Abusive clauses in mortgages can be defined as those that tip the balance disproportionately in favor of the bank and against the customer. Lately they have become a hot topic. Not a day goes by without some related news item appearing in the media.
Although the most talked about abusive clauses are the floor clause and the one that makes the mortgagor pay the costs of the formalization of the mortgage deed, they are not the only ones.
Floor clause:
It is the limitation to the variation of the interest rate contained in Clause Three bis of the mortgage loan with a percentage ranging from 3% to 5% below which you will not benefit from the fall of the Euribor. Your bank did not really inform you that the interest rate was not actually variable. Read more.
Mortgage expenses
All the expenses you paid when you signed your mortgage, such as notary, registry, appraisal and stamp duty are now claimable together with the legal interest. The clause is contrary to the law as it imposes the costs on the customer unilaterally. Read more.
Personal guarantee clauses
The debtor is liable to the bank with all his assets, present and future. It is an abusive clause since the client was not informed that in the event of non-payment and when the property is awarded to the bank, the client remains a debtor indefinitely for the remainder of the unpaid loan. This prevents the dation in payment of your outstanding and overdue debt. Once the clause is declared null and void, the debtors will not have any outstanding debt once they hand over the property to the Bank.
Bonds
The financial institution imposes on the guarantor, without any information or negotiation as to its scope, the waiver of its rights such as those relating to the benefit of excusion, division and order. The bank thus illegitimately ensures that it can direct its actions against the guarantor as if he were the principal debtor of the loan.
Early maturity
The Bank, taking advantage of the “early maturity” clause, after a few months (3 months), terminates the contract and demands in the Court through a foreclosure procedure, the totality of the loan. If this clause is abusive as it has not been informed or individually agreed with the client, this means that it does not matter the number of unpaid installments since the nullity will prevent the bank from executing the debt through the mortgage procedure.
BGI LAW recommends that you contact us so that our experts can study and evaluate your specific case and initiate the appropriate action in each case.
