If a building society is being dissolved or liquidated, you don't have to worry about paying back your loan or investment right away. You only need to pay it back at the times and under the conditions that were set out when you first got the loan or made the investment. These conditions might be written in your mortgage, another type of agreement, or in the society's rules. This rule is there to protect you from having to pay everything back all at once just because the society is closing down.

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This page was last updated on 15 April 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM372366.

Topics:

Money and consumer rights > Banking and loansHousing and property > Buying and selling homes

118: Dissolution by appointment of liquidator, or

"How a building society can be closed down by someone in charge"

120: Notice of dissolution or liquidation, or

"Telling the official record keeper when a building society is closing down"

Part 8Dissolution and winding up

119Liability of members on dissolution or liquidation

Where a society is being dissolved or is in liquidation, a member to whom a loan or other investment has been made under a mortgage or other security, or under the rules of the society, shall not be liable to pay the amount payable thereunder except at the time or times and subject to the conditions set out in the mortgage or other security, or in the rules, as the case may be.

Notes

Section 119: replaced, on 1 July 1994, by section 8 of the Building Societies Amendment Act 1993 (1993 No 111).