If your mortgage contains ‘ground clauses’ you should know… The Government of Spain and bank institutions agree the end of Ground clauses

The Government of Spain and bank institutions have reached an agreement to finish with ground clauses. These clauses are the minimum interest set in mortgage contracts which prevents the mortgaged pay less when the EURIBOR is maintained at low levels. This decision is caused by the pressure of a popular lawsuit against 101 banks.

From October, claims about ground clauses will no longer be competence of the Commercial Courts to be covered by Civil Courts. So, now the waiting time to prosecute these cases will be reduced by more than 2 years.

The direct consequences of removing ground clauses will be that people will no longer pay illegal interests and the monthly mortgage payment will be recalculated according to the variable interest agreed in the contract. It will be a great saving on a monthly fee.

There is also another controversial consequence: there is a possibility to return the amount of money satisfied because of the illegal ground clauses. We will have to wait until the official publication of the agreement in to know if banks will have to refund the quantities received from May 9, 2013.

In addition, the Court of Justice of the European Union will pronounce soon on the retroaction of ground clauses. Very probably it will determine the refund of the amounts paid not already from 2013 as Supreme Court affirms, if not since the above-mentioned mortgages were created.

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