Hamish’s business stopped making regular loan repayments. He told the bank it was because he was looking for new tenants. When this continued, the bank followed its standard practice of sending reminder letters. It also tried to call him numerous times.

Six months after not receiving payments or hearing from Hamish, the bank hired a debt collection firm. It sent Hamish more letters and tried to contact him. Eventually the bank sent the business a notice under the Property Law Act 2007, giving it a date by which to repay the arrears. The notice said the total amount owed under each of the three loans would be payable if the company did not clear the arrears. The notice added that the bank had the right to sell properties used as security. 

The bank tried to serve notice on Hamish personally, but couldn’t find him at any of his contact addresses. It then applied to the courts for directions on how to serve the notice. A court directed that service could be made by attaching the notice to the door of a property Hamish owned, by posting the notice to a post office box number in his name, and by publishing a copy of the notice in the public notices section of the local newspaper. 

After publication of the notice, Hamish contacted the bank and was referred to the debt collection firm. But he didn’t make the required repayment before the notice expired. 

The bank began the mortgagee sale process, prompting Hamish to complain that:

• The real estate agent told his tenants about the pending mortgagee sale during an inspection so they moved out, leaving him without income.
• He didn’t receive arrears-related bank correspondence before the notice’s publication.
• The bank breached his privacy by publishing the notice.
• The bank should not have outsourced recovery action.

Our investigation

We found the bank was entitled to instruct a real estate agent to inspect the property because the notice had expired without the required repayments. We also found the bank had met its obligations to communicate with Hamish, having written to him at postal addresses he had supplied. The bank was entitled to serve the notice by publication in the newspaper in line with the court’s direction. We found the loan agreements Hamish signed stipulated the bank could engage debt collection agencies if the loans were in default.

Outcome

We told Hamish we could not uphold his complaint.