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Information Memorandum- What You Need to Know
An information memorandum is something that can be issued upon request and may contain data valuable during due diligence as you decide to purchase a piece of property or negotiate a business or property buy. Information memorandums actually come in two varieties: the Project Information Memorandum (or PIM) and the Land Information Memorandum (LIM).
What can you expect in an information memorandum?
The information recorded in an information memorandum depends on whether it's a project-specific or land-specific memorandum. A Project Information Memorandum documents data relating to a specific project on certain land. The type of data you might find in the PIM includes:
- Whether hazardous contaminants might be located on or near the property
- Where the government has determined an evacuation scheme is necessary
- Storm water and waste water management details
- Whether the land contains subsidence, slippage, falling debris or erosion
- Flood risks associated with the property and project
- Notifications or reasons that building work could not take place
- Confirmations or authorisations for any previous projects or future potential building on the land.
The Land Information Memorandum is a bit broader in scope, as it should contain all the information the council has regarding the land; not just the information related to a specific project. A LIM might contain any of the following information:
- A description of the features that are on the land
- A history of land use approvals and grants or any past restrictions on the land
- Annual rate information or any delinquencies associated with the property
- Private and public drains if they have been made known to the council
- Plans and drawings associated with any buildings on the property or any proposed buildings
- Approvals for septic tanks or disposal of septic tanks
- Any potential contamination
- Permits or certificates issued related to the land or building upon it
- Any past licenses for businesses located on the property, including businesses such as retail establishments, food service, or hair and beauty
- Whether or not the land or buildings have been designated a historic site by any government agency.
Note that a LIM won't necessarily cover all the restrictions on a piece of property. You can't rely solely on the LIM for due diligence when buying property or land, especially for commercial use.
How do you order a PIM or LIM?
You can apply for a PIM or LIM by completing an application with the council in question. Ensure that you use the correct application form (if you aren't working with a broker or other professional who can assist with this step, reach out to the Council to double check you have the right paperwork). If you are applying for a PIM, enclose any specifications, plans or information as instructed by your council. Failure to attach the appropriate information could result in a delay or denial in the PIM. The council provides checklists that you can use to ensure you completed your application fully.
Councils can't 100 per cent guarantee that the information in a PIM or LIM is complete and accurate. Use these documents as a starting point during your due diligence or research, not as a final word on the land in question.
For further information about this article, contact your nearest LINK Business Broking office at: