In December 2015, a landmark ruling changed the mortgage landscape in Spain. The Organization of Consumers and Users (OCU) and the Supreme Court declared that borrowers should not bear all the costs associated with formalizing a loan contract. This decision dismantled a widespread practice and opened the door for thousands of homeowners to pursue what was rightfully theirs, as noted by OCU on its site.
The Supreme Court decision underscored that charging clients for the entire set of formalization expenses was abusive. Yet, it did not spell out exactly how these costs should be shared between banks and borrowers. OCU explained that, while the prevailing trend had tilted toward banks covering all formalization costs, several public responses across Spain reflected a range of interpretations and experiences by consumers.
By January 2019, a series of Supreme Court rulings and a decision by the Court of Justice of the European Union (CJEU) pinpointed which expenses borrowers could reclaim. The clarified scope included the following items: real estate registration, management, and valuation costs in full, and half of the notary fees. These determinations formed the basis for next steps in many households seeking redress.
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All expenses related to real estate registration, management, and valuation were identified as reclaimable.
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Half of the notary expenses were deemed recoverable.
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Until when can customers claim these expenses?
OCU states that a five-year statute of limitations applies to these legal claims. However, debates persist about when that period begins. In some cases, banks rejected requests by arguing that the deadline had passed. With Awaited guidance from OCU and the ECJ, many observers argued that the calculation starts on January 23, 2019, the date when the Supreme Court clarified the allocation of expenses. If this interpretation holds, the window for reclaiming costs would extend until January 24, 2024.
Bad news for mortgage holders: Implications in April 2024
Claim mortgage costs through OCU
Those who signed an agreement before June 16, 2019, when the Real Estate Loan Act came into force, could pursue these reimbursements through OCU. OCU’s guidance indicates the following benefits to those who file a claim through their mechanism:
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Legal consultancy from lawyers who specialize in mortgage-related issues.
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Coverage of all judicial and extrajudicial proceedings up to the final judgment or a definitive extrajudicial settlement.
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Possibility to claim abuse of other provisions, such as IRPH, single-premium life insurance, or floor provisions within the same procedure.
Rulings from the Supreme Court and the CJEU have created opportunities for thousands of consumers to challenge abusive mortgage clauses and recover costs that were unfairly charged. This momentum continues to influence the discourse around mortgage rights not only in Spain but also in how similar consumer protection cases are viewed across international jurisdictions.
For readers in Canada and the United States, the central takeaway is the principle that borrowers may have recourse when contract terms shift burdens onto the consumer. While local laws differ, the trend toward greater transparency in loan costs and stronger consumer protections is evident in many jurisdictions, underscoring the importance of professional guidance and timely claims when terms are found to be abusive. Consumers are encouraged to consult trusted consumer groups, legal counsel, or official regulatory channels to understand their options in their own countries.