Plain language law

New Zealand law explained for everyone

Building Societies Act 1965

Constitution of building societies - Membership

27: Liability of members

You could also call this:

“Members only owe what they agreed to pay for their share or loan”

When you’re a member of a building society, there are rules about how much money you might owe. If you have a share in the society but haven’t borrowed any money or made any investments, you only have to pay what you’ve agreed to for that share. If you haven’t paid it all yet, you’ll need to pay what’s left.

If you have a share and you’ve borrowed money or made an investment through the society, you only have to pay what you agreed to in your mortgage, other agreement, or what the society’s rules say.

If you’ve borrowed money or made an investment under special rules (mentioned in section 24), you won’t have to pay more than if you just had a share in the society because of that loan or investment.

These rules are there to protect you and make sure you don’t end up owing more than you expect.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM371617.

Topics:
Money and consumer rights > Banking and loans Housing and property > Buying and selling homes
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26: Joint shareholders, or

"Sharing ownership of building society shares with others"

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27A: Interpretation, or

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Part 2 Constitution of building societies
Membership

27Liability of members

  1. The liability of a member of a society in respect of any share on which no loan or other investment has been made shall be limited to the amount actually paid or in arrear on the share.

  2. The liability of a member in respect of any share on which a loan or other investment has been made shall be limited to the amount payable thereon under any mortgage or other security or under the rules of the society.

  3. The liability of a member to whom a loan or other investment is made under rules made in accordance with section 24 shall not be greater than it would be if the rules treated him or her as being, by reason of the making of the loan or other investment, the holder of a share in the society.

Compare
  • 1908 No 18 s 9
  • Building Societies Act 1962 s 11 (UK)
Notes
  • Section 27(1): amended, on , by section 38 of the Building Societies Amendment Act 1987 (1987 No 175).
  • Section 27(2): amended, on , by section 38 of the Building Societies Amendment Act 1987 (1987 No 175).
  • Section 27(3): amended, on , by section 38 of the Building Societies Amendment Act 1987 (1987 No 175).