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The importance of due diligence

When you're buying a home, it’s important to undertake a thorough due diligence process.

If you’re looking to buy in an area affected by a natural disaster it is recommended that you take extra steps to find out about the condition of the home you’re going to purchase and to identify risks and issues.

To start, ask the seller or agent for any documents which outline previous natural disaster damage claims, settlements and repairs.

Make sure you consider any information about the property that you receive from EQC alongside all other information you have collected that is relevant to the property. Not all problems are due to natural disasters — a house can have problems due to its design or maintenance, and houses also suffer from wear and tear over time.

Obtaining good advice is important when thinking about buying a property. A lawyer or conveyancer can help you obtain the information you need and understand what it means. In particular, any issues, hazards and risks the property may have now and in the future. You should also discuss your plans to purchase the property with your bank (especially if finance is required) and your private insurer.

Some common types of information collected when checking a property include searching the Record of Title and requesting a land information memorandum (LIM report) and the property file from the Council. A pre-purchase property inspection from a Licenced Building Practitioner will also help identify any issues or risks with a property and sometimes indicate further investigations to consider when making your decision, for example: structural or geotechnical engineering reports, or advice from experts about the electrical, drainage or plumbing elements of the property.

If you’re interested in purchasing a home in the Canterbury region, it’s particularly important that you pay extra attention to the aspects of the home that may have outstanding damage from the Canterbury earthquake sequence.

We recommend that you ask the vendor for any information about insurance or EQC claims for natural disaster damage to the property. This should include any reports they have obtained and receipts and consenting documents for any repairs that they have done. These can be given to your Licenced Building Practitioner who is undertaking your pre-purchase inspection.

An example of the type of damage you may wish to ask the vendor about is damage to sewerage or stormwater drains. This can take years to manifest, but is a widespread issue in the Canterbury region.

If you’re buying a home and want to find out if there has been an EQC claim for land or building damage from the Canterbury earthquake sequence, head to Property Search(external link). Click onto the Property Search section and use the address to find if there are any EQC claims listed.

Learn more about the due diligence process when buying a home on the settled.govt.nz(external link) website.

You can also read about getting help to assess risks in an area affected by earthquakes, floods or other natural disasters when buying a house, on the Consumer Protection(external link) website.

Our Home Buyers Guide [PDF, 1.4 MB] provides you with the top things to check in a home that will help reduce the impacts of a disaster.