The so-called “floor clauses” is a current and unstoppable phenomenon affecting millions of clients in the whole Spanish territory. Today, we are going to stop in something that is not very well known by the clients and it is, how banks treat their clients who are affected by floor clauses in their mortgages.
Since 2015, some banks contacted clients that had mortgages with floor clauses, with the sole purpose to cancel such clause, “gratis et amore” – giving back by giving thanks”.
Behind this initiative, a particular intention was hidden; banks offered to cancel the floor clause in exchange for the client to renounce to future claims against the bank.
Hence, in accordance to its offer, the bank erased a clause that already in 2015 had been declared null many times by the courts, with the sole purpose to assure that the amounts overpaid by the client up to date (2015) would never be reclaimed by their clients.
This situation was even more advantageous for the banks as a consequence of a judgment of 22nd December, 2016; in this ruling, the TJEU stated “that national courts could not decide to place the nullity of the floor clause at a later time than that of the date of the mortgage loan agreement. Therefore, this TJUE judgement modified the Doctrine of the Spanish Supreme Court that in its ruling, 9th May 2013 stated that “the clients that signed with the bank such agreement, could not claim for the overpaid amounts in their mortgages”.
Notwithstanding, I have to say that not everything is lost yet. Different Judges and Courts in Spain have reached to the decision that those agreements signed with the bank are void.
In this sense, the Provincial Court in Asturias in its Sentence Nº111 of 17th March 2016 said that the agreement offered by the bank `Caja Rural Asturias´ which was offered in a private document and signed by the client, in virtue of which, such the floor clause was cancelled and reduced a the floor clause which was initially signed in a Public Notary Deed, therefore it is null. This verdict comes with the solid reasoning that a modification is null whether, null was also its floor clause, hence when in a contract there is a null clause, this and its changes should be repealed from the legal system.
In a similar decision, the Provincial Court of Zaragoza in its Sentence 478, 11th October 2016 add also that “we must conclude that it is impossible to validate a null clause for another more favourable to the interest of the consumer, even, when this clause contains the refusal to the nullity action that could correspond to him – quod nullum est nullum producit effectum – what is null, it is null and it does not have any effect”.
It is curious, that pioneering sentences in defense of consumer rights were initiated in the north of Spain (Asturias, Zaragoza regarding the nullity of private agreements), either Barcelona in the nullity of mortgage executions’ or Vizcaya and Guipuzcoa with regards to the nullity of the IRPH which, we will talk about another day. All these court decisions have been expanded to the rest of the courts in all Spanish provinces.
Summarising, if you have signed these kind of private agreement, in which, your floor clause is cancelled, but you have to renounce to claim to the bank, bear in mind that these agreements are being declared null by the Spanish Courts and you can still recover your money.
Del Canto Chambers offer you advice on your mortgage property, we should respond you within 24 hours and we would check your mortgage contract within a reasonable time frame, contact us to check if you have floor clauses in your mortgage contract.
Antonio Gabriel Aguilera
Expert in Banking Law and Money Laundering Prevention.