Clausula Suelo – Floor Clauses in Spanish Mortgages
Before the Judgment of the Court of Justice of the European Union of December 21, 2016, Banks offered agreements to their clients with a floor clause by which the financial entities agreed to eliminate this clause from the mortgage without returning the amounts already overcharged and forcing the mortgage holder to sign that they could not take further legal action to, mainly, request that amount they had already overpaid for the floor clause.
Until April 2018, the Spanish Supreme Court declared that these modifications or novations were not effective, allowing the option for the consumer to take action to declare the floor clause null and claim the return of all amounts overpaid. It was in April 2018 when the same court issued a new decision and ruled that these agreements constituted a transaction covered by the principle of autonomy of the will and freedom of contracting, so the agreements are valid and, consequently, the choice not to take further legal action was also valid.
The Journal of the European Union has recently published the beginning of the file of the preliminary ruling against the doctrine of the Spanish Supreme Court on the validity of agreements that modify or delete the ground clause waiving subsequent actions, raised by the Court of First Instance Nº3 of Teruel. This Court asks whether this practice violates the consumer principles of the European Union.
There are other three preliminary rulings being submitted by Spanish Courts on this matter.