Floor Clause FAQs

Your Questions Answered

Our FAQs aim to answer any questions you may have about making a claim against your tour operator. If you have any other questions, please call us on 01924 601 111

To Start your claim fill in the form on the right, or click here.

What is the Floor Clause, or Clausula Suelos?

The Floor Clause, or Clausula Suelos in Spanish, is a capped minimum interest rate. This allowed Spanish banks to ensure that no matter how much the Euribor dropped, the interest payments on a mortgage would always stay the same (or increase).

In many cases the Spanish banks even added a ceiling rate of between 10%-15%. This meant homeowners were never charged more than the highest interest rate.

What type of mortgages did the Floor Clause apply to?

The Floor Clause (Clausula Suelos) was added to any mortgage that was attached to the Euribor or IRPH

In Spain, the Floor Clause was added to the majority of Variable Interest Rate Mortgages. The majority of homeowners with this clause in their mortgage were mis-sold, this meant that after the initial fixed repayment period was over, bills rocketed and homeowners were left paying way over what they had originally anticipated.

In England, this type of mortgage is often referred to as a Tracker mortgage

Are Floor Clauses (Clausula Suelos) legal?

NO!

In 2013 a judge in Madrid found the Floor Clause to be unlawful after a previous judge decided that it was abusive to consumers.

Today, this means that Spanish property owners are now entitled to claim a refund on all overpaid interest, regardless of when the mortgage was originally taken out.

Why do I need to employ a Solicitor to help me claim my refund?

The Spanish legal system operates very differently to that of the UK.

In fact, the Spanish legal system is incredibly complex and slow. In addition to this, Spanish law stipulates that when a case of this type is filed, it can only be taken through the Spanish courts once.

This means that you need to ensure your case is handled by expert solicitors, with experience in taking cases through the Spanish legal system.

Ensure you do your homework when instructing a firm to work on your behalf. Check that they are registered with the SRA and Lexcel, and you are confident that they can carry out this task on your behalf.

What information do you need to start a valid claim?

In order for us to work out if your mortgage held the Floor Clause, or Clausula Suelo, we will need to see a copy of your mortgage deed. In Spanish this is known as the Escritura de Prestamo. In addition to this, it would be necessary to view some of your bank statements with the mortgage payments stated.

Each case is handled on an individual basis so if we need any supplementary information we will let you know with ample opportunity to locate these documents.

I have spoken to my bank, they have said that I should have read the terms and conditions more carefully, and therefore I am not entitled to compensation, can you still help?

Yes!

The bank may give you many reasons why you cannot file a claim against them. Some reasons we have heard are:

You are an estate agent so you should have known

You signed the contract stating you agree to the terms and conditions so it is your responsibility to ensure you are aware of what you are signing.

No one forced you to sign, so we did not mis-sell to you.

However, these are excuses and we can still help you start a case against the bank.

This is a European supreme court ruling, which assumes that the customer has not been fully informed or fully comprehended all the clauses and criteria set out in the mortgage document.

A new ruling now requires Notaries in Spain to spend more time explaining all clauses in any mortgage. You can find out more about this in the question below.

What does the new ruling about Notaries & Mortgage in Spain mean for consumers?

In January 2017 it was established that when signing a mortgage document you must visit a Notary in Spain at least one month prior to signing the mortgage agreement. This allows the Notary to ensure the purchasers know exactly what they are signing, and have ample opportunity to process the information, clauses and details of the mortgage they are agreeing to.

Can I claim the refund back without using a solicitor?

There is a system in Spain set up by each bank, so you may initiate a claim if you speak Spanish. The response from many banks to individual claims is quite often negative. If you utilise the services of a solicitor the banks tend to consider these claims with a more positive attitude.

Is there a time limit for claiming back your Clausula Suelos refund?

The December 2016 ruling ensured that there was no time limit for claiming, but also no time limit for when you could have potentially taken out this type of mortgage.

However, It is important to get your case into the Spanish courts as soon as possible. This is not only to ensure your case gets filed should any regulations change, but also we have the understanding that a sooner the better approach should be taken, just in case a court case is required later down the line.

I bought my property over 10 years ago, can I still make a claim?

The floor clause started to appear in mortgage papers as far back as 2000, a year after the Euribor was originally implemented. Therefore it is possible to claim on mortgages well over ten years old!

What is the average refund amount?

There is no average amount. In fact the refund you are entitled to will depend on your exact mortgage. This is why we treat every case individually.

Some factors which will impact the amount of money you could be owed will include; your original mortgage value, the length of your mortgage, how much you have already paid, the interest rate and its movements since you purchased the property, the bank you purchased the mortgage through, and their interest rate caps, and much more!

How do I know if I have a valid claim?

If your payments have not decreased over the term of your mortgage you are either on a fixed interest rate mortgage, or there is a floor clause in place.

Where do I find the Floor Clause / Clausula Suelos in my mortgage documents?

This will depend on your banks contract, and in our experience it can be held anywhere within the 50-60 page contract.

Can I calculate how much I have overpaid?

It is a very complicated calculation, it will require you to know the term of the mortgage, the first periods interest rate, the differential, the floor clause interest rate and finally using these to calculate the difference in the Euribor rate for every month from the start of the mortgage. You can speak to a member of our team if you would like us to work this out for you.

Do I have to go to court in Spain?

No, if you instruct us to work on your behalf, we will put in a plan of action for you so that should your case go to court we can act for you.

What are our fees?

We operate on a No Win No Fee basis, so we will only retrieve money from you if we are successful.

Our fees will be clearly communicated to you prior to any work commencing on your behalf, and you have the right to cancel at any time.

We will deduct 25% of money you are awarded, but only after we have recovered your refund, so there is nothing to pay upfront.

How does No Win No Fee work?

You dont pay anything until your case is successful and you are awarded damages, from this we would take a percentage agreed with you in advance.

How long does it take?

The banks have three months to respond once the letter of claim is issued. If they deny the claim it may take up to two years to go through the courts. However, banks do settle prior to court so they do not have to incur court costs.

Have Sarah Waddington Solicitors been successful?