On the 14th March 2013 was granted by the Court of Justice of the European Union (ECJ) a court order about the 93/13CE directive on consumer contracts and unfair terms, and if the Spanish procedural law is contrary to it or not.
Basically, and very briefly the ECJ decision states that the Spanish legislation infringes EU Consumers Law, because:
1)On the mortgage foreclosure or enforcements proceedings the debtor can only oppose for a few reasons, but can not object on the base of unfair terms on the mortgage loan contract base of that execution process.
2)In addition, in Spain, in case of the existence of an unfair term, the debtor must start a new different court process applying for the declaration of invalidity, but in this new proceeding the judge can not stop or stay the mortgage enforcement court case, while decides whether the clauses are unfair, invalid or not.
Therefore, the ECJ understands that Spanish Civil Proceedings Laws does not comply with the principle of effectiveness, because in practice once a foreclosure proceedings starts, the debtor can do almost nothing, even if the loan contract contains unfair terms.
As for what must be considered as unfair terms or clauses, the ECJ said that are the national courts who must assess it , taking into account criteria as:
1)Needs to be considered the applicable rules under national law in the absence of agreement, and therefore if the agreement leaves the consumer in a worse situation.
2)The consumer’s status must be taken into account, and his means to prevent continue use of the unfair terms.
2)Whether the seller or the supplier ( in this case the bank) dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations.
While this is good news for consumers does not mean that Spanish foreclosures or mortgage executions are invalid or illegal, but in the event that it is understood thata of the loan is abusive, the courts should be able to decide on this point before the executive procedure ends and the property is lost.
If you as consumer has any problem with your bank, seller or supplier, we can assist you. The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
White & Baos
Tel:+34 966 426 185
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