Nullity of the general condition of early termination in mortgage loans entered into with consumers according to the judgments of the European Court of Justice rendered on March 14th 2013, January 26th 2017, March 26th 2019, and of the Spanish Supreme Court rendered on December 23rd 2015, February 18th 2016, September 11th 2019 and the remaining case law from the said Court and lower courts

Abstract

It is not disputed that a professional lender is entitled to early terminate a mortgage loan before its expiration if a default of the borrower consumer occurs. However, the fact that the early termination is established in a general non-negotiated condition requires to study the possible abuse of this type of clause due to the hard and serious consequences that it may caused on the consumer. Notwithstanding the foregoing, the possible nullity of this kind of general provisions may also affect the nullity of the full contract and it may foreclose enforcement proceedings that have may been brought pursuant this type of stipulations. These matters are particularly addressed in the Judgments of the European Court of March 26, of the 2019 and Spanish Supreme Court of September 11, of the 2019. But this issue was partially regulated in the article 693 of the Act 1/2000, of January 7th 2000, on Civil Procedure, which was amended several times, being the most relevant one the one performed by the Act 1/2013, of May 14th 2013, on Measures to Reinforce the Protection of Mortgage Debtors. Furthermore, the 5/2019 Act of March 15, on Real Estate Credit Agreements, establishes in a mandatory manner when an early termination can take place in cases of mortgage loans entered into with individuals when the real estate which is mortgaged has a residential use or its purpose is acquiring or keeping property rights over lands or building built or that are going to be built for the residential use of the borrower. But it has to be taken into account that this Act cannot be applied retroactively. This paper aims to study the issue of the possible abuse and nullity of the general conditions of early termination in mortgage loans, entered into with consumers analyzing the current status of the Law and the caselaw that has been rendered on this matter.