Due diligence: checking before you commit

Due diligence (DD) is the investigation you do to confirm a property is what it appears to be — physically, legally and financially. A common sequence is to secure the property under a conditional contract first (so no one else can swoop), then investigate thoroughly within a defined due-diligence period, with the right to withdraw if something doesn't check out.

Work to a checklist so nothing slips through. A solid DD checklist covers: a title search (ownership, easements, caveats), a registered valuation, a builder's report, the LIM and council building file, the Code Compliance Certificate for any work, verification of any tenancies and rent, a chattels list with a PPSR search (so chattels aren't secured to someone else's loan), and confirmation you can actually get insurance.

With older NZ homes, two enemies cause most of the expensive surprises: movement (foundations, subsidence, cracking) and moisture (leaks, rot, damp). Train your eye for both, and price the risk in before you fall in love.

Some era-specific NZ knowledge pays off. Roofing changed around the 1960s (older short-run iron vs newer long-run profiles). Old electrical wiring in pre-1940s homes may need rewiring for insurance. Dux Quest plumbing (roughly 1970s–early 90s) becomes brittle and leaks — insurers often want it replaced. And the monolithic-cladding 'leaky homes' era (around the 1990s) is the big one: poorly detailed plaster-style cladding that lets water in, sometimes catastrophically.

You can roughly date a house from clues like the hot-water-cylinder stamp, the cladding and joinery, and the roof profile — useful for guessing which era-risks to check. None of this replaces a professional inspection; it just tells you what to look for and what to ask.

The title tells you what you're actually buying. Fee simple (freehold) is the most straightforward. Unit title (apartments) and cross-lease (common in NZ) come with shared rights and obligations — cross-leases in particular are prone to defects when past owners altered footprints without updating the plan. Leasehold means you don't own the land. Check too for easements, rights of way and caveats registered against the title.

On the building side, the dividing line is roughly 1991: older work had a council permit, newer work needs a building consent and a Code Compliance Certificate (CCC). Unconsented work — a sleep-out, a deck, a removed wall — is a real problem: it can affect insurance, lending and your ability to sell. Sometimes it can be regularised with a Certificate of Acceptance from the council, but not always, and not for free.

Finally, check zoning and site coverage if you have any plans for the property — what you're allowed to build, how much of the site you can cover, and height limits all live in the district plan and can make or break an idea.

A LIM (Land Information Memorandum) is the council's summary of what it knows about a property — consents, drainage, zoning, hazards (flooding, erosion), rates and notices. It's valuable, but not exhaustive or always accurate, so treat it as one input rather than the final word.

A builder's report from a licensed building practitioner is your eyes on the physical condition — structure, weathertightness, moisture readings, and the defects that matter. For older or plaster-clad homes, consider a weathertightness assessment and check the leaky-homes register. For ex-rentals, a meth/contamination test is cheap insurance against a problem that can be very expensive to remediate and a liability you don't want to inherit.