Laurence Dollimore
TENS of thousands of mostly British homeowners in Spain could be owed a cool €50,000 in compensation after crafty banks were exposed for putting a hidden clause in their mortgages.
If you had a mortgage from Sabadell, Unicaja or many other banks, you could be in for a big windfall.
It stems back to the early 2000s when a string of lenders secretly wrote in their clients’ contracts that interest rates could not drop below 3.5% – in what is now known as a ‘floor clause’.
However, for a decade, between 2011 and 2021, the interest rates in Spain sat at a record low, between zero and 1%.
What this meant was tens of thousands of homeowners spent years paying hundreds of euros more per month than they should have done.
One legal firm in southern Spain has been at the forefront of winning back money for affected homeowners – and on a promised ‘no win, no fee’ basis.
Fairway Lawyers boss Diego Echavarria (pictured above right), based in Marbella, told the Olive Press that one of his latest clients, the Coopers, were recently awarded a total of €21,075, plus legal costs.
The British family had bought a home in Riviera del Sol, in Mijas, in 2006, but didn’t sell up until recently.
They were totally unaware of the floor clause issue until they read about it in a copy of the Olive Press last year.
Now, after six months of legal wrangling, Echavarria, originally from Madrid, has won them the fee, plus compensation.
“It’s always a bit of a game and involves plenty of legal letters being pinged backwards and forwards, but I know what I’m doing having done this for years now,” he explained.
It comes after the golf-loving lawyer, a member of Guadalmina, won another British couple, the Brighouses, €48,359, last summer.
The couple had bought an off-plan apartment in Mirador de Costalita, in Estepona, in 2004.
They took over the mortgage from the developer, which contained the hidden clause and they ended up paying an extra €250 per month than required.
It was the fourth case Fairway Lawyers have won on homes in Mirador de Costalita alone.
There are thousands of similar cases all around Spain in which expats or former expats had no idea they were victims.
“Right now I am handling cases all over the country,” explained the father-of-two.
Warning signs
There are two tell tale characteristics to look out for; Your mortgage was signed off between 2001 and 2010 and your payments were the same amount for a large number of years.
“What is key is they will not have lowered for years,” continued the lawyer, who also handles many other legal work, in particular conveyancing from his office in Marbella.
He added: “Even if you have sold the property and paid off the mortgage, you can still claim.
“There is no deadline since the latest ruling from TJUE (Tribunal de Justicia de La Union Europea).
“There are around 100,000 mis-sold mortgages that have yet to be resolved in Spain.”
If you want to claim for a mis-sold mortgage or feel you may have been affected, contact diego@fairwaylawyers.com or send a message via Whatsapp to +606307885.
Simple process
What banks were involved in floor clauses? Most Spanish banks, but especially Banco Popular (now merged with Santander), Caja Duero, Caja España (merged with Unicaja), La Caixa, Solbank, Sabadell and many other savings banks which have since been taken over by major banks.
What is the process for making a claim? You need to submit a claim before the bank to try to reach a settlement out of court. Then comes a three-month period in which you await their response. Unfortunately the Spanish banks do not want to reach any kind of agreement or settlement and they always force the clients to go to court to get a positive ruling. They do this because they hope clients will get fed-up with the process and drop the claim – which is why we operate on a no win no fee basis.
