Mike was on holiday at that time, and upon his return in late March 2025, he filed his application with the council for building consent. The consent was approved in late May. His broker contacted the bank in July about the construction loan. However, the earlier pre-approval had expired so he had to reapply. The bank pre-approved this application subject to another valuation. Mike objected, saying he had already provided one earlier that year. The bank insisted, and the valuation was arranged in mid-September. The loan was approved on 26 September and funds drawn down to pay the builder a week later.

Mike complained that the bank had promised it would not require a valuation for the architect fees and that it broke this promise. He said the second valuation should not have been required because one had already been provided. He said the matter had caused significant stress, as well as delays that had cost him $65,000.

Our investigation

We could find little evidence about what the bank told Mike's broker about the valuation, but the broker had asked if one would be required and the bank's response implied it would not. The bank was entitled to require a valuation, but we considered it had not given the broker an adequate response to her query.

However, we did not think the matter of the second valuation had had the impact Mike claimed. He maintained construction would have been finished months earlier but for the bank’s requirement for a second valuation. However, the actions of Mike himself, his broker and the council were the principal contributors to the delays – not the bank. 

Outcome 

We recommended to Mike and the bank that it pay him $750 for the stress caused by its communication failings. Mike accepted our recommendation.