Extension of Time Limits and Consumer Protection in Cases of Abusive Mortgage Clauses

The judgment of the Court of Justice of the European Union (CJEU) of January 25, 2024 marks a significant change regarding the limitation periods for consumers to request restitution of mortgage costs from banks due to abusive clauses. Therefore, in this article we will examine in depth the extension of abusive mortgage costs by banking institutions.

1.- Background and Legal Context

This decision arises as a result of various preliminary questions raised by the Provincial Court of Barcelona in December 2021, related to claims filed by different users against several banks. These claims sought the return of costs associated with notaries, registration, and mortgage management, alleging the presence of abusive clauses that invalidated them. Caixabank, BBVA, Banco Santander, and Banco Sabadell opposed this restitution of mortgage costs, arguing the limitation of the right to request such reimbursement.

On January 21, 2016, the first judgment was issued in which the Supreme Court determined that any clause in mortgage contracts imposing on the client payment of one hundred percent of the costs derived from the constitution of the mortgage loan was abusive and, consequently, null and void. Subsequently, in a second judgment, the High Court clarified that notary, agency, and property registration costs should be shared between the bank and the consumer. However, in July 2020, the CJEU ruled that banks must reimburse all mortgage costs charged abusively, invalidating the cost-sharing arrangement established by the Supreme Court in 2019.

2.- Determination of the Limitation Period: CJEU Perspective

The Supreme Court, in line with CJEU case law, maintains that the action to declare an abusive clause null and void is not subject to limitation and cannot be remedied due to its nature as absolute nullity. However, the restitutionary action arising from this nullity is subject to a limitation period, provided that the principles of equivalence and effectiveness are respected.

In this regard, it is necessary to analyze the limitation period from various angles, considering its duration, application, and the moment when its calculation begins. To ensure the principle of effectiveness, the limitation period must be sufficiently broad so as not to hinder or make impossible the exercise of consumer rights under Directive 93/13. The CJEU emphasizes that the commencement of the limitation period can only be considered compatible with the principle of effectiveness if the consumer could have had knowledge of their right to claim prior to the start of the calculation of this period or its expiration. Thus, the CJEU concludes that the limitation period for the restitutionary action for mortgage costs does not comply with the principle of effectiveness, since the consumer’s knowledge of the abusiveness of the clause is not sufficient, but they must also know the right granted to them by Directive 93/13.

In summary, the CJEU establishes that the last payment of costs arising from an abusive clause cannot be considered as the start of the limitation period.

Furthermore, the CJEU rejects the idea that national case law on limitation constitutes sufficient proof of the consumer’s knowledge to exercise their right to claim and that this would mark the start of the limitation period for the restitutionary action. It is argued that the consumer is always in a position of “inferiority” vis-à-vis the bank and, therefore, it cannot be presumed that they are aware of national case law, however well-established such case law may be.

This position contrasts with the limitation period determined by the Supreme Court judgment of January 24, 2019, which would have allowed banks to argue that the period to claim had expired on January 24, 2024, since the Civil Code provides five years to claim (10 years in the case of the Civil Code of Catalonia).

3.- Impact and Protection for Consumers

In conclusion, the recent CJEU judgment provides greater protection to consumers, allowing them to claim mortgage costs without banks being able to argue that the period to do so has expired, as they are currently doing in many of their responses to their clients’ claims. This is especially relevant for those affected with mortgages prior to June 2019, the date when Law 5/2019, of March 15, regulating mortgage credit contracts came into force, which transferred almost all costs to the banks. All to the benefit of consumers harmed by abusive clauses regarding mortgage costs, floor clauses, and others of similar characteristics.

4.- How Can We Help You?

The Banking and Financial Law Department of In Diem Abogados, specialized in mortgage clauses, offers legal advice and guidance for those affected by abusive mortgage clauses.

Contact IN DIEM Abogados 24 hours a day, any day of the week, without obligation.

We guarantee the best possible outcome, whatever your case.

• Personalized and professional service
• Assistance throughout the entire judicial process
• 24-hour contact with your expert criminal lawyer
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Author: Casimiro Galán Garrido

Lawyers specializing in Abusive Mortgage Clauses: Málaga, Marbella, Seville, Madrid, Las Palmas de Gran Canaria, Almería, Huelva…

Furthermore, IN DIEM Abogados has extensive experience and a high degree of specialization in the area of Banking and Financial Law, offering advice regarding the extension of time limits and consumer protection in cases of abusive mortgage clauses, providing its clients with personalized assistance at all times.

IN DIEM Abogados has a team with experience in previous roles as Magistrate-Judge, State Attorney, Prosecutor, or University Professor, which will provide you with peace of mind and security, having the best team, competitive and highly prepared to achieve your objectives and meet your needs.

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