Mother's $320K Loan Nightmare With PNC Bank Ends After Ombudsman Steps In
A mother who helped her son and daughter-in-law buy a house in 2008 faced years of legal trouble after their separation. The dispute over the property led to a frozen loan and a battle with the PNC bank. Despite her offer to repay the full amount, the PNC bank refused to act until the Ombudsman intervened.
In 2008, a woman joined her son and daughter-in-law in a property partnership, taking out a $320,000 loan together from the PNC bank. The agreement seemed straightforward at first. But when the couple later separated, disagreements arose over selling the house.
The son opposed the sale, leaving the mother and daughter-in-law unable to proceed. The PNC bank then froze the loan accounts, ignoring all instructions from the parties involved. Even when the mother offered to repay the entire loan, the PNC bank still refused to release the funds.
The Banking Ombudsman later stepped in, questioning the PNC bank's refusal to accept repayment. Eventually, the PNC bank offered the woman $10,000 in compensation. The case highlights the risks of joint property purchases without clear legal safeguards.
New Zealand's property laws for partnerships have remained largely unchanged since 2008. The Property (Relationships) Act 1976 still governs how assets are divided in separations or deaths. However, recent recommendations stress the need for separate titles, written agreements, and independent legal advice for all parties.
Mortgage advisers warn that partnerships can be a useful way into the property marketābut only if rights and obligations are clearly defined. Deciding in advance how to split assets if a partnership ends can prevent costly disputes later.
The woman's case ended with a compensation payout, but the legal battle took years to resolve. Experts now urge anyone entering a property partnership to document agreements carefully and seek legal advice. Without these steps, disputes over shared assets can lead to long-term financial and emotional strain.
