BANK SCAM – Ground Clause (Clausula Suelo)

How many times I have said to British people signing Escrituras (Deeds) in front of a Notary when they have purchased property in Spain “well my friends at least in Spain you get to see and keep the deeds of your property, whilst in your country the bank keeps it and only shows it to you if you really kick up a fuss.” One client from up north once said to me “what’s the point in me keeping it if I can’t read the bloody thing.” He also had a point. What I am getting at is that we mere mortals tend to accept blindly that because we have a lawyer, accountant, and bank manager working for us these people will look after our interest. Very often it does not work like that, not in Europe and especially not in Spain. I have discovered that my own mortgage, which I was led to believe by my friendly bank manager that the repayments could vary according to the Up and Down of the Euribor. So that Up meant I loose and Down I gain is in fact nothing of the sort, in fact Up I lose and Down I lose is the stark reality. The most frustrating thing is that I can only blame myself. I had the terms and conditions of the mortgage in my hand, all 25 pages of it and 5 minutes to read it before the Notary called us through, so I just skipped to the resume and it looked good or at least it did not mention the Ground Clause (Clausula Suelo) which was instead neatly slotted three quarters down on page 20. What the clause says is that if the Euribor goes Up your repayment increases accordingly and if it goes Down like it has now – 1% you get no benefit. As simple as that. Not all banks have resorted to this deceit, only most of them have and in 2012 Malaga courts have dictated seven sentences forcing the banks to return the money obtained through this con. In some cases the amount runs into thousands of Euros. How do you know if you have been conned by the bank? Well I read about this scam in the Spanish papers so I went to see David Perez of Martinez Echevarria Lawyers and they are working on my case. They seem to think that I will get some money back. ‘I live in hope.’ Obviously one thing will change, my friendly bank manager will not be friendly anymore.