Friday, 19 May 2023
A court on Spain's Costa Blanca has confirmed that several clauses related to costs in the mortgage loan of a resident of Alicante were abusive and invalid. These clauses included the arrangement fee, valuation, notary and registry fees, as well as administration fees.
The defendant bank agreed to the declaration of nullity of these clauses, except with regard to the restitution, arguing that the statute of limitations had expired. However, the judgment has declared all the aforementioned clauses null and void as they were abusive, which means the recovery of 6,224 euros in favour of the client.
In addition, the defendant has been ordered to pay the legal costs of the proceedings.
This court ruling contributes to the protection of consumers and reinforces the fight against abusive clauses in mortgage loan contracts. Unive Abogados stated that a ruling is expected from the Supreme Court, which will apply the recent EU case law of March 2023 and establish a case law for the arrangement fee. However, more and more courts throughout Spain are already successfully resolving this type of claim.
The Law 5/2019 on real estate credit contracts (LCCI), also known as the mortgage law, which came into force on 16 June 2019, introduced major new features in the mortgage system, one of them concerning who bears the costs arising from the formalisation of a loan or credit contract.
"However, this law does not apply to all contracts of this nature, but only to those loans with a guarantee (mortgage or otherwise) on residential property, or loans (mortgage or otherwise) to acquire or retain ownership of any property, provided that the borrower or guarantor is a consumer," as stated in the blog of the General Council of Notaries.
Cristina García, the lawyer in charge of the case, has highlighted the opportunity for those affected by these mortgage costs to recover what they have overpaid by means of claims against the financial institutions.
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