abusive mortgages in Spain

One of the latest sentences to come out of the Spanish Supreme Court notches up another win for consumers. In the 555/2020 sentence, the Supreme Court orders a bank to pay costs for mortgage paperwork. These costs called gastos de gestoría in Spanish have been traditionally passed on to the borrower, and the latest sentence relieves consumers still further of the burden of mortgage costs.

ECJ Sets New Ruling

Until the recent ruling, Spanish courts have applied the jurisdiction laid out in the 49/2019 sentence. This law states that when services benefit both parties (the bank and borrower in this instance) or act in both parties’ interests, the costs should be divided between the two.

However, in July this year, the European Court of Justice (ECJ) ruled that when a clause in a contract is deemed abusive, costs should not fall on the shoulders of the consumer. The ECJ specifically stated that if there is an abusive clause, the consumer is entitled to a refund.

Supreme Court Take On Board ECJ doctrine

The Spanish Supreme Court has taken this ruling into account in the 555/2020 sentence and stated that in the particular case under review, the costs of mortgage paperwork must be paid by the bank. This means the borrower will receive a refund of the amount paid towards gestoría charges. These typically include services such as registering the mortgage deeds at the Property Registry.

However, the Supreme Court did accept some of the bank’s original appeal. The ruling also stated that the payment of taxes such as transfer tax and stamp duty on the mortgages are clearly the borrower’s responsibility. Furthermore, notary costs should be divided between the two parties (bank and borrower). The exception to this are charges for the first copy of the deeds and any subsequent copies requested by the bank who is responsible for the costs of these.

See here to find out if you are entitled to compensation from your bank because of abusive mortgage clauses.

Welcome doctrine for consumers

The latest Supreme Court ruling shows that Spanish judges are gradually taking on board the ECJ decision and opening the door wider for fairer contracts for the consumer. The sentence comes hot on the heels of other rulings, also in favour of the consumer.

Examples include eight Spanish courts who have ruled that mortgage opening fees are abusive. These court decisions are in line with ECJ doctrine, although the Spanish Supreme Court still claims that the mortgage opening fee is not an abusive clause.

And the Supreme Court also recently confirmed that banks are liable for court costs when abusive clauses are involved.

At Costaluz Lawyers, we welcome the latest Supreme Court decision as yet another step towards better and more protected consumer rights against Spanish banks.

Over the last 15 years, we have made it our mission to contest abusive clauses in any contract, particularly those for mortgages, and the latest sentence adds further weight to our arguments.

Abusive clauses in your mortgage contract

We are specialists in successfully fighting Spanish banks in abusive mortgage clauses and have helped dozens of clients reclaim costs they should never have paid.

If you have a mortgage contract that includes clauses that could be considered abusive, do get in touch.

Our expert team will be only too happy to offer you a free consultation to discuss what options you have for compensation.

María Luisa de Castro

DIRECTOR

María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English speaking clients with legal problems in Spain.

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