EUROPEAN COURT OF JUSTICE DOCTRINE ON THE EXAMINATION OF MORTGAGE LOANS FOR UNFAIR CLAUSES.

Abstract

In foreclosure matters, examination by a registrar is important, because unfair clauses must be precluded from the enforcement order, and in Spain the enforcement order is the registration entry or, to put it another way, the registered terms of the deed formalizing the mortgage loan (Spanish Mortgage Act, section 130). Only the vital importance of meticulously eliminating unfair clauses justifies limiting the grounds on which an applicant may object to the registrar's findings. When examining a mortgage loan for unfair clauses that might make the loan invalid, a registrar will bear in mind Directive 93/13/EEC, which lists a series of clauses whose unfairness renders them invalid (the blacklist in additional provision one, now included in Royal Legislative Decree 1/2007 of 16 November passing the revised Consumer and User Defence Act). As of the entry in force of Act 1/2013, the clauses that are clearly invalid by reason of their unfairness include clauses demanding interest at more than three times the statutory interest rate for late payment on mortgage loans for the purchase of a primary residence and many other clauses examined in this article that are clearly contrary to imperative or prohibitive rules or regulations. The doctrine established by the Court of Justice of the European Union in its judgments of 14 June 2012 and 14 March 2013 affirms that unfair clauses can be rejected in limine litis. Moreover, it reminds the public authorities of their duty to take positive action to comply with Directive 93/13/EEC without waiting for a court judgment on cases of unfair clauses in general conditions. The Spanish Directorate-General of Registries and Notarial Affairs has confirmed the evolution of doctrine in this direction by recognizing the legal standing of registrars' examinations of unfair clauses that are contrary to imperative or prohibitive rules or regulations.