Shock announcement on mortgage expenses leaves Spanish property owners reeling

Shock announcement on mortgage expenses leaves Spanish property owners reeling

  • Government announces deadline of 21 January 2021 for mortgage-related cases against banks
  • Consumer law experts incensed
  • CostaLuz Lawyers appealing to all those impacted to take immediate action

Spain’s Ministry of Consumer Affairs has caused controversy with a shock announcement on mortgage-related cases against banks. The government department issued a notice via social media that the final deadline for all such claims would be 21 January 2021. The surprising decision has riled consumer law experts, as well as those across the property sector.

“Nobody really saw this coming. The announcement itself, with its talk of judicial deadlines, is very unusual. There was already a huge lack of clarity on this issue and this short-notice deadline by which mortgage holders must take action is adding fuel to the fire.”

Keith Rule, CostaLuz Lawyers

The issue in question relates to an oft-included clause in mortgage contracts issued by Spanish banks. The clause requires the mortgage holder to pay all mortgage-related expenses, including IAJD tax (mortgage tax/stamp duty), notary and land registry fees. However, on 21 January 2016, the Supreme Court ruled that this was unfair on the mortgage holder and that the cost should not be solely borne by them. This was because many of those expenses were in place in order to protect the bank issuing the mortgage, rather than the borrower.

The 2016 ruling opened the doors for mortgage holders to begin claiming such expenses – often amounting to several thousand euros – back from their banks. A ruling on 26 October 2020 then clarified further that the expenses should be split as:

Now, less than two months after this clarification, the government has announced a final deadline for making claims of 21 January 2021 (this being five years after the initial ruling).

The team at CostaLuz Lawyers points out that this short-notice deadline, given just before many people start to relax for the Christmas break, means that thousands of potential claimants will miss out on the chance to reclaim money that is rightfully theirs.

“The lack of notice of this final deadline by which mortgage holders must begin legal proceedings feels like the government giving a Christmas gift to the banks. We would call on all those with the potential to make a claim to act immediately and spread the word to others in the same position.”

Keith Rule, CostaLuz Lawyers

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es