Mortgage arrangement fees in Spain: what the bank owes you and the claim deadline

For years, Spanish mortgage deeds made the borrower pay the entire cost of setting up the loan: notary, land registry, administrative agency ("gestoría") and property valuation fees. The courts have declared that clause unfair, and anyone who signed it can recover much of what they overpaid. Here is how those costs are split and, above all, how long you have to claim the money back.

An unfair clause

The clause that indiscriminately placed all mortgage-arrangement costs on the consumer was declared unfair by the courts, for causing a significant imbalance to the borrower's detriment contrary to the requirements of good faith, under Directive 93/13/EEC on unfair terms in consumer contracts. Once a clause is declared unfair, it is treated as if it had never been agreed, and it falls to be determined who should actually have borne each cost under the rules in force when the loan was signed.

How are the costs split?

In the absence of a valid agreed split, Spain's Supreme Court (Sala Primera, the First Civil Chamber) set out how to allocate each item. Notary fees are split equally between the bank and the customer, since both have an interest in the deed. Land registry fees fall entirely on the bank, as the Supreme Court already held in 2019. So do the administrative agency's fees, since Supreme Court judgment 555/2020 of 26 October, which, following the judgment of the Court of Justice of the European Union of 16 July 2020 in Joined Cases C-224/19 and C-259/19, Caixabank, S.A. and Banco Bilbao Vizcaya Argentaria, S.A., corrected the equal split set in 2019 (ECLI:EU:C:2020:578).

The Court of Justice confirmed that, once a clause placing all costs indiscriminately on the consumer is declared unfair, restitution of what was paid cannot be denied merely because Spanish law does not itself allocate each item between the parties, unless the law that would otherwise apply in the absence of the clause placed that cost on the consumer. Following that judgment, Spain's Supreme Court also made the bank bear the full cost of the property valuation, in addition to the registry and agency fees. Overall, out of every 1,000 euros in arrangement costs, the bank typically ends up refunding between 700 and 850 euros, depending on how each item weighs in the specific deed.

When does the right to recover what was paid expire?

The action to have the unfair clause declared void never expires: it can be challenged at any time, with no time limit. The action to recover the money already paid is different, and is subject to a deadline. As a personal action with no special statutory term, it becomes time-barred five years after payment could first have been demanded, under article 1964.2 of the Civil Code.

The decisive question is when that five-year period starts to run. The most recent doctrine of the Court of Justice of the European Union has clarified that this period cannot start running before the consumer could reasonably have become aware that the clause was unfair, rather than from the simple moment each cost was paid. This is a point that has evolved in recent European rulings, so each case needs to be assessed against the doctrine in force at the time of the claim, rather than assuming the claim is time-barred merely because time has passed since the mortgage was signed.

How do you make the claim, and what should you keep?

The claim consists of seeking the clause's annulment and the restitution of the amounts that should have been borne by the bank, usually after a prior complaint to the bank's customer service department. To quantify the claim, it is essential to keep the loan deed and the invoices for notary, registry, agency and valuation fees: without those invoices, neither the bank nor a court has the documentary basis to calculate the refund.

By way of example, in a 200,000-euro mortgage arranged a decade ago, notary, registry, agency and valuation costs typically add up to between 2,000 and 3,000 euros. Of that amount, the bank must refund the registry, agency and valuation fees in full, plus half the notary fee, together with statutory interest from each payment date. With the deed and the invoices, the exact amount that can be claimed in each case can be calculated precisely.

How we help with mortgage-arrangement cost claims at RCM Legal

There are two real difficulties here: handling the claim deadline correctly, since its interpretation has shifted with European case law and claims are often wrongly assumed to be time-barred, and quantifying precisely what share of each cost the bank must bear. Many consumers give up on claiming because they believe too much time has passed, when that is not always the case.

At RCM Legal we review your mortgage deed, calculate what you can recover in arrangement costs and pursue the refund in line with current case law. As lawyers specialising in civil law in Murcia, if you signed a mortgage with a costs clause like this one, tell us about your case and we will tell you how much you can claim and within what deadline.