European Court of Justice rules that mortgage set up expenses are to be repaid in full to borrowers

Raymundo LarraĆ­n Nesbitt, July, 21. 2020

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By Raymundo Larraín Nesbitt
Lawyer - Abogado
21st of July 2020


The ECJ has delivered, once more, a severe blow to Spanish banks with its 16th of July ruling. It forces Spanish lenders to refund borrowers with all the set up costs in mortgage loans which clauses are deemed abusive. If there is a clause in a mortgage deed whereby it is stipulated that all mortgage set up expenses (and also cancellation ones) are to be paid solely by a borrower, and is deemed abusive, all such expenses need to be refunded in full to borrowers.

The EUs High Court ruling comes on the back of two queries raised from loans granted by BBVA and Caixabank.

As a result, it determines that if a clause is deemed abusive by a judge, a national judge cannot oppose the full refund of the setup charges to a borrower unless there is a national provision that opposes it.

Following this ruling, eight million borrowers stand to be refunded (in full):

  • Notary fees
  • Land Registry fees
  • Gestoria fees


The ECJs ruling also goes on to add that it expressly opposes borrowers acting as litigants to pay or co-pay the procedural expenses of such court cases on being brought forward. This proves key as well, as it frees up litigants to litigate without fear of retribution on having to pay for litigation expenses on bringing such cases forward. Needless to say, this new ruling opens the floodgate of even more litigation against Spanish lenders.

The ECJ has once more boldly corrected Spain’s Supreme Court jurisprudence on such matters.

Kudos to our EU overlords on its fair ruling.



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