Buying at Auction? Get Advice Before the Hammer Falls

Arrange your own building report from an independent, suitably qualified inspector. If the agent provides a report obtained for the vendor, treat it with caution — it was commissioned by the seller, it is usually non-invasive and limited in scope, and it does not guarantee the property is free of leaks, moisture, decay or other defects.

• Weathertightness — a standard builder's report is not a full weathertightness survey. If the property has monolithic cladding or other risk features, commission a full weathertightness survey, with invasive moisture testing where appropriate (the vendor's consent is required).
• Methamphetamine — make sure the property has not been used for methamphetamine production or heavy use. Testing is inexpensive compared with decontamination.

Read our full guidance on builder's reports, leaky-building risk features and invasive testing →

Obtain a Land Information Memorandum (LIM) from the council. It covers the property's consents, permits, notices and requisitions; land features and risks such as erosion, subsidence and flooding; rates and valuation; zoning; drains; protected trees; and hazardous contaminants. Review any negative entries carefully and confirm your insurer will cover those risks.

The LIM gives no guarantee about the condition of the buildings — and it doesn't compare the council's records with what has actually been built. For that, buy the council's property file (often available online) and check:

• Every building and alteration on site matches a building consent in the file;
• Each post-1991 consent has a Code Compliance Certificate; and
• Inspections were completed and final approval given.

Pre-1991 council records are often incomplete, and unpermitted work can mean your insurer declines a claim — or that you have to remove the work at your own cost. If the records show consents without final sign-off, talk to us before you bid: at auction you cannot make this the vendor's problem afterwards.

We review the title as part of our $385 service, and we encourage you to read it too:

• Check the plan — it should clearly show the property you intend to buy. If anything doesn't match what you expect, contact us at once.
• Request the encumbrance documents — if the title is subject to covenants, easements or other interests, ask the agent for copies so they can be reviewed before you bid.
• Check the boundaries — try to locate the boundary pegs, or compare the title plan's boundary lengths with the fence lines on the ground. If in doubt, engage a registered surveyor — it's the only way to be sure no part of "your" property belongs to a neighbour.

Remember: under the auction agreement you have no right to object to the vendor's title after the hammer falls, so any title concern must be resolved — or priced in — beforehand.

• Restrictive covenants — read them carefully. Make sure they don't prevent you building or rebuilding as you intend, and don't restrict your planned use (for example, business use or short-term accommodation).
• Fencing covenants — while the developer still owns adjoining land, you may carry the fencing costs. These covenants normally expire 12 years after registration under section 6 of the Fencing Act 1978.
• Limited access roads — if the property fronts a limited access portion of a State Highway, only approved crossing points may be used. Check that the crossing currently used is authorised.
• Shared accessways — if you're buying a shared accessway property, you become a co-owner of the driveway with the same rights of passage as the other owners under section 298 of the Property Law Act 2007. Understand your rights and obligations before you commit.
• Marginal strips — if the land was once Crown land next to the coast, a lake or a larger river, a reserved strip (usually 20 metres) along the water's edge can affect what you actually own and public access.

If any of these appear on the title, we'll explain exactly what they mean for you as part of our review.

If the title includes a notice under section 36(2) of the Building Act 1991 or section 72 of the Building Act 2004, the land is affected by natural hazards. The consequences are serious:

• Insurers may refuse or limit cover for the buildings, leaving you unprotected; and
• Natural hazard (EQC-type) claims for damage to the land or buildings may be declined.

Before bidding on any property, check the Home Buyers' Guide to Natural Hazards, and search the Natural Hazards Portal (Toka Tū Ake) for previously settled claims. A settled claim doesn't automatically mean the property is unsafe — it may reflect past repairs or hazard mitigation — but you should understand the history before you bid.

Cross-lease: compare the flats plan with the building as it exists now. Additions that are attached and enclosed (such as garages or conservatories) and not shown on the plan create a title defect. Under a standard agreement you could require the vendor to fix the title — at auction you cannot, because the auction terms give you no requisition rights. If the flats plan doesn't match the building, the cost and risk of fixing the title becomes yours the moment the hammer falls. Also read the cross lease itself for use restrictions (most limit the flat to residential use and restrict pets), and check whether structural alterations had the other owners' written consent.

Unit title: check the unit plan against the unit as built, request the Body Corporate rules from the agent, and review the long-term maintenance plan and fund. Body corporate levies and deferred maintenance can be significant ongoing costs. For more, see About unit titles and body corporate →

Read our full guidance on cross-lease, unit title and leasehold properties →

• Overseas Investment Office approval — if you're not a New Zealand citizen or ordinarily resident here, check whether you need OIO consent before you bid. See our blog When is OIO approval needed to buy a home in New Zealand — and when is it not? and the LINZ homebuyer eligibility tool.
• Your intended use — confirm the district or unitary plan permits the activities you're planning, and that any future subdivision you intend is possible.
• The neighbourhood's future — check for proposed developments nearby that could block your view or sunlight, and whether Resource Management Act requirements affect the property.