the start can save significant time, money, and stress in the long run. Let's work together to ensure your property transactions are smooth and successful.