The recent Judgment of the CJEU, dated March 26 2019 on the early expiration clause in Spanish mortgages, has confirmed its null and void character as was already declared by the Spanish Supreme Court.
The important question now is whether the contract can exist without the early expiration clause, especially the one that allows the lender to terminate the contract after a one month default.
As the clause is not essential in the contract, THIS CAN EXIST WITHOUT IT as in case of default, the lender may demand compliance or resolution through other means established by Law.
But, one thing is the existence of the contract when the nullity of the whole can harm the consumer and another is the survival of the executive mortgage foreclosure proceedings.
Saving the said procedure would really benefit the lender, and would render useless the dissuasive effect and the principle of effectiveness that the CJEU highlights in this Judgment.
The role of the National judge then passes to properly inform the consumer of the effects of each assumption so that the consumer in any case freely decides what assumption he wants to be applied, as made clear in his conclusions on these questions by the Attorney General MR. Maciej Szpunar presented on September 13, 2018 in section 136.
Three preliminary questions are pending so the full understanding and effects of this first decision will not be clear till those other three have been passed. (Cases C-92/16-Jdo. 1st Inst. No. 1 of Fuenlabrada-, C-167/16 -Jdo. 1st Inst. No. 2 of Santander- and C-486/16 – Jdo. 1st Instance 6 of Alicante).
But what is clear is that
- foreclosure, when the anticipated expiration of the contract has been considered due to a breach of the payment obligation, nor can it allow the remainder of the clause to exist, nor can it be replaced by the new wording of article 693.2 LEC, so that continue the execution, SINCE THE CONTRACT CAN EXIST WITHOUT SUCH CLAUSE
- AND WHAT CANNOT EXIST IS THE FORECLOSED MORTGAGE EXECUTION, and therefore it must be declared void and filed, referring the claim to the ordinary proceeding, with more guarantees for both parties so once a favourable judgment is obtained it can be enforced through the ordinary way, which has the same effects and “benefits” as foreclosure.
One of the advantages of this interpretation for mortgage debtors is the possibility of the consumer to introduce a debate on all the abusive clauses included in the contracts and to claim for rights that were unfairly suppressed with the introduction of these. (i.e. – To be informed if the debt was sold to a third party and consequently exercise buyout rights)