ANGELA RUIZ-CORTINAPractising and Licensed Lawyer Member of the Malaga College of Lawyers
SPANISH MORTGAGE WITH A “FLOOR CLAUSE” OR CLAUSULA SUELO. If you have a mortgage from a Spanish Bank it is possible you may have been overcharged. Recent Court rulings passed by the Spanish Supreme Court and the European Court have declared invalid certain clauses in the mortgage contract that may be not easy to understand or not transparent. Added to these Court rulings on the floor clause, another ruling from the Spanish Supreme Court declared abusive the initial mortgage costs imposed by the Banks and that the consumer had to pay when obtaining a mortgage, such as Notary, Stamp duty, Property Registry and the property survey costs – “tasación”.
WHAT IS THE “FLOOR CLAUSE”.
If you have a variable interest mortgage indexed on the Euribor there may be a hidden or difficult to understand clause indicating that even if the euribor were to go really low, your interest will never go below a certain percentage (3.5%, 4% etc)
This kind of clause is what the High Court has declared invalid forcing the banks to negotiate with each individual to be reimbursed of any amount overcharged.
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