ECJ ruling reshapes mortgage cost refunds for consumers in Canada and America
A recent European Court of Justice decision reframes the window for reclaiming mortgage establishment costs from lenders, moving beyond earlier narrow interpretations. The five-year countdown some suggested did not represent a fixed expiry. On average, the recoverable amount ranges from roughly 1,500 to 3,000 euros, and the ECJ clarifies that the time to seek reimbursement can extend within that broad band.
The verdict clarifies when the claim period should start, overturning the idea that the Supreme Court ruling of January 23, 2019 marks a decisive beginning or end. It confirms that notary, brokerage, registration, and appraisal charges may be recoverable, and that the claim period does not hinge solely on events like the court’s decision.
The ECJ also rejected the notion that the window closes ten years after costs were incurred. That interpretation, which would exclude mortgages arranged after early 2014, no longer holds.
Consumer protection
The ruling stresses that a claim period can begin only after a consumer understands the abusive nature of the charges and after national courts publish their legal interpretation. In practice, this means borrowers must be informed about the unfair charges and their legal consequences.
Industry observers note that the ECJ rejects the view that the reclaim window has already expired. The decision could extend the window in an open-ended way. Asufin, a financial consumer association, highlights that the ruling strengthens the possibility for borrowers to pursue reimbursement for mortgage expenses and signals ongoing advocacy on behalf of consumers with mortgage costs. Arriaga Partners echoes this sentiment.
For those who signed mortgages before the 2019 act, statements from notaries, brokers, registrars, and appraisers may have indicated these expenses were recoverable under the new law. The Supreme Court’s 2019 doctrine concluded that the old article had been misused, allowing partial recovery of notary costs and full recovery of other expenses. Yet the exact deadline for reclaiming amounts ranging from 1,500 to 3,000 euros had remained unsettled.
The matter was addressed in a Barcelona Provincial Court preliminary ruling filed in December 2021 involving CaixaBank, BBVA, Banco Santander, and Banco Sabadell. The ECJ’s response clarifies two potential moments for determining when costs are paid or when judgments are published and provides a clear standard for future cases.
“Excellent news”
Asufin describes the ECJ decision as definitive in the sense that a consumer recognizes the abusive nature of the provision upon receipt. The ruling makes it clear that deadlines cannot be simply calculated from invoiced payments, a point noted by regional courts in Barcelona and the Balearic Islands.
Patricia Suárez, president of Asufin, welcomes the ECJ decision, stating that it corrects prior court interpretations and recognizes that a consumer does not need to know case law to file a complaint. Jesús Arriaga, co-founder of Arriaga Asociados, agrees that this is good news for affected borrowers who can exercise their rights with confidence, backed by European judicial support.
So, when does the period actually start? The ECJ did not set a single deadline; that is the point, according to Asufin. There is no fixed legal fact that determines a deadline because the court views the consumer’s awareness of the abusive nature as the key trigger. This ruling removes the pressure of a universal countdown and empowers borrowers to pursue refunds when appropriate.
From a consumer advocacy perspective, the ruling is seen as a win for those affected who can now move forward with greater assurance. The message from industry observers is that banks should respond proactively to this development to prevent overloaded courts and unnecessary delays.
Observers emphasize that the ECJ’s decision underscores the accountability of financial institutions when abusive provisions are identified in mortgage agreements and when there is established national jurisprudence about those abuses. Banks are expected to recognize this and adjust their practices accordingly, potentially ending a long-standing dispute over who pays the expenses.