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What is the ground clause and how to claim it?

Posted by Michel B. on 02/08/2019

This is a clause that was included in some mortgage loans with a variable interest rate and that limited the downward variation. That is, it prevented the applicable nominal interest rate from lowering an established percentage (the el floor ’). Thus, consumers affected by this clause have been charged a much higher interest rate than they would have had to pay without this measure.

When did it apply?

It applied to consumers who had this clause in their mortgage as long as the sum of the reference rate (Euribor or others) and the differential were lower than the established land clause.

Is the ground clause illegal?

The ground clause is illegal from June 16, 2019, the date of entry into force of the new mortgage law, but only for home equity loans made after that date.

Can the nullity of the ground clause be achieved?

The jurisprudence of the Supreme Court allows the nullity of the clause to be achieved by establishing a transparency control that banks or financiers had to pass in order to maintain the clause. That is, it must be demonstrated that the bank specifically informed the consumer before hiring both the existence of the clause and its practical consequences during the term of the loan.

Can you still claim?

The ground clause can be claimed as long as four years have not elapsed since the loan was canceled.

How to claim the ground clause?

First, a claim must be made to the Customer Service of the bank or financial institution in question, which will have three months to respond. To this extrajudicial claim procedure established by Royal Decree Law 1/2017 (procedure already expired, but banks continue to accept and respond in any case), the bank will answer by accepting or denying the cancellation of the clause, and proposing or not the return of the amounts charged more for the application of it.

If there is no proposal to cancel the clause and return the corresponding amounts, a lawsuit must be filed. If the bank makes a return proposal, the consumer is free to accept it and give up claiming, but can also reject it and bring the lawsuit.

Should we continue to look at this aspect when signing a new mortgage?

As of June 16, 2019, the clause is illegal, so it cannot be included in any contract after that date.

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