What Are Mortgage Costs?
When you approach a bank to apply for a mortgage, not everything is transparent, and the costs have not always been distributed fairly. In fact, if your mortgage predates 2019, there is a good chance you paid certain costs that were NOT yours to bear. These are precisely the costs you incurred when taking out your mortgage, and which you may now be able to RECOVER.
Why Can I Reclaim Mortgage Costs?
If you look at your mortgage loan agreement, you may find that it does not always appear under the heading "MORTGAGE LOAN".
For that reason, in this article we will briefly explain the types of contracts you may come across, and how we can help you bring a claim. Your mortgage loan may be labelled as a "Subrogation", "Subrogation and Increase", "Subrogation and Modification", or "Sale and Subrogation of Mortgage Loan".
In all of these cases, we need to examine the contractual clauses carefully, since in law what matters is the interpretation of the contract and its contents. That is why we help you understand your mortgage loan agreement, whatever it may be called.
The key factor determining whether you can bring a claim is who bore the mortgage costs and how this is reflected in the contractual clauses. To assess this, we need to review the contract in detail and check whether it specifies that the mortgage costs are to be borne by the borrower. If so, you will have been required to cover an expense that was not rightfully yours, and we can help you claim those mortgage costs back.
However, if your mortgage loan agreement makes no reference to the borrower and instead refers to the buyer, it is likely that the bank did not attend the signing of the mortgage deed, and it would be necessary for an expert to review the clauses of your mortgage loan agreement.
In short, whenever the costs clause charges the mortgage costs to the borrower, you may have grounds to bring a claim.
How can I claim mortgage expenses?
How long do I have to claim mortgage expenses?
Section 15 of the Barcelona Court of Appeal issued ruling 348/2024, dated 15/03/2024, incorporating the judgment handed down by the Court of Justice of the EU (CJEU) on 25 January, has ruled against Banco Sabadell for including unfair terms in mortgage loan agreements dating from 2006, and establishes that the limitation period begins in January 2017, when relevant information about these clauses was made public.
Those affected will receive a refund of the unlawfully charged expenses plus an additional penalty of €1,266. The bank argued that the claim had already become time-barred in 2016, but the court rejected this argument. The decision is not yet final and may be appealed within the next twenty days. One judge issued a dissenting opinion in favour of the bank, suggesting that those affected had been aware of the situation since 2013, which would mean the action is already time-barred.
What documents do I need to begin a claim for mortgage expenses?
To begin a mortgage expense claim, you will need documents evidencing payment of the mortgage-related costs:
Documents required to claim mortgage expenses:
- Photocopy of both sides of the mortgage borrower's national identity document (DNI)
- Copy of the mortgage deed
- Copy of the invoice from the administrative agency (gestoría) that processed the mortgage file
- Copy of the notary's fee invoice (these are split 50/50)
- Copy of the property valuation invoice
- Copy of the Land Registry fees invoice
That said, at this law firm specialising in banking claims, and mortgage cost claims in particular, we understand that clients do not always have all the invoices they need to pursue a claim.
That is why one of our services is helping clients recover their invoices so they can claim their mortgage costs and get back what is rightfully theirs.
Even so, it would be very helpful to our team if you are able to provide the invoices for the following costs when pursuing your mortgage claim:
- NOTARY FEES
- LAND REGISTRY FEES
- PROPERTY VALUATION FEES
- ADMINISTRATIVE AGENCY FEES
The best course of action is to contact our solicitor to instruct a claim against your bank:
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How can I challenge unfair clauses in my mortgage agreement?
Numerous court decisions have addressed this issue. The most significant in recent years is the ruling of 16 July 2020 in joined cases C-224/19 and C-259/19, which established that once a clause is declared null and void, the corresponding amount must be restored to the borrower, ensuring that any payment that should never have been charged is refunded in full.
Below is an extract of the most relevant ruling of the Court of Justice of the EU (CJEU) on this matter:
"Consequently, it must be considered that, in principle, a contractual term declared unfair never existed, and therefore cannot produce effects against the consumer. Accordingly, a judicial declaration that such a term is unfair must, in principle, restore the factual and legal situation in which the consumer would have been had that term not existed (ruling of 21 December 2016, Gutiérrez Naranjo and Others, C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraph 61).
53 In this regard, the Court of Justice has held that the national court must draw all the consequences which, under domestic law, follow from a finding that the term in question is unfair, so as to ensure that the consumer is not bound by that term (ruling of 30 May 2013, Asbeek Brusse and de Man Garabito, C-488/11, EU:C:2013:341, paragraph 49). In particular, the obligation on the national court to disapply an unfair contractual term requiring the payment of amounts that prove to have been unduly paid gives rise, in principle, to a corresponding restitutory effect in respect of those amounts (ruling of 21 December 2016, Gutiérrez Naranjo and Others, C-154/15, C-307/15 and C-308/15, EU:C:2016:980, paragraph 62). 54 Having recalled those considerations, it should further be noted that the fact that a contractual term declared unfair must be regarded as never having existed justifies the application of provisions of national law that may govern the allocation of the costs of establishing and discharging a mortgage in the absence of agreement between the parties. Accordingly, if those provisions place all or part of those costs on the borrower, neither Article 6(1) nor Article 7(1) of Directive 93/13 precludes the consumer from being denied restitution of the portion of those costs which they are themselves required to bear.
55 In light of the foregoing considerations, the answer to the first to sixth questions referred for a preliminary ruling in Case C-224/19 and to the two questions referred for a preliminary ruling in Case C-259/19 is that Article 6(1) and Article 7(1) of Directive 93/13 must be interpreted as precluding a national court, in the event that an unfair contractual term is declared void, a term which requires the consumer to bear the full cost of the creation and cancellation of a mortgage, from refusing to order the reimbursement to the consumer of the amounts paid by virtue of that term, unless the provisions of national law applicable in the absence of such a term require the consumer to bear all or part of those costs."
This position has been consistently upheld by the Supreme Court, including in the Plenary Judgments 44, 46, 47, 48 and 49/2019 of 23 January.
How would mortgage costs then be allocated?
- Notarial fees: 50%.
- Land Registry fees: 100%
- Administration/management fees: 100%
- Valuation fees: 100%
