New out-of-court procedure
The recent resolutions adopted by both the Spanish and European courts regarding floor clauses (Cláusula Suelo), have tipped the balance to favor the mortgage or loan holder, i.e. the debtor, rather than the bank or mortgage company. Last December 2016 the European Court confirmed that the clients affected by these clauses are entitled to be reimbursed all of the overpaid amounts paid from the beginning of their loan agreement, and not only from 2013 as the Spanish courts were awarding previously.
The reason for this is very simple, once a clause in any agreement is judged to be null, then it has always been null, and a fixed period of when it was not cannot be justified by any means. Despite this, there are still some banks reluctant to return the money to their customers. Following the latest sentence the Spanish government has adopted a new rule, (RD-Law 1/2017), in anticipation of the large number of claims that will occur, and to regulate a out-of-court procedure for claiming amounts unduly paid because of the floor clauses. The most important points of this rule are:
- It applies only to loan/mortgage agreements signed with consumers.
- It allows a period of 1 month for the banking entities to create a specific department for this type of claim. Banks should then inform clients of its existence and of how to go about reclaiming the amounts due.
- Once the claim has been filed, the bank has 3 months to respond to the client.
- If the client accepts the bank’s offer the refund should be paid in cash.
- Refunds may generate some tax obligations and the banks should inform the client of this.
- It is acceptable too, to agree to reduce the capital owed by the amount of the refund due. In order to do this the bank must provide sufficient information to the client to enable them to evaluate that option and to ensure that it is economically advantageous.
- If you are not satisfied with the amount offered by the bank, the claim can then be taken to court; however, you should be aware that if you lose the case then you would be ordered to pay the costs.
Recently, the Spanish Courts have made other pronouncements concerning the possibility of declaring null another very common clause in loan/mortgage contracts, namely the mortgage expenses clause. Specifically relating to who should pay the expenses of notary, registration and tax derived from the Loan /Mortgage Deed. Basically the courts establish that it is abusive to make the client pay all these expenses when the interested party to whom the loan is registered is the bank. Keep in mind that the new recently approved procedure does not signify an automatic claim for these expenses. It means the client would have to negotiate with the bank to claim them, and if the bank will not pay them, again, the only possibility is to go to court.
Private contracts with the bank
Prior to the judgment of the CJEU., (December 2016), many banking entities have signed private contracts with their clients in which the client agreed to eliminate the floor clause and to waive the claim of the corresponding amounts due to them from the ground clauses in exchange for a fixed rate on their loan/mortgage. In these cases it may be more complicated and costly to recover the overpaid amounts due to the ground clauses, but even so it is not impossible, as the Spanish Courts have issued some recent judgments declaring such contracts void.
To prevent banks from continuing to exploit their clients, we recommend that you use the services of a professional. Our office, Marbellasolicitors, offers you the possibility to make an appointment, with no obligation, to study your particular situation, and then to assist and advise you to preserve your rights. Do not hesitate to contact us about this or any other legal matter that may interest you. You’ve got nothing to lose, make an appointment with us at no cost! Please contact us here or by e-mail: firstname.lastname@example.org or phone: 952 901 225.