Do you have a Spanish mortgage claim?
If you are a UK expatriate living in Spain and have purchased your own property, you may have financed this by taking out a Spanish mortgage. If you have then that Spanish mortgage may have been mis-sold to you if your Spanish mortgage conditions contain a floor clause. This also applies in exactly the same way to a UK resident who has a mortgage on a Spanish property or to any international expatriate having a mortgage on a Spanish property or to any resident of any country who has a mortgage on a Spanish property.
Spain being the popular tourist destination that it is and with the explosion of new build holiday properties in recent years, it is likely that a great many expatriates of all nationalities together with ordinary people, are likely to be affected. This is particularly true of UK people.
What is Cláusula Suelo or floor clause statements?
Floor Clauses are statements that have been put into Spanish mortgage contracts as lender protection to ensure that should the interbank interest rate (euribor) drop below a certain rate then the Floor Clause kicks in and the interest rate that the customer pays does not fall any further. What this means is that if your mortgage contract includes a floor clause then there will be a minimum set interest rate that will apply to your mortgage repayments even if euribor drops to a level whereby the interest rate that should apply to your mortgage would have been lower.
In 2013, the supreme court in Spain concluded that these floor clauses were abusive and ruled that they could not apply in future. Note that this ruling meant that floor clauses could not be used from the date of the judgement.
Now that floor clauses in Spanish mortgages have been ruled to be unfair a by both the European court of justice and the supreme court of Spain, if your Spanish mortgage includes a floor clause then you could be owed thousands of euros in compensation.
This mis-selling scandal is shaping up to become the Spanish equivalent of the UKs payment protection insurance (PPI) scandal as many Spanish banks slipped this clause into their mortgage contracts without telling the client.
In December 2015, the Spanish supreme court ruled that the banks should reimburse their customers for the additional costs they incurred. Borrowers can now claim on mortgage set-up fees paid four years before and after the ruling which means between 23 December 2011 and 24 December 2019.
How widespread is this floor clause mis-selling?
There are thought to be around four million Spanish mortgage contracts containing these floor clauses and it is expected that banks could be forced to provide compensation to borrowers to the tune of €4bn, according to Adicae the Spanish banking consumer lobby.
Borrowers are most likely to have floor clauses if they took out their Spanish mortgage between 2007 and 2009 with the average person likely to be entitled to about €15,000 in compensation but it could be much more.
At expatriates.co.uk we are aware that many UK expatriates living in Spain or UK citizens holding a Spanish mortgage with a floor clause, may find it difficult dealing with such matters from a distance and in a foreign language. If this is you and you would like help then simply click here and fill out the form.
Off-Plan purchase deposit claims
It is now likely that the floodgates will open for investors who lost deposits on off-plan property purchases in Spain where the developers either acted illegally or went out of business. Once again, a change in Spanish law makes banks partly liable for the loss of down-payments on off-plan properties.
According to the centre for economics and business research, about 130,000 British buyers are owed between £10,000 and £500,000 each, with one British investor recently being awarded £200,000 in lost deposits and legal costs. When you take account of all people of all nationalities who have invested money into Spain to buy these properties, it is easy to imaging the potential scale of this.
Which Spanish banks used Floor clauses?
There are a great many Spanish banks who applied floor clauses in their mortgage contracts but we have listed below some of the more prevalent ones. If you know you have a mortgage with any of these banks you should be particularly careful when checking your mortgage contract. This also applies where you have re-mortgaged your property, not just where you have taken out a mortgage to purchase a property.
Banco Popular, Sabadell, Caixabank, BBVA, Liberbank, Santander, Bankia, Ibercaja, Caja Espana, Caja Sur, and Cajamar, but remember that there are many more that will be involved.
Who needs help with floor plan claims?
Although expatriates.co.uk is a site that is generally intended to provide assistance to expatriates of all nationalities living anywhere in the world, it follows that the information and help that it provides can be of equal benefit to the normal residents of any country. Therefore applying that thinking to this particular Spanish situation people that we may be able to assist will be in the following categories:
- UK expatriates living in Spain – If you have been living or working in Spain for some time and have a good grasp of Spanish then it is probably best that you engage with a Spanish legal firm to arrange your claim. Where you do not have Spanish then you may find it easier to have your claim arranged through a UK firm who is partnered with a Spanish legal firm. If this applies to you then please complete the form above to start your claim.
- International expatriates living in Spain – In the same way as indicated for UK expatriates, if you have been living or working in Spain for some time and have a good grasp of Spanish then it is probably best that you engage with a Spanish legal form to arrange your claim. Where you do not have Spanish but have a good command of English then you may find it easier to have your claim arranged through a UK firm who is partnered with a Spanish legal form. That way the language barrier will be removed as everything will be handled for you in English.If this applies to you then please complete the form above to start your claim.
- UK residents owning Spanish property – If you live in the UK and have purchased property in Spain as a second holiday property or rental property and have only a limited understanding of Spanish then you will probably find it easier to have your claim arranged through a UK firm who is partnered with a Spanish legal firm. IIf this applies to you then please complete the form above to start your claim.
- All country nationals owning Spanish property – Whatever your nationality if you live outside Spain and do not speak Spanish you may find it very difficult to communicate your claim effectively through the Spanish system. As English is a very commonly used international language, many people can speak it sufficiently well to make themselves understood. If this applies to you then you will probably find it easier to have your claim arranged through a UK firm who is partnered with a Spanish legal firm. That way your language barrier will be removed as everything will be handled for you in English which you will be able to understand. If this applies to you then please complete the form above to start your claim.
What are the Spanish government rules concerning floor clause mis-selling?
(updated Jan 2017)
The following sets out the steps for making a floor clause claim.
- The banks must have a system to reclaim any interest due in order to avoid cases going to court. They also must bring the existence of such a system to the attention of those customers who have floor clauses in their mortgage contracts.
- Once a claim has been made the credit entity must calculate the amount that should be returned and send this calculation to the customer. If there is no interest due then the bank must explain to the consumer why this is the case.
- The customer must confirm whether they are in agreement with the calculation that they were presented with and if they are then the bank will confirm that they will return that amount to them.
- There is a three month maximum time in which the bank and the customer have to agree to the settlement and for the money to be returned. That three month period starts from the date the claim was made. If this time period expires then the out of court period has expired and this may be because;
- The bank has rejected the request of the customer
- The three months has expired without communication from the bank to the customer
- That the customer does not agree with the calculation made by the bank
- The three months has expired without the amount being paid to the customer
- The bank will inform the customer that the return of the money may have tax consequences
- The two parties cannot start court proceedings in relation to a floor clause claim whilst this three month period is still active.
- There should be no charge for the out of court negotiation and settlement of the floor clause repayment