Unfair Spanish mortgage clauses
Can you make a claim?
Some readers may have heard about recent rulings regarding unfair clauses and charges relating to Spanish mortgages. The subject is currently generating huge public interest due to the number of property owners in Spain with mortgages that are potentially affected.
There are now two separate issues which may give rise to a claim against the banks. Firstly, the issue of interest payments under a mortgage. Secondly, the issue of administrative fees and charges imposed upon property owners by the banks under a mortgage. We shall now look at each issue in turn:
Mortgage Interest Payments
On 9th May 2013 the Spanish Supreme Court declared null and void the ‘Clausula Suelo’ (minimum interest ‘floor clause’). Whilst most mortgages are linked to the Euribor base rate, (e.g. an interest rate of 1.5% above Euribor), many also contain a clause imposing a minimum interest rate (typically 3%), regardless of whether the Euribor actually drops lower. These floor clauses were ruled illegal for “lack of transparency”. However, to the frustration of many, the court declared that claims could not be made retrospectively ‘to avoid serious economic repercussions for the banking industry’.
However, the case was then referred to the European Court of Justice, who announced on 21st December 2016 that the restrictions imposed in the 2013 Judgment were contrary to European law and that Spanish banks must refund all money collected under the abusive ‘floor clauses’.
What you will have to look for as a consumer is a particular advice, given that the conditions are specific to each loan, and will have to study what strategy to follow in each case to make the claim against the banking entities and how to negotiate for no Be misled by unfavorable products or offers or continue to be covered under covert clauses.
Mortgage Administration/Arrangement Fees
On taking out a mortgage in Spain, many consumers have been hit with different fees and charges e.g. administration fees, bank notary and land registry fees etc.
On 23rd December 2016, the Supreme Court issued Decree 705/2015 of December 23, which ruled null and void certain types of clauses imposing charges upon mortgage customers. The rationale behind the decision was that it is the banks who benefit from the legalisation, registration and protection of their mortgages, hence they should bear some or all of those costs.
So what expenses can potentially be recovered from the banks? Primarily, the bank’s notary and land registry fees for finalising and registering a mortgage, plus any stamp duty taxes paid in respect of the registration. Other expenses such as arrangement fees may also be potentially recoverable, depending on the circumstances, but such additional claims will have to be tested in the courts.
Before making a claim in respect of either or both of the above matters, each case must be individually assessed and the relevant mortgage clauses studied to ascertain whether they are likely to breach the guidelines set out in the latest rulings.
Whilst we are awaiting further clarification, it appears that no time limit has been placed on bringing retrospective claims. Hence, customers who took out applicable mortgages many years ago may also be entitled to bring a claim.
To make an assessment, we will need to review your mortgage deed. In respect of interest claims, we will need to see relevant mortgage statements and the receipt for your last payment. In respect of expenses claims, we will need to see invoices or statements detailing all relevant expenses, plus receipt or evidence of any relevant tax paid (if applicable). For properties which is the client’s main residence (i.e. not a holiday home), we will also need to see a Certificado de Empadronimiento (Town Hall Certificate of registration to live in the borough).
Tenerife Solicitors charge a fixed fee for consultations of €60 which is fully refundable against any subsequent work we do for you in the matter. In certain cases, we may there-after be able to offer no-win-no-fee representation, subject to qualifying terms and conditions.
To arrange a consultation, please call Tenerife Solicitors now on 922 717845 (0871 218 0063 from the UK) or email us at firstname.lastname@example.org