An unexpected European decision is bad news for Spanish holiday homeowners, says León Fernando Del Canto
- Advocate General’s opinion that the temporal limit on the effects of the invalidity of “floor” clauses included in mortgage loan agreements in Spain is compatible with EU law is bad news for Spanish homeowners.
On 13 July the Advocate General gave a surprising opinion that the temporal limit on the effects of the invalidity of “floor” clauses included in mortgage loan agreements in Spain is compatible with EU law (see the Joint Cases of C-154/15 Francisco Gutiérrez Naranjo v Cajasur Banco S.A.U., C-307/15 Ana María Palacios Martínez v Banco Bilbao Vizcaya Argentaria SA and C-308/15 Banco Popular Español SA v Emilio Irles López and Teresa Torres Andreu).
These clauses, which were used by the majority of banks in Spain, control the amount of interest being paid on a mortgage. This means that if the interest rate falls below the “floor”, as defined in the agreement, the consumer must still pay the set interest rate, leaving them unable to benefit from the dropping interest
