Banks will have to pay costs of valuations for mortgages signed before Law 2019.

The Supreme Court charges financial institutions this cost, which is attributed to the consumer after the new rule.

These retroactive measures of the new law that will affect customers with mortgages already signed before 2019. Banks will have to pay 100% of the valuation (tasacion) costs on signed mortgages prior to the entry into force of the Real Estate Credit Act 2019. This has been established by the Supreme Court in a notified judgment at the end of January 2021, which is a new setback for financial institutions in the ongoing legal battle they have held these years at the expense of home loans.

However, such restitution shall not be automatic, but must in each case be declared by the Court. The Judge will decide that the specific clause of the contract is abusive. The consumer concerned is, therefore, required to go to the courts beforehand.

‘The Supreme Court rules that says that valuation costs, where Law 5/2019 of 15 March, governing real estate credit contracts, is a matter for the bank and not for the consumer,’ the High Court notes in a note. Thus, it also recalls that «this doctrine implies that consumers are entitled to the refund of all expenses paid for the registration of property, management and appraisal, as well as half of the notary expenses». He adds that only the Stamp duty tax (AJD) has to be paid by the client on pre-new mortgages.

This judgment only affects loans signed before that 2019 rule, since the Real Estate Credit Act passed just under two years ago does provide that the valuation must be paid by the borrower, that is, the consumer.

In this way, the High Court lays down a new doctrine which includes that clients are entitled to the restitution of all expenses paid for the registration of property, management and valuation, as well as half of the notary expenses. And this means that, with this newly known judgment, mortgagers will be able to claim from their entity the refund of all these expenses, to which the valuation has now also been added. To make this decision, the Supreme has resolved an appeal regarding a judgment in the degree of appeal of the Provincial Court of Cáceres in a case starring Liberbank.

«This is important news for mortgages signed before June 2019. It is the bank that must face 100% of the valuation expense on all loans prior to the current Real Estate Credit Act (in force since June 1, 2019),» says attorney Jose Lopez. A ruling that comes preceded by several statements, in lower instances, that had already been pronounced in this regard. ‘With that judgment, 100% of the costs of appraisal, registration and gestoria, as well as 50% of the notary expenditure, may be claimed for that unfair term,’ he adds.

Axarquia Solicitors
Jose M. Lopez-Avalos – Solicitor
Tel. 952 901 225 – mail@axarquiasolicitors.com