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Based on this agreement, Gallego & Rivas has offered to study, free of charge, the documentation of owners who may be affected by a "floor clause" in their mortgages. At the end of this article, we will explain how those affected can access this service.
First of all: What is a “floor clause”? A mortgage is said to have a "floor clause" when, in a variable interest mortgage, there is a clause in the Mortgage Loan Deed that establishes that the interest on this mortgage cannot be less than a certain threshold.
In other words, in this case, the mortgage cannot benefit from a low interest rate and from the successive drops that may occur, since the minimum interest rate is "locked in" and no interest rate fixed below it can be applied. the one established in the «floor clause». For several years, the Euribor interest rate has been very low and these clauses have represented considerable losses for many clients.
The Supreme Court appeals to the economic convulsion that could represent for the banks the return of the total of the amounts unduly charged to the clients before May 9, 2013 since, taking into account that there are thousands of mortgages affected by a «floor clause », the banks would be forced to return billions of euros to their customers.
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How to claim the floor clauseThe floor clause is undoubtedly one of the most well-known banking terms today, and it is not for less, but do we really know what it is? Is it easy to know if our mortgage contains this type of clause? How can we claim a refund of what we have overpaid during this time? Next, we will try to solve all these doubts.
Let's start by defining what the floor clause is, which is the one that stipulates a minimum interest on our mortgage, that is, we must pay that minimum, even if the index to which it is linked is much lower. However, the opposite does not happen since there is no upper limit if the index itself increases exponentially.
The extrajudicial route basically consists of claiming the amount of money that the bank owes us, reaching an agreement and putting an end to the conflict. However, although this solution seems the most logical and sensible, it is almost never carried out successfully since banks do not usually return the money unless there is a sentence that dictates it.
And on the other hand, the judicial route, which is more arduous and more complicated for the individual, but which reports a much higher percentage of success since, after several judgments of the Mercantile Court and, above all, a judgment of the Supreme Court of May 9, 2013 (which declared the floor clauses null), the sentences are mostly favorable.
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You can find the floor clause (Clausula Suelo) in your mortgage deed. In Spanish, this document is called “Deed of Mortgage Loan”. The document was signed before a notary public at the same time the house was purchased.
Once the mortgage deed is signed before the notary, the bank takes it to the property registry to register it. Once the mortgage deed is registered, the bank receives it and must be picked up by the client or their lawyer.
You can get a list of the payments made since you signed the mortgage on the bank's website or at the branch where you have the mortgage. If the interest rate has dropped and your mortgage has not, you probably have a mortgage floor clause.
You have to submit a form to your bank with a copy of the mortgage deed and the latest receipt confirming the monthly mortgage payment. In addition, you can submit an estimate of overpayments. The bank is not required to respond to you, but it usually responds to its customers by approving or denying the claim. If the bank does not cancel your floor clause of the mortgage and returns the money you have paid in excess, you have to initiate a legal claim.
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The floor clause is a stipulation established in variable-rate mortgage loans that limits the variability of the agreed interest rate. For example, if you have a variable interest rate loan based on EURIBOR plus 1% and the bank imposes a stipulation that sets the minimum interest rate to be paid by you at 3%. Today, the EURIBOR is below 0%, so you should pay 1% on your mortgage loan, but due to the limit established in the floor clause, the minimum rate you will pay will be 3%, which does not seem fair at all, right? TRUE?
Most mortgage loans in Spain are variable rate mortgage loans. And most of these loans are based on the EURIBOR rate. And most of these loans were made in the real estate boom that finally blew up in 2008.
If the Floor Clause is abusive, this cannot affect the consumer in any way. This means that the loan will work as if the floor clause had not been applied from the beginning. It means that the floor clause has never existed because it is null and void from day one.
