Declared null the limitation interest clauses in mortgages. Asking the banks the refund of the overpaid to them

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By Andreu & Alenda Abogados- legalservice@andreualenda.com

The “clausulas suelo” , translated as limitation interest clauses, were included in most variable home mortgages, to put a minimum interest rate that the client should pay, regardless of what the Euribor eventually lowered. Variable interest was calculated adding a rate to the Euribor (the main benchmark for most mortgages in Spain), and this limitation prevented those affected from benefiting from the Euribo’s fall.
Petitions were filed in court asking this type of clauses to be declared invalid or null. In May 2013, the Spanish Supreme Court considered these clauses abusive, on the understanding that consumers had not been informed of the economic and legal burden imposed on them and they would no longer apply as of May 9, 2013. This ruling limited the maximum retroactivity so that its nullity only had future effects, so consumers would not be repaid what was previously paid due to this clause up to that date.
Since that judgment, consumers started asking the banks to reimburse them the sums paid for the excess interest resulting from the application of the floor clauses after May 9, 2013.
But what happened to all those interests that were calculated applying the clauses before that date? Consumers could not claim the reimbursement of it. An appeal was filed before the Court of Justice of the European Union to rule on whether or not such a limitation of compensation infringes European consumer protection rules. The Court of Justice interprets EU law to make sure it is applied in the same way in all EU countries, and settles legal disputes between national governments and EU institutions.
There was a preliminary ruling giving reason to the financial entities, and this discourage all consumers as judgements usually respect this preliminary reasoning although it is not binding.
The Court of Justice of the European Union has ruled this Wednesday, December 21st, that financial institutions should finally reimburse the consumers affected by the clauses with the full amount that has been overcharged since the beginning of each mortgage contract , and not only from May 9, 2013, as determined by the Supreme Court.
From when can the sentence be applied?
It has immediate effect.
Who can claim against the bank?
Any client who has not yet claimed, either before their entity or before the courts, may demand the refund of the amounts even if your mortgage has already being paid, as long as it was not four years ago.
Will the banks refund me if I do not make a claim?
No, the banks will only refund you if a petition is filed. They will study case by case, to verify whether the client has accepted the formal conditions of the mortgage and the good faith rules hasn’t been broken. They will try to avoid payments.
These petitions can be filed before your financial entity or in court.
Is the refunded amount subject to taxes?
Part of what the bank returns to those who overpaid for “ land clauses” as a result of the ruling of the Court of Justice of the European Union (CJEU) should go directly to the Inland Revenue. This point affects those who have a habitual residence acquired before 2013 and, therefore, deduct the principal sum and interest of the mortgage destined to pay it, in their yearly tax forms. Upon receipt of the refund, it will be found that in the corresponding years they benefited from a deduction higher than that which they were entitled to. We recommend you to contact your tax adviser to deal with this matter as all the previous tax forms from the last four years, will need to be modify.
Andreu & Alenda Lawyers has been taking actions against the banks since May 2013 .If you are in this situation and you think you deserve to be compensate, do not hesitate to contact us in C/ Caballero de Rodas, nº 27, 2º C, phone 96 692 77 99 or by email legalservice@andreualenda.com