When “More Security” Becomes Abuse: A Very Human Ruling from Spain’s Supreme Court

Spain’s Supreme Court has issued an important decision on mortgage guarantees. In a nutshell, it tells banks:

If you are already well covered by a mortgage, you cannot keep piling on extra personal guarantees from family members for no real reason.

This comes from a ruling where the Court declared null and void a joint and several guarantee signed by the parents of a company director. They had also mortgaged their home, even though they were not involved in the business at all.

Below, we explain what happened and, most importantly, what can be done for guarantors who were “dragged into” a loan.

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What exactly happened in this case?

A bank granted a €300,000 loan to a company. To secure the loan:

• A property worth over €1.1 million was mortgaged.
• The mortgage liability on that property was set at over €433,000 for a 12-year term.
• In addition, the parents of the company’s director:
  • mortgaged their own home, and
  • signed as joint and several guarantors (personal sureties).

They were not partners, employees or managers of the company. They were simply the parents of the administrator.

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Why did the Supreme Court say this was abusive?

The Court looked at the numbers and saw that the bank was already more than protected:

• The value of the mortgaged property was much higher than the loan.
• The mortgage liability covered a very large part of the amount owed.

In other words, the mortgage alone was enough to protect the bank.

On top of that, the parents had also mortgaged their own property. Requiring them to be personal guarantors as well meant that they could be pursued with all their present and future assets.

The Court concluded that this was an “over-guarantee”: an excess of guarantees that goes beyond what is reasonably needed to cover the credit risk. That lack of proportionality:

• breaks the balance of the contract, and
• goes against the principle of good faith in consumer protection law.

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Why is this decision so “human”?

Because the Court is not treating the parents like anonymous figures in a contract. It is looking at them as real people:

• They did not run the business.
• They got no direct benefit from the loan.
• They had already put their home at risk.

The Supreme Court is essentially saying: if you already hold strong security over valuable property, you cannot also saddle the parents with unlimited personal liability “just in case”.

There is another key point: the Court also notes that if the bank is going to impose such a heavy burden on the family, there should be some clear financial advantage in return (for example, a significantly lower interest rate). In this case, there was no such benefit.

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Does this mean that all guarantor clauses are abusive?

No. The Court is very clear on this:
A guarantee contract is not abusive simply because it exists.

However, it can be declared null and void when:

• the guarantees are clearly disproportionate compared with the actual risk of the loan, and
• the guarantor is a consumer (a private individual, usually a family member) with no real connection to the business.

This is especially relevant when:

• there is already a strong mortgage on a property, and
• the bank still insists on having parents or relatives sign as joint and several guarantors.

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Could this affect my case or my family’s situation?

This decision may be relevant if:

• You, your parents or other relatives signed as joint and several guarantors for a business or company loan.
• A property (often the family home) was mortgaged, and in addition, someone was asked to sign as a personal guarantor.
• You feel that the bank demanded much more security than was really needed.

If those elements are present, there may be a basis to argue that the guarantee clause is abusive and disproportionate and should be declared null.

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What can guarantors do if they have been “trapped” by the bank?

This is the practical heart of the issue. For guarantors who were dragged into a loan, the legal path usually involves several steps:

1. Legal review of the loan and mortgage documents
A specialised lawyer will:

• Read the loan deed, the mortgage deed and any annexes.
• Check the value of the mortgaged property and the amount of the mortgage liability.
• Analyse the wording of the guarantee clause (joint and several liability, waivers of rights, etc.).
• Verify whether the guarantor was acting as a consumer (for example, parents with no business role).

2. Assessment of disproportion and “over-guarantee”
The key questions are:

• Was the mortgage already sufficient to cover the loan, interests and costs?
• Was it really necessary to add one or more guarantors?
• Did the guarantor receive any true economic advantage (lower interest rate, better terms), or were they simply loaded with more risk?

If the answer is that the bank was already very well protected and the guarantor gained nothing, there may be a strong argument for abuse.

3. Negotiation with the bank (when useful)
Sometimes, before or along with court action, it may be possible to:

• Ask the bank to release the guarantor from future liability.
• Renegotiate terms or reach a settlement, especially when there is a clear risk that a court would declare the guarantee null.

However, banks do not usually give up guarantees voluntarily unless they see that the legal risk is real and well founded.

4. Court action to declare the guarantee clause null
If negotiation is not enough or not possible, the usual path is:

• Filing a court claim asking for:
  • the declaration of nullity of the abusive guarantee clause, and
  • the release of the guarantor from personal liability arising from that clause.

Depending on the case, it may also be possible to:

• Request a recalculation of the debt, excluding the guarantor.
• If the guarantor has already paid money under the guarantee, ask for the refund of amounts paid on the basis of an abusive clause, plus interest.

5. What happens if the guarantee is finally declared null?
If a court agrees that the clause is abusive and declares it null:

• The guarantor is treated as if they had never validly assumed that personal guarantee.
• The mortgage on the property remains in place (unless there are other grounds to challenge it), but:
  • the guarantor cannot be personally chased for the debt under that clause, and
  • enforcement must be limited to the valid guarantees (normally, the mortgage).

This can make a huge difference for families who risk losing not only a property, but also their savings, salaries, cars and other assets.

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How do we help guarantors and mortgage borrowers in practice?

At our firm, we handle this type of case as part of our specialised practice in real estate and financial consumer law, developed over many years of work in off-plan property purchases and related bank guarantees and mortgages.

That experience has given us a very clear view of:

• how banks design their contracts,
• which clauses are often unbalanced or abusive, and
• how courts are interpreting these situations in favour of consumers and family guarantors.

If you currently have a mortgage loan in Spain and you (or your relatives) are listed as guarantors or have signed any additional guarantees, we can:

• review your mortgage and guarantee documentation,
• check whether there are abusive or disproportionate clauses, and
• advise you on the realistic options to challenge them.

We offer a complimentary review of your mortgage deeds and guarantee clauses.
From there, we explain your position clearly, in plain language, and outline the next steps if you decide to act.

You do not have to assume that “the bank always wins”.
Sometimes, the law is very clearly on the side of the families who were asked to give far more than was fair.

Think your Spanish mortgage may contain abusive clauses or disproportionate guarantees?
Send us your mortgage deed and guarantee documents and we’ll carry out a complimentary legal review so you know exactly where you stand – and what you can do about it. Use the contact form below:

About CostaLuz Lawyers and María de Castro

You can read testimonials from hundreds of satisfied clients, going back to 2006, on our website, on Google Reviews and on EyeonSpain.

Reviewed by María de Castro, Abogado no. 2745, Ilustre Colegio de Abogados de Cádiz. CostaLuz Lawyers has supported international buyers since 2006 on EyeonSpain  with guidance and advice on the legal aspects of life in Spain. Included in the lawyers lists of the UK and Ireland embassies. Updated 22 Nov 2025.

María Luisa de Castro’s work, founder of CostaLuz Lawyers, is backed by a strong presence in specialist media and professional directories. Her track record as a Property Law and Consumer Real Estate Law (Derecho de Consumo Inmobiliario) specialist can be seen in her guides for international audiences on Expatra, in her long-running blogs on Spanish off-plan protection and Ley 57/1968 on EyeOnSpain , in her legal analysis for Confilegal and Legal Today, and in her contributions for the Spanish Bar Council (Consejo General de la Abogacía Española) and the Centre for Consumer Studies at the University of Castilla-La Mancha.

Her work is also profiled on international retirement and expat platforms such as Retirement Abroad, and has been highlighted by expat media including The Olive Press News Spain and The Local Spain among other specialist expat and legal forums.

Her legal work has also been featured or referenced in respected international and Spanish media, including The Telegraph, The Times, the BBC, El País and El País English, The Local Spain, The Olive Press and other reputable outlets, particularly in connection with landmark court rulings on Ley 57/1968 and Spanish consumer protection.

CostaLuz Lawyers is also included in the official lists of English-speaking legal professionals for British and Irish nationals in Spain, as compiled by the UK government’s “Spain: list of lawyers” and by the Embassy of Ireland in Spain and its honorary consular network.

Related guide: our guide to mortgages in Spain for non-residents.