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Legal tip 1427. Questions and answers on extrajudicial (out of court) procedure for the return of overpaid interest due to floor clauses in Spanish Mortgages
27 January 2017 @ 11:45

How to claim a refund of overpaid interest due to floor clauses in Spanish Mortgages


These steps need to be followed:

1.- Claim to your bank office/branch

 

2.- The bank must send to the consumer the calculation of the amount to be returned, including interest or, where appropriate, the reasons why it considers the claim is not appropriate.

3.- Upon receipt of the communication, the consumer must state whether he agrees with the calculation and, if he does, the bank will return the agreed amount either by crediting the customers bank account or by reducing the amount of the outstanding mortgage.

The whole process must be completed in a maximum period of three months

Can I claim if my mortgage has already been paid off?

Yes, you can. Deadline for the claim is 15 years.

Can I claim if I have already received a refund of overpaid interest from the date of the Spanish Supreme Court Sentence in May 2013?

This matter will depend on a new Court ruling by the Supreme Court which is expected to be issued in the next couple of months.

My bank has informed me that my mortgage has a floor clause.  Does that mean the Bank is also refunding voluntarily?

No. The Royal Decree makes it obligatory for Banks to “ensure that this system is known by all consumers with floor clauses in their contracts”. However, it also clarifies that Banks will only do the calculation of the amount to be returned to those customers who they consider need to be repaid.  Banks will inform other customers why they consider they should not be refunded.  Banks may refuse to refund the amounts if the bank believes that the customer was a financial professional who was fully aware of the clause and/or that the bank fully and transparently informed the customer at the time of taking out the mortgage about the inclusion of the clause in the mortgage and its effects.

When is a Floor Clause transparent?

a) The consumer must have been expressly informed that when the variable interest rate linked to the Euribor goes lower than a determined point, the interest rate effectively becomes fixed at a higher rate.

b) The consumer must have been informed that with a Floor Clause he will not benefit from the drop in the EURIBOR below a certain point.

c) The consumer must have been informed in a clear and transparent way regarding the inclusion of the clause.

d) The consumer must have received information on other products without a floor clause as a comparison before accepting the mortgage.

If the bank is not going to give me back the money, should it still provide me with the calculation of how much extra I have been charged due to the clause?

No. They will only provide the calculation if they consider that the inclusion of the clause in the mortgage was not transparent.

Will all customers receive their refunds in cash/credited to their bank account?

The first offer must be in cash/credited to the customers bank account, however the customer and the bank may agree on different compensatory measures, such as a reduction in the amount outstanding on the mortgage.  In this case, the acceptance by the client will be in writing, having been duly informed of the economic value of the alternative measure.

What are the consequences of initiating the claim with the bank?

According to the decree, “the consumer may decide to go to court directly but once the extrajudicial proceeding has been initiated and until it has been resolved, the parties may not exercise any alternative judicial or extrajudicial action in relation to the same claim”.

Is the procedure with the bank free?

The extrajudicial claim procedure is free. There is also a substantial reduction of notary and registry fees resulting from amending the mortgage contract that may result from the acceptance by the client of alternative measures other than cash repayment.

What if I have sued the bank and now I want to negotiate with them?

Those judicial proceedings that are already in progress can be, by mutual agreement, suspended to submit the claim to the extrajudicial procedure.

Can I go to court after negotiating with the bank?

Yes, although you must wait until the out of court/negotiation process is completed.  In regards to court costs, mechanisms are established in the Royal Decree that encourage the entity to resolve properly and in good faith.

If the consumer claims against the bank in court after failing to reach an agreement in the out of court/negotiation stage and the judgment that he obtains is economically more favourable to him, the bank will be ordered to pay legal costs.

On the other hand, if the consumer goes to court directly without using the out of court/negotiation procedure and the bank fully settles prior to the process of answering the claim, the entity will not be ordered to pay costs.

Can I pay costs if I go to trial?

Yes, if a customer claims in court and the judge grants an amount lower than what was offered by the bank, the judge may see bad faith in the need for going to court and the Judge may not impose costs on the bank.  Therefore, you will pay your own legal costs.

Will taxes be paid after receiving the money claimed?

It is not clear at all.  For the time being, the Government has said that in order to adapt the tax treatment of the amounts received, “The IRPF Law will be reformed so that, in case of refund of amounts wrongly collected by floor clauses, either by agreement or by judicial or arbitration decision, fiscal neutrality is ensured to the buyer”



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