The mortgage clauses, and specifically those that establish opening or cancellation fees, must be "clear and understandable" and their transparency cannot be taken for granted by default. If a clause is considered abusive, and void, a national judge cannot deny the consumer the return of the amounts paid (unless the provisions of national law require citizens to pay all or part of those expenses).

It is legal, if a clause is declared void, that a limited period of time should be set for claims and to request a refund, but it must be broad enough not to impede the exercise of consumer rights. And furthermore, the European Justice is opposed to a regime that allows the consumer to bear part of the procedural costs for the claim after the nullity of an abusive clause, because that would create "a significant obstacle that can dissuade consumers from exercising Your rights".

That is what the Community directive establishes and that is what the Court of Justice of the EU has ruled today. The legal language is complicated, the mortgage more, and when both come together and are screened by the Luxembourg court, the result is often very difficult to simplify. This Thursday, the Court of Justice of the Union (CJEU) has published a highly anticipated decision, in which it addresses no less than 15 preliminary questions referred by two Spanish courts, from Mallorca and Ceuta, on the scope of the European Directive in that regarding opening, cancellation and other elements of the mortgage contracts.

The Luxembourg Court groups the fifteen questions into five parts: the first, relating to the clause corresponding to the costs of constitution and cancellation of the mortgage, is the one mentioned in the preceding paragraphs. In 2016, the CJEU had already declared that the obligation of the national judge to leave an abusive clause without application generates, "in principle", a restitution effect on the amounts already paid.

Agreement between the parties

But remember that the provisions of national law can regulate the distribution of the costs of constitution and cancellation of mortgage if there is no agreement between the parties. "If these provisions place all or part of these expenses on the borrower, the Directive does not prevent the consumer from being denied the restitution of the part of said expenses that he himself must bear," says the judgment.

The second part of the decision is related to the clause that imposes an opening commission. The judges point out that the clauses included in the concept of 'main object of the contract' within the meaning of the European Directive are only those that regulate essential benefits.

On the other hand, those of an accessory nature are not included in said concept. "The fact that an opening commission is included in the total cost of a mortgage loan does not imply that it is an essential benefit of this," says the sentence.

And "in any case, a court of a Member State is obliged to control the clear and understandable nature of a contractual clause referring to the main object of the contract, regardless of whether Article 4 (2) of the Directive has been or not transposed into the legal system of that State. "

Therefore, "it is the Judge of Mallorca who must assess whether the clause that imposes an opening commission constitutes an essential component of the mortgage loan contract in question" or not. But to offer some guidance in the face of so much confusion, the CJEU states that "an opening commission cannot be considered an essential benefit of a mortgage loan simply because it is included in its total cost.

Imbalance

The third block of the sentence addresses the imbalance in the rights and obligations of those who sign a contract. And the CJEU is clear: "a clause in a loan contract concluded between a consumer and a financial institution that imposes on the consumer the payment of an opening commission may, to the detriment of the consumer, contrary to the requirements of good faith, cause a significant imbalance between the rights and obligations of the parties arising from the contract, when the financial institution does not demonstrate that this commission responds to services actually rendered and expenses incurred, an end that must be verified by the national judge. "

The fourth section enters fully into the possible limitation in time of the effects of the declaration of nullity of an abusive clause. That is, until when can a citizen claim the refund of the amounts already paid. And the decision is also quite direct: the European Directive does not preclude a limitation period, "provided that neither the moment in which that term begins to run nor its duration make it practically impossible or excessively difficult to exercise the right of consumer to request that refund. "

Finally, the judgment on the fifteen questions also touches on the distribution of costs in the context of actions for annulment of unfair terms. And Luxembourg's message is that the Community Directive and the "principle of effectiveness" oppose a regime that allows the client to "bear part of the legal costs based on the amount of amounts unduly paid that are returned to him" after an annulment due to an abusive nature ".

The distribution of costs, says the judgment, would create "a significant obstacle that may discourage consumers from exercising the right, conferred by the Directive, to effective judicial control of the potentially abusive nature of contractual clauses."

THE CASES

The case resolved today by the CJEU originates with the doubts of the Court of First Instance No. 17 in Palma de Mallorca. In May 2001, someone identified as CY signed a mortgage loan before a notary with Caixabank, for an initial amount of 81,136.63 euros, and which also provided for the payment of variable interest. The fourth clause of that contract required the borrower to pay an opening commission, at the time of signing the deed, of 1%, which was equivalent to 135,000 pesetas, equivalent to 811.37 euros. Another clause required that the client also pay all the costs of constitution and cancellation of the mortgage.

In 2018, CY filed a lawsuit requesting that these two clauses be declared void due to their abusive nature, as well as ordering the return of all amounts paid. Caixabank invoked the full validity of the terms in dispute.

Regarding the clause relating to mortgage expenses, the Spanish judge stated that the majority of Spanish jurisprudence considers that this type of clause is abusive and, therefore, void.

However, it added that regarding the effects of said nullity, the Spanish courts have issued different and contradictory decisions that place consumers and financial entities in a situation of legal uncertainty.

And it required information and guidance on the European Directive. For its part, on the opening commission, the Court highlighted the consensus of the Provincial Courts on the abusive nature and nullity, since it does not correspond to any actual or effective service or charge.

But remember that the Spanish Supreme Court had recently contradicted this jurisprudential line when considering that the opening commission, "as part of the main object of a loan contract, should be excluded from the review of its abusive nature under the European" Directive.

For all these reasons, the judge in Mallorca referred up to 13 questions for a preliminary ruling in relation to the European Directive. Added to this is a lawsuit by two consumers in Ceuta against BBVA for another mortgage clause that stipulated that all the costs of formalizing and extinguishing the mortgage must be borne by the consumer. And that added two more questions to European judges.

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Know more

  • Ceuta
  • Palma de Mallorca
  • Supreme court
  • Mortgages

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