How to claim back mortgage expenses from Spanish banks
Here's how people who bought a house in Spain before 2019 and were made to pay all the mortgage costs by their bank can now claim up to €1,500 back from them, but keep in mind the deadline is looming.
If you purchased a Spanish property before 2019 and you paid for all the mortgages expenses, it’s likely that you’re eligible to claim some or them back, even if you’ve already paid off the mortgage or sold the property.
In 2015, Spain’s Supreme Court and the Court of Justice of the European Union ruled that Spanish banks that charged customers these "excessive" mortgage expenses (gastos de formalización) should reimburse them.
The deadline to file a legal claim was set for January 23rd 2024, although there's a possibility this could be pushed back until April.
So how do you go about claiming back mortgage expenses from Spanish banks? Here's what you need to know.
Which mortgage expenses can I claim back in Spain?
Following the court rulings, there are several different mortgage expenses you can claim back in Spain.
Notary fees - All mortgage documents must be notarised. To do this, you go to a notary's office, who generally charge between 0.2 percent and 0.5 percent of the value of the property.
Appraisal fees - Any fees you paid to an independent appraiser for a valuation of the property can also be claimed back.
Administration fees - These are the general admin fees that come from putting together and maintaining the mortgage, usually carried out by the bank.
Registry fees - Once mortgages are granted and the property purchased, you have a legal obligation to register it in the land registry. The fee for doing this is usually somewhere between 0.5 percent and 2 percent of the mortgage liability, and can also be reclaimed.
Which documents do I need to claim?
In essence, as many as you can. The more evidence you have the better.
The main thing you'll need is the mortgage deed. If possible, try and find the specific clauses that outline the expenses you are claiming back.
Any invoices or payments receipts, plus mortgage renewal or subrogation documents will also be handy.
How does the legal claim work?
There are basically two ways to do this: getting a lawyer and filing a lawsuit (vía judicial), or trying to do it yourself through the bank's customer services department (vía extrajudicial).
Many people start off trying to make the legal claim themselves, but ultimately end up needing the support of a legal expert - this is especially true if you don't speak Spanish, and, if you do, even for experienced non-native speakers the Spanish legalese and banking jargon can be difficult to keep up with.
However, it's worth noting that when these mortgage expenses are claimed, the refund you get is not usually very high.
Obviously, this depends on the loan agreement, the price of the property in question, and so on, but in most cases it is possible to recover between €700 and €1,500 and you'll have to deduct any legal fees you owe from that (if you go for the vía judicial).
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
How do I claim by myself?
If you decide to get a lawyer they will handle everything, but if you don't and prefer to go the vía extrajudicial, this is essentially making a complaint to your bank's customer services department (known as 'servicio de atención al cliente' in Spanish).
It is recommended that you do this physically, in branch, as you can get stamped copies of any documents proving that you have submitted a claim. The document should include both the loan number and the request for the specific clauses to be cancelled and the amount to be refunded.
The bank's customer service department is obliged to provide a response in less than two months.
There are reports that many banks decide to pay back their customers who appealed the extrajudicial way if they deem that the amount is not high enough for them to risk a lawsuit if they refuse to cough up.
Therefore, beginning the claim directly and extrajudicially with your bank should be your first step in the majority of cases, as there's a considerable chance of success and you will also save on legal costs.
What happens if the bank denies my claim?
If the bank denies your claim (or doesn’t respond within two months) and you want to continue, you'll need to then find a lawyer and go down the legal route.
The lawyer will essentially file a lawsuit (known as a 'demanda') on your behalf and you'll go to court. Demandas can be sent to your bank or directly to the Bank of Spain.
Going to the Bank of Spain has its advantages and disadvantages.
The Bank of Spain usually settles these sorts of claims positively for clients, and can force your bank to start the settlement process.
However, decisions from the Bank of Spain can take several months.
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If you purchased a Spanish property before 2019 and you paid for all the mortgages expenses, it’s likely that you’re eligible to claim some or them back, even if you’ve already paid off the mortgage or sold the property.
In 2015, Spain’s Supreme Court and the Court of Justice of the European Union ruled that Spanish banks that charged customers these "excessive" mortgage expenses (gastos de formalización) should reimburse them.
The deadline to file a legal claim was set for January 23rd 2024, although there's a possibility this could be pushed back until April.
So how do you go about claiming back mortgage expenses from Spanish banks? Here's what you need to know.
Which mortgage expenses can I claim back in Spain?
Following the court rulings, there are several different mortgage expenses you can claim back in Spain.
Notary fees - All mortgage documents must be notarised. To do this, you go to a notary's office, who generally charge between 0.2 percent and 0.5 percent of the value of the property.
Appraisal fees - Any fees you paid to an independent appraiser for a valuation of the property can also be claimed back.
Administration fees - These are the general admin fees that come from putting together and maintaining the mortgage, usually carried out by the bank.
Registry fees - Once mortgages are granted and the property purchased, you have a legal obligation to register it in the land registry. The fee for doing this is usually somewhere between 0.5 percent and 2 percent of the mortgage liability, and can also be reclaimed.
Which documents do I need to claim?
In essence, as many as you can. The more evidence you have the better.
The main thing you'll need is the mortgage deed. If possible, try and find the specific clauses that outline the expenses you are claiming back.
Any invoices or payments receipts, plus mortgage renewal or subrogation documents will also be handy.
How does the legal claim work?
There are basically two ways to do this: getting a lawyer and filing a lawsuit (vía judicial), or trying to do it yourself through the bank's customer services department (vía extrajudicial).
Many people start off trying to make the legal claim themselves, but ultimately end up needing the support of a legal expert - this is especially true if you don't speak Spanish, and, if you do, even for experienced non-native speakers the Spanish legalese and banking jargon can be difficult to keep up with.
However, it's worth noting that when these mortgage expenses are claimed, the refund you get is not usually very high.
Obviously, this depends on the loan agreement, the price of the property in question, and so on, but in most cases it is possible to recover between €700 and €1,500 and you'll have to deduct any legal fees you owe from that (if you go for the vía judicial).
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
How do I claim by myself?
If you decide to get a lawyer they will handle everything, but if you don't and prefer to go the vía extrajudicial, this is essentially making a complaint to your bank's customer services department (known as 'servicio de atención al cliente' in Spanish).
It is recommended that you do this physically, in branch, as you can get stamped copies of any documents proving that you have submitted a claim. The document should include both the loan number and the request for the specific clauses to be cancelled and the amount to be refunded.
The bank's customer service department is obliged to provide a response in less than two months.
There are reports that many banks decide to pay back their customers who appealed the extrajudicial way if they deem that the amount is not high enough for them to risk a lawsuit if they refuse to cough up.
Therefore, beginning the claim directly and extrajudicially with your bank should be your first step in the majority of cases, as there's a considerable chance of success and you will also save on legal costs.
What happens if the bank denies my claim?
If the bank denies your claim (or doesn’t respond within two months) and you want to continue, you'll need to then find a lawyer and go down the legal route.
The lawyer will essentially file a lawsuit (known as a 'demanda') on your behalf and you'll go to court. Demandas can be sent to your bank or directly to the Bank of Spain.
Going to the Bank of Spain has its advantages and disadvantages.
The Bank of Spain usually settles these sorts of claims positively for clients, and can force your bank to start the settlement process.
However, decisions from the Bank of Spain can take several months.
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