Editorial transparency and use of artificial intelligence
This article forms part of the CostaLuz Lawyers blog and is published for general informational and educational purposes only. It was prepared with the assistance of artificial intelligence tools and, before publication, was substantively reviewed and editorially approved by Maria de Castro, a Spanish-qualified lawyer registered with the Cádiz Bar Association under number 2745, founder of CostaLuz Lawyers and the person responsible for the editorial review of the published content.
This article does not constitute legal, tax, immigration, employment, estate-planning or investment advice and does not replace an individual assessment and the professional work of the appropriate CostaLuz Lawyers specialist. No action or omission should be based solely on this information.
A recent sentence has declared a BBVA mortgage loan null and void because of lack of information included in the contract.
The court found that the Spanish bank failed to inform the client with sufficient clarity and transparency. This latest sentence continues to pave the way for better consumer protection from abusive or unclear clauses in contracts with Spanish banks.
What type of mortgage loan did the client take out?
A Granada company took out a mortgage loan with BBVA bank. The loan is classed a high-risk and deemed ‘complex’ by the Spanish Stock Market Commission (CNMV in Spanish) and the Bank of Spain. Furthermore, the Spanish Supreme Court has also ruled that this type of product is ‘complex’.
What has the sentence ruled?
The latest legal decision comes from a court in Jaén that has ruled that the mortgage loan is null and void. The judge came to this conclusion because the mortgage contract issued by BBVA bank had a lack of information about the cost of early loan cancellation.
The court considers that the insufficient or lack of information about these particular costs meant that the client agreed to the mortgage loan without the necessary knowledge.
The sentence emphasises that had the client known about the costs of early loan cancellation, they would not have agreed to contract the mortgage loan.
The judge states that although the exact cost of early cancellation could not be known, the bank should have given the client an approximation so that the client has an idea.
Why is the lack of this information so important?
Spanish and European judges and courts are attaching increasing importance to the conditions in which the decision-making processes for contracts take place. For example, in this case when the client (the Granada company) was about to sign the contract for the mortgage loan.
Under Contract Law and Consumer Law, contractual consent must always be free, valid and effective. This means that all contracts must be clear and transparent, and the client fully aware of all the implications of all the clauses.
What are the implications for other consumers?
The recent sentence is expected to have wide-reaching consequences because banks routinely include this clause in contracts with small and medium-sized companies. As a result, many companies could be unaware that should they decide to cancel their mortgage early, they may face high costs.
How can Costaluz Lawyers help?
Our legal team has wide experience in consumer protection and getting better deals for our clients from Spanish banks.
We have a particularly strong track record in the mortgage sector. If you have taken out a mortgage loan for your company and are unaware of the implications of the contract because of a lack of transparency and clarity from your bank, get in touch.
Which abusive clauses do we check in your Spanish mortgage?
- Floor clause (Clausula suelo) — hidden minimum interest rates
- Abusive late payment interest — rates exceeding legal limits
- Mortgage expenses — notary, registry, and management fees unlawfully charged to the borrower
- Opening commission — upfront fees that may be reclaimable
- Early maturity clause (Vencimiento anticipado) — allowing the bank to demand full repayment after minor defaults
- IRPH — a mortgage index consistently higher than Euribor, often applied without adequate transparency
- Multi-currency clauses — loans denominated in foreign currencies exposing borrowers to exchange rate risk
If any of these apply to your mortgage, you may be entitled to a refund. Request a free mortgage review
Legal Notice: The content on this page is provided for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. No action should be taken based solely on this content without first seeking independent professional legal counsel. Each case requires individual assessment based on its specific circumstances. CostaLuz Lawyers accepts no liability for actions taken or not taken based on this content.
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