The Court of Justice of the EU (CJEU) decided yesterday that the Spanish legislation on evictions is against the European regulations as it does not allow citizens to stop their eviction based on an abusive clause, as it is a right the consumer can only exercise once he has been expelled from his home. The Spanish Government had put aside the Decree on evictions which was being prepared by Parliament while awaiting a decision, and yesterday it hastily declared it will reform the Civil Procedure Law, as required by the court.
The court (…) understands that the protection at a later stage “is incomplete and insufficient” as “it does not give the chance to avoid the final loss of the home” and only “provides an indemnity for damages”.
The consequences of this decision are to be applied immediately. According to European judicial sources, the decision “obliges Spanish and European judges to stop the eviction while it is determined if the contract signed between the professional and the client has abusive clauses”. Other sources close to banks declare that it is not an obligation but a possibility until the Government changes the law. When it does, “there will be more legal security, but the sentence is applicable directly”, European judicial sources declare.
This would affect all future foreclosures and those which are being carried out. For those who are already finished, there is no turning back. Although the judge José María Fernández Seijó, who set out the matter before the European court hinted yesterday that some of those affected by evictions could get their homes back.
According to figures from the Spanish Mortgage Association (SMA), there were more than 93.000 foreclosures in 2009 and 2010, which dropped to 78.000 in 2011 and were more than 70.000 last year. Half of these numbers could claim abusive clauses in future.
The sentence goes far beyond the conclusions of the General Attorney and establishes that the fact that the Spanish norms do not “allow the judge to adopt precautionary measures and among them, the suspension of the foreclosure” is directly against the European norms.
The Spanish Banks Association (SBA) and the Spanish Confederation of Savings Banks (SCSB) value this sentence positively. Nevertheless, Alfonso Garnica, from Iberia Abogados, points out that “the foreclosure is a mortgage guarantee which will complicate itself, causing an even bigger decrease in loans”.
Sources from the Ministry of Economy, assured that “the Government will adapt to the sentence”.(…)