This evening I attended a public meeting in La Laguna, held by the Tenerife Cabildo’s Centro Insular de Calidad y Consumo Responsable (Centre for Quality and Responsible consumerism) in collaboration with the consumer protection organisation ADICAE, to provide information about the recent European Court Judgment which ruled that the “clausula suelo” is abusive and that affected mortgagees are entitled to a full refund of costs, regardless of whether this clause was obscured or not.
The meeting began with a brief explanation of the cláusula suelo (floor clause). This is a clause imposed by banks in an estimated three million mortgages throughout Spain, whereby the interest rate paid by the customer, although tied to the Euribor (European base rate) is limited from falling below a minimum rate (the floor) even when the base rate falls. The speaker explained that this became an issue in 2009, when the base rate tumbled following the financial crash. Bank customers who expected their mortgage interest rate to reduce accordingly found that it did not, and as a result ended up paying far more for their mortgage than they should have. This clause has now been determined by the courts to be abusive, as well as costs charged to the customer as part of arranging the mortgage.
The speaker detailed the costs that customers are entitled to have refunded and emphasised that a procedure for obtaining refunds is not yet in place, but that the procedure, when one is found, will be universal (available to all those affected), fast, free of charge (with no unnecessary costs for lawyers and other professionals who would view the claims as a business opportunity) and will not require individuals to pursue their own legal action.
Mortgage-related costs that citizens are entitled to have refunded:
- All extra interest they have paid due to the cláusla suelo;
- Notary and escritura costs;
- Land registry costs;
- Gestoría costs charged by the bank;
- It was noted that the right to refund of document tax related to the mortgage contract is unclear at present as the courts have not been unanimous on this.
It was also clarified that, in the case where the customer has signed a waiver at the request of the bank that renounces their right to any refund in the event of such a court judgment, for which many banks offered incentives, this document itself is considered abusive and will not affect the citizen’s fundamental constitutional right to have their monies returned.
Since there is as yet no procedure in place for claiming refunds, the advice at present is to just wait, as ADICAE will inform the public as and when there is more information. They also invited attendees to join their association which has already represented some 15,000 of those affected in a class action against the cláusla suelo.
Unfortunately, the organisers of the meeting had grossly underestimated the interest it would generate and, instead of the two hour meeting with Q&A session advertised, the presentation was cut short after forty minutes so that it could be repeated twice more for the crowds now gathered in the lobby because the room assigned was far too small. As such, I am sure that many of the points above invite questions and clarification which was not possible this evening. ADICAE urged anyone wanting more personal advice on the matter to visit their office in Santa Cruz at C/ Juan Rumeu García 28, Office nº.12 on the second floor, on Wednesdays and Fridays between 5pm and 8pm. They also promised to hold a second meeting for the Q&A session sometime in the next week or two. I intend to go to this meeting and will gladly ask any questions on behalf of those who request it.