They complained that this error had caused their financial difficulties and also limited the amount of hardship assistance they received from the bank. They also explained that they would have planned their finances differently had they known their home was freehold.  They sought compensation in recognition of this. The bank did not accept their complaint and declined to compensate them. It said their lawyer was responsible for wrongly registering the mortgage and offered to rectify the matter at no cost to them. It said the error had merely resulted in the bank having less security than it thought it had. The bank also said it was the level of their income – and thus their ability to make repayments – that had been most relevant to the hardship assistance it could offer them, not the size of the security it held. Kahurangi and Toby did not accept this explanation and asked us to investigate.

Our investigation

We found it was, indeed, Kahurangi and Toby's lawyer who had been at fault for registering the mortgage over the land, not their home. The solicitor provided a certificate confirming they had carried out the bank’s instructions. The bank could rely on that certificate. We also found the mortgage error had no bearing on their financial situation, but rather – as they explained in their hardship applications – rising interest rates had left them without sufficient income to meet living expenses and make loan repayments. Furthermore, the mortgage error had in no way affected their ability to sell one of their rental properties to alleviate their financial difficulties, and they had briefly attempted to sell one of their rentals.

Outcome

We did not uphold their complaint.