Bank order to refund mortgage setup costs

A court in Barcelona ruled earlier this week that CaixaBank must refund mortgage costs paid by a client, namely notary, registry and administrative fees as well as stamp duty (Impuesto de Actos Jurídicos Documentados/ADJ in Spanish).

In total, the bank must refund €5,237 as well as interest accrued since the payments were made. It has also been ordered to pay costs. The client signed a mortgage agreement with CaixaBank in December 2015 and the contract included a clause obliging the client to pay all costs associated with the mortgage.

The client later filed a claim requesting the clause be declared null and void, plus a refund of all costs: €630 in notary fees, €409 for registry fees, €279 for administrative fees and €3,919 in stamp duty.

Arguing that it should have to pay any costs, CaixaBank defended the transparency of the clause and claimed it was “clear and perfectly understandable”, and that the client was aware of the costs before signing the contract.

Legal precedence for Spanish mortgage setup cost claims

The judge based the decision on two previous court rulings. One in Santander that pointed out that the most important thing in this type of clause is not transparency but whether there’s imbalance between the two sides. The judge ruled that the clause in question stated that the client was responsible for all costs associated with the mortgage. “This alone makes it an unfair clause. It is unacceptable to make the borrower pay all costs,” said the ruling.

The court in Barcelona also cited a ruling by the Supreme Court, which stated that “it’s incomprehensible that the lender should not pay any of the costs. In the case of stamp duty, the lender is liable for payment of the tax and associated documentation. This is stated in the law but not in the clause.”

The judge states that “once the clause is declared unfair because it allows an unjustified imbalance between the two sides, it must be considered non-existent. The rest of the contract remains valid, however, because the clause was obviously not an essential part of it.”