Is the clausula suelo illegal?
Many clients wonder: is the clausula suelo illegal? This is a very common doubt amongst people with mortgages in Spain.
“I am a little confused about the Clausula Suelo as it seems it was always an illegal clause. The European courts have ruled that banks should remove the clause and refund all monies to the customers affected. We have a mortgage with xxxx and I know that they applied the Clausula Suelo. Can I ask for a refund?”
The clausula suelo is not illegal. The Spanish Supreme Court and the European Court have not ruled that it is an illegal clause.
They have ruled that the bank should have informed properly about this clause to the customer and if the customer was not properly informed then the clause has to be removed.
The Spanish Supreme Court already ruled that in 2013. Probably due to the bad economic situation in Spain, the Supreme Court decided that the interests charged for this clause had to be refunded since the judgement (2013) because the damage to the banks was calculated to be very high and it would have meant the crash of the Spanish Banks. Now that the economic situation is apparently improving, the European Courts have ruled that the interests charged due to the clausula suelo have to be refunded since the mortgage was signed, which is the correct thing to do.
We will soon see a Judgement from the European Courts regarding this.
Now, to claim the removal of the ground clause, the customer should not have been informed properly about it.
The customer should have received a “binding offer” (oferta vinculante) from the bank, specifying all the details of the mortgage including the ground clause.
The ground clause has to be properly explained in the Mortgage Deeds. And the customer should have received a document from the bank with the advantages and disadvantages of having a ground clause, so the customer could decide if he/she wanted a mortgage with the ground clause or not.
In this Law Firm, we have had more than 40 cases and the bank has removed the clause in all of them. If you would like to remove your ground clause please contact with us.