The supreme says; mortgage expenses are shared
The Supreme Court insists that the notary cost of a mortgage is shared between bank and client.
The Civil Chamber of the Supreme Court has ruled on the recent ruling of the Court of Justice of the European Union (CJEU) of July 16 on the abusiveness of mortgage expenses on understanding that they imply harm to the consumer and, therefore, the clause must be annulled.
The current financial sector believes that the European ruling questions the distribution of the expenses established by the High Court in Spain.
In said ruling, the Supreme Court insists that “the First Chamber ratifies its doctrine on the nullity, as abusive, of the clauses that charge the borrower with the expenses and taxes of the mortgage loans, insofar as they imply, to the detriment of the consumer, an imbalance important between the rights and obligations of the parties to the contract. Regarding the consequences of nullity, the sentences of the Plenary of January 23, 2019 have been confirmed by the recent judgment of the CJEU of July 16, 2020 ”. According to the ruling, “once the clause that attributed all the expenses to the consumer borrower has been declared null and void as abusive, the court must begin to analyze who, in accordance with the legal and regulatory rules, corresponded to satisfy each of the disputed expenses , which, in this case, referred to the Tax on Documented Legal Acts, notarial expenses and registry expenses ”.
In both the 2019 and 2020 decisions, the Supreme Court favors a distribution of the expenses of the constitution of mortgage loans between the client and the bank. It clarifies that the consumer must pay the Tax on Documented Legal Acts (AJD), as well as 50% of the notarial fees, while the financial entity must assume the other half of the notary's expense and 100% of the cost of registering the mortgage. The sentence, however, does not analyze the appraisal of the home or the expense of the agency.
“The Chamber resolves the appeal by applying the norms of national law in force on the date of constitution of the loan, according to which the main taxable person obliged to pay the Tax on Documented Legal Acts was the borrower. On the other hand, the notarial expenses generated by the granting of the deed correspond in half to the lender and the borrower, since both have the status of "interested parties" that supports, in the Notarial Regulations, the payment of said expenses: the consumer by obtaining the loan and the bank for the mortgage guarantee. Lastly, the expenses of the property registry correspond to the bank, as it is the entity in whose favor the mortgage guarantee is registered, in accordance with the provisions of the property registrars' tariff ”, clarifies the Supreme Court, who insists on that "the CJEU has fully endorsed what was agreed in its day by the Civil Chamber of the Supreme Court regarding these expenses."
The Supreme Court agrees with the bank and clarifies that the judgment of the CJEU of July 16, 2020 "establishes the doctrine on the matter, coinciding with the jurisprudence of this Chamber", by establishing that "the fact that it should be understood that a clause contractual declared abusive has never existed justifies the application of the provisions of national law that can regulate the distribution of the expenses of constitution and cancellation of mortgage in default of agreement between the parties ”.
Thus, he again insists that:
The AJD must be assumed by the consumer, since he is the taxpayer.
Registration is assumed by the bank, since if the loan is not registered, there is no mortgage guarantee.
The notary must be divided equally to benefit both parties. In addition, the cost of canceling the mortgage falls on the borrower, as he is interested in the release of the lien, while copies of the deed will only be paid by the consumer if he requests them.
The position of the High Court does not coincide with other recent judgments, such as last week of the Provincial Court of Las Palmas, which ruled that the bank should bear all the costs of setting up the loan at 100%, except for the AJD; that is, the notary, the registry and the appraisal. On the other hand, in another, the Court of First Instance nº18 BIS of Malaga established the distribution of notary at 50%.