Roman and Violet complained that this demand was unfair and unreasonable. They also complained that the bank's actions caused substantial delays in building their home and selling the bed and breakfast property; that the bank unnecessarily required a new valuation; that it breached a duty of confidence it owed the trustees; and that a bank error in a loan agreement resulted in extra legal costs.

Our investigation

We found the bank's demand was in accordance with its agreement with Roman and Violet, and that in making the demand it was exercising its commercial judgement. In short, the bank had acted reasonably. We found nothing to justify the complaint that the bank had caused building delays, or that it had breached any duty of confidentiality. However, we found the bank made a mistake in the terms of the loan agreement and did not explicitly acknowledge its mistake or admit until later that a financing procedure was necessary to correct a defect in the loan documentation. We recommended that the bank pay the legal costs incurred by Roman and Violet as part of correcting the documentation, along with $500 for the stress and inconvenience it had caused them.

Outcome

Roman and Violet accepted our recommendation.