On 27 January 2021 the First Chamber of the Supreme Court handed down a full-bench judgment setting out in detail the costs that the financial entity may pass on to its customers in a loan secured by a mortgage.
While it is true that the entities have committed significant abuses over a long period, charging customers the whole of the transaction costs, the Supreme Court makes clear that the declaration of nullity of a clause in a contract does not prevent the customer from being liable for some of the costs where this is expressly provided for by another rule.
For all these reasons, the date the contract was entered into will be decisive, as will analysing both the clause and the rules in force. By way of summary, we set out below which are the COSTS THAT CUSTOMERS CAN RECOVER:
- NOTARY
These must be paid by the “interested party”. In contracts prior to Law 5/2019, both the bank and the customer have an interest in the loan and any amendments to it, so the costs must be split in half. In mortgages signed from June 2019, by contrast, the notary fees (original deed), agency (gestoría) and registry costs fall entirely to the bank, and only the valuation and any copies the customer requests are for the customer’s account.
As an exception, in mortgage cancellation deeds the only interested party is the customer, so the customer must meet that payment.
- LAND REGISTRY
These costs must be paid by whoever registers their right. The mortgage is a security registered in favour of the lender, so the bank is responsible for paying them.
- AGENCY (GESTORÍA)
For loan contracts signed before March 2019 (the date Law 5/2019 of 15 March, governing Real Estate Credit Agreements, was approved), the bank must refund the whole of the amount if the clause is declared void.
As regards contracts entered into after that date, the criterion is that the arrangements are carried out for the benefit of both parties, so the cost must be borne in half.
- STAMP DUTY (AJD)
In loans prior to November 2018 the Stamp Duty (AJD) fell on the customer and is therefore not recoverable. In those after RDL 17/2018 and under Law 5/2019, the Stamp Duty (AJD) is paid by the bank.
- VALUATION
Here we find a situation similar to that of the agency (gestoría) costs. Contracts entered into before Law 5/2019 of 15 March, governing real estate credit agreements, allow the customer to recover the whole of the cost if the clause is declared void.
As for contracts of a later date, the current rule expressly provides that this amount falls to the customer (the borrower).