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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 1425. Claim a refund for fees imposed on you by the Bank when opening your Spanish Mortgage
27 January 2017 @ 11:35

IF YOU HAVE A MORTGAGE IN SPAIN YOU COULD CLAIM A REFUND FOR SOME OF THE FEES YOU PAID WHEN TAKING OUT THE MORTGAGE

In December 2015, the Spanish Supreme Court ruled that mortgage clauses introduced by Banco Popular and BBVA that forced borrowers to pay all fees related to taking out the mortgage were abusive.

The Court ruled that the banks should pay for all or at least part of these mortgage opening expenses, because making a formal record of the mortgage deed is for the benefit of the bank.

Since then various First Instance and Provincial Appeal Courts have issued Sentences in favour of mortgage borrowers.

The Supreme Court Sentence 705/2015 dated 23 December 2015 declared abusive the following clause in which BBVA imposed on the borrower the payment of all expenses, taxes and commissions associated with the mortgage loan:

“Borrower must pay all taxes, commissions and expenses incurred in the preparation, formalization, correction, writing, modification – including division, segregation or any change that implies alteration of the guarantee – and execution of this contract, and for the payments and reimbursements derived there from, as well as for the constitution, maintenance and cancellation of its guarantee, being also in its charge the premiums and other expenses corresponding to the insurance of damages, that the borrowing party is obliged to have in force”

Nullity declared by the Supreme Court is based on the lack of detail in the loan agreement, with regards to expenses, commissions and taxes, being imposed in a generic manner.

If you paid all the fees related to taking out your Spanish Mortgage then you maybe entitled to a refund of some of those fees.

Who is eligible to claim?

If you are currently paying a mortgage in Spain or if you paid it off up to four years ago, you may be entitled to claim a refund of fees based on the Supreme Court ruling of 23 December 2015.

If you have already paid off your mortgage then you may claim a refund if you fully paid off the mortgage up to four years prior to the Supreme Court Sentence, so on or after 23 December 2011.

The Supreme Court Sentence applies to mortgages on primary or secondary homes of individual consumers.  It does not apply to companies or corporate borrowers.

How to claim?

1. Initially a complaint must be made to the Customer Service Department of the Bank or Entity with whom the mortgage loan was contracted.  If the Bank with whom you took out the mortgage has now been taken over by another bank then it is that new bank to whom you must make the complaint.  We can send you a template for this initial letter.

2. After two months from the complaint, if the Bank Customer Service Department has not replied or if its answer has been negative, it will be necessary to file a Lawsuit against the Bank.

If legal action is required, what will be claimed in the Lawsuit?

The Lawsuit will request the declaration of the clause as null and void due to being abusive and the refund of expenses paid as a result of that agreement, which must be perfectly documented with their corresponding invoices.  To file a Lawsuit it is necessary to instruct a Lawyer who in turn will instruct a Barrister & Procurator on your behalf.

What expenses, taxes and commissions can be claimed?

* Notary costs

* Mortgage Land Registry costs

* Registration costs (Gestoría) expenses (the company that ensures the property and the mortgage are correctly registered in the land registry – but only if the gestoría was imposed by the bank)

* Property Valuation costs

* Attached abusive insurance costs (Life insurance, Mortgage repayment Insurance)

* Commissions on lack of payments

* Mortgage cancellation costs and commissions

* Any judicial or extrajudicial cost which has been charged automatically on the consumer, not following the perceptive rules of the Civil Procedure Act.

Mortgage set up fees normally represent between 2.5% and 3% of the mortgage value.

Is it possible to claim a refund of Stamp Duty?

Some Judges are ordering a refund of notary, mortgage land registry and gestoría fees, but not the Stamp Duty (AJD or Documented Legal Acts Tax), which in fact represents around 75% of the associated expenses when taking out a mortgage.

Many claimants have though also claimed a refund of the Stamp Duty.  Sentences issued by the Supreme Court and the Provincial Appeal Court of Zaragoza say it is the Bank that must pay the cost of Stamp Duty.  However, the Provincial Appeal Courts of Oviedo & Pontevedra have issued Sentences stating that the Stamp Duty should be paid by the consumer.

Of course there is no refund for Property conveyancing costs and Property Conveyance Tax which must always be paid by the home buyer.

What documents are required to make the claim and file a Lawsuit?

The mortgage deed, the notary’s invoice, the land registrar’s invoice and the tax form documenting payment of the AJD duty (form 600)

What is the deadline for the claim?

Deadline for claiming these costs and expenses is 5 years from the Supreme Court ruling of 23 December 2015.

Have any banks now changed their clauses relating to mortgage opening fees?

Yes, BBVA, Santander, Bankia, CaixaBank, Sabadell & Ibercaja have all changed their clauses relating to mortgage opening fees.  By doing this they hope to avoid future claims on new mortgages.  However, this does not prevent consumers claiming refunds for mortgages signed in the past with these banks.

Do I have a good case in Court?

Lawsuits should be well drafted and submitted with the correct evidences and documents.  Based on case law from the Supreme Court and other Provincial Appeal Courts you should have a good case.  However, any legal action should never be considered as easy, especially against Banks with enough resources to appeal any unfavourable decision.

The fact that many banks have now changed their own clauses following the Supreme Court decision (which called them ‘abusive’) means they are aware these fees were not properly established.

Contact us now and we will review your mortgage documents, negotiate with your bank for the refund of mortgage opening fees and, if necessary file a Lawsuit against the Bank.

Rota, Cadiz, Costa de la Luz, South western Spain



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