How to claim for floor clauses mortgage loans’ expenses and other void credits
Floor clauses’ sentence triggered legal claims to recover mortgage’s arrangement fees and costs of mortgages loans affected both by said clauses and other void ones.
In Spain, when signing a mortgage with a bank, the client is usually paying in full all arrangement fees and expenses because it was stipulated in a contract’s clause. But this is going to change quickly: after last CJEU’s sentence on floor clauses, which is backing another ruling issued by the Spanish Supreme Court considering null those formalisation expenses clauses.
The reason is courts consider that the main interested party is the bank itself, while other courts in Zaragoza and Oviedo, maintained that the bank kept clients’ interest in mind and these costs should be paid by the bank alone or by both of them equally.
In this sense, clients are entitled to claim for their mortgage formalisation expenses’ return. But what kind of expenses should be recall?:
- Notary expenses such as Land Registry invoice.
- Stamp Duty
- Management costs.
- Appraisal value of the property
- Legal advise.
Those expenses can be negotiated to be repaid by the bank now in the same way than floor clauses’ claims just bearing in mind both the year when mortgage was signed and the Spanish region where the property is located (because the Stamp Duty’s rate varies depends on that).
The cases by which a client is entitled to claim are the following ones:
1.- Floor clauses mortgages:
- if the mortgage is not already paid: the client has full right to claim for all expenses within a deadline.
- if the mortgage have been paid: the client has entitled to claim only for the previous four years before December 2015.
2.- Mortgages with clauses also declared void: this kind of mortgages are those affected by ‘zero clauses’ and ‘roof clauses’.
In those cases, the client should have into account that void clauses are indefeasible. In this sense, from a legal point of view, the nullity of those clauses arises from the breaching of Articles 83 and 89 of the Royal Legislative Decree 1/2007 and the Articles 5 and 7 of Law 7/1998 of General Conditions of Hiring.
It is estimated that those complaints would affect around eight million of mortgage loans and up to six million of consumers, amounting €18bn.
At Del Canto Chambers we are specialized in tax and trade law, specially in the management of taxation claims against the Spanish Tax Agency and courts. We can be contacted both at our platform www.spanishbank.co.uk and at clerk@delcantochambers.com
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