Nullity of the general condition of costs assumption in mortgage loans and its corresponding distribution and payment (notary and registry of the execution and the cancellation of the mortgage, appraisal and agency’s service costs) according to the judgments of the Spanish Supreme Court rendered on December 23rd 2015, January 23rd 2019 and the remaining case law rendered by the said Court and lower courts

Abstract

Further  to judgment of the Spanish Supreme Court  rendered  in December  23rd,  2015,  which declared  the  nullity of general  conditions that  impose on  the  consumer the  assumption of  all the  expenses related  to  the  execution and registration of  the  loan  and  its  mortgage  guarantee indiscriminately  and  without clarification, the specific  distribution of the payment obligation of the said expenses that  defines  the corresponding obligation to repay, has been discussed and subjected to  legal uncertainty because   there  have  been  very  different judicial judgments  on this  matter rendered  by lower  and  Provincial Courts. Recently the  Spanish Supreme Court  has  clarified  in  5 judgments of  January 23rd,  2019  that  the  notary  expenses for the  execution of the  mortgage  loan  and  the agency  fees  have  to  be borne  by  halves  between the  borrower  who  is  a consumer and  the lender,  while  the registration fees of the mortgage  have  to be reimbursed in full by the lender and  notary  and  registration cancellation of the mortgage  expenses have  to be paid  in  full  by the  borrower  which is a consumer. Notwithstanding the  above,  the  assumption of  the  expenses related  to  the  appraisal  of the  mortgaged property  remains unclear due  to  the  lack  of Spanish Su- preme  Court  judgments on  the  subject and  the  existence of  different criterions in the  lower  case  law. Pursuant to the  Act 5/2019, of March  15,  on  real estate  credit  contracts (hereinafter  referred to  as  «LCCI»),  lenders  must pay  the  costs  of  the  notary  fee of  the mortgage  loan deed, registration and agency service fees. The individual lender (who does not  need to be a consumer) must pay the appraisal expenses. But  this  distribu- tion  shall  only  apply  to  contracts professionally entered  into  from  June  16th,  2019 regarding  residential real estate  properties. This  article aims to thoroughly address  the problem of the abuse  of the imposition  of expenses related to mortgage  loans,  (except  for the  tax  on  legal documented acts  due  to  its  specific  difficulties), analyzing the  current status of the  regulations and  the  case  law  that  has  been  rendered  on  the  matter, in  order to clarify  the  current  situation, pointing out  the  certainties, uncertainties and  possible  solutions on the  main controversial aspects  of this  type  of disputes.