Early maturity due to non-payment of loan installments

Almost any lawyer has considered to date that in cases of non-payment of loan installments, the creditor did not have to wait for the debtor to continue defaulting and could declare the debt overdue and demand payment. And this because it is a lawful pact (art. 1,255 CC) and bring cause in art. 1.124 CC: “The power to resolve the obligations is understood to be implicit in the reciprocal ones, in the event that one of the obligated parties does not comply with what is incumbent upon him.

The injured party may choose between demanding compliance or resolution of the obligation, with compensation for damages and payment of interest in both cases. You can also request the resolution, even after having opted for compliance, when it is impossible. “

And this has been the doctrine of our Supreme Court in whose sent. no. 792/2009, of December 16, in relation to the clause on early maturity due to non-payment of a single loan installment, it stated: “The jurisprudential doctrine has declared, based on art. 1,255 CC, (…) the validity of the early maturity clauses in loans when there is just cause such as the manifest abandonment of obligations of an essential nature, such as the breach by the borrower of the obligation to pay the loan repayment installments “.

Along these lines, the STS of February 7, 2000 (although for the scope of the financial leasing contract), March 9, 2001, July 4, 2008 and December 12, 2008, among others, had been manifested.

Without prejudice to the fact that in practice it was more than infrequent (I have never seen him) for the execution to begin in the event of non-payment of a single installment (in banking practice it is not feasible to initiate the claim in such a short time), the Law 41/2007, of December 7, rewording art. 693.3 LEC establishing that “if the mortgaged property were the family home, the debtor may, even without the consent of the creditor, release the property by consigning the amounts expressed in the preceding paragraph (exact amount that due to principal and interest was due in the date of filing the claim).

Once an asset has been released for the first time, it may be released on second or subsequent occasions, provided that there is at least 5 years between the date of release and the date of the judicial or extrajudicial payment request made by the creditor. “In this way, a luck of enervation of the foreclosure in a way analogous to that made by article 22 of the LEC regarding eviction.

This art. 693 LEC is amended again by Law 1/2013, of May 14, which requires the credit institution to declare the early maturity of the mortgage loans, which expire “at least three monthly installments without the debtor fulfilling his payment obligation or a number of installments such as to suppose that the debtor has breached his obligation for a period of at least three months “.

Thus, STS No. 705/2015, of December 23, declared void, as abusive, the early maturity clause inserted in the mortgage loans of a specific bank that empowered the bank to demand the return of the loan in advance. the entire loan for non-payment of a part of any of the installments.

And he described it as abusive because the litigious clause predisposed by the bank did not exceed the required standards established in the Judgment of the CJEU of March 14, 2013 (Aziz case). This resolution states in paragraph 73: «as regards, first of all, the clause relating to early expiration in long-term contracts for breaches of the debtor in a limited period, it is up to the referring judge to check especially, [… ], if the professional’s power to terminate the entire loan early depends on the consumer having breached an essential obligation within the framework of the contractual relationship in question,

On these grounds, STS No. 705/2015 states that “the disputed clause does not exceed such standards, because although it may be covered by the aforementioned provisions of our internal legislation, nor does it modulate the severity of the breach based on the duration and amount of the loan, nor does it allow the consumer to avoid its application through diligent reparation behavior (although later the legislation has allowed it when the mortgaged property is the habitual residence -art. 693.3, paragraph 2, LEC, in current wording given by Law 19 / 2015, of July 13) And in any case, it seems clear that an early expiration clause that allows the resolution with the breach of a single term, even partial and with respect to an accessory obligation, must be considered as abusive,since it is not linked to quantitatively or temporally serious parameters “.

But, in addition, said STS of December 23, 2015 qualified the procedural effects of the nullity of the clause to maintain that such nullity will not always lead to the dismissal of the foreclosure, to prevent the protection of consumers from leading to maximalist interpretations that , under the appearance of maximum protection, have as a paradoxical consequence the restriction of access to mortgage credit and, consequently, to the acquisition of home ownership. For this reason, said that Judgment that the nullity of the clause can produce the dismissal of the execution if the minimum conditions established in the LEC are met (non-payment of three monthly installments or an equivalent number of installments) and the court also values, in the specific case,

In view of this judgment, the Court of First Instance No. 2 of Santander decided to suspend the procedure and submit several preliminary questions to the Court of Justice, which were resolved in the CJEU Judgment of January 26, 2017 that in relation to the early maturity clauses could be synthesized as follows:

a) It is incumbent on the national court to examine whether the power granted to the professional to declare the early maturity of the entire loan is subject to the consumer’s breach of an essential obligation within the framework of the contractual relationship that In question, whether this power is provided for cases in which such non-compliance is serious enough in relation to the duration and amount of the loan, whether said power constitutes an exception with respect to the general rules applicable in the matter in the absence of specific contractual stipulations and whether national law provides adequate and effective means that allow the consumer subject to the application of this clause to remedy the effects of the early maturity of the loan.

b) Regarding the procedural effects of the application of the criteria and their consequences by the national judge, the Judgment said that Directive 93/13 must be interpreted in the sense that it opposes a jurisprudential interpretation of a provision of national law relating to the early maturity clauses of loan contracts -such as article 693.2 of the LEC- which prohibits the national judge who has found the abusive nature of a contractual clause of this type declare its nullity and leave it unapplied when In practice, the professional has not applied it, but has observed the requirements established by the provision of national law.

As a consequence of this ruling, the Spanish Courts have paralyzed all foreclosures. In view of this, the Plenary of the First Civil Chamber of the Supreme Court, has raised both preliminary questions before the CJEU to avoid new discrepancies regarding the procedural specialties of our LEC, by Order of February 8, 2017. The essential reason that leads the Supreme Court to request the opinion of the CJEU stems from the procedural idiosyncrasy of Spanish Law described in the Fourth Law Foundation of the Order as follows:

“When in a mortgage loan contract the borrower defaults on his obligation to repay the amount received, the creditor has the following options:

These advantages provided for the consumer debtor in the special process of foreclosure on habitual residence, in arts. 693.3, 579.2 and 682.2 of the Civil Procedure Law, are, briefly, the following: -The debtor may release the asset by consigning the amount due up to that date. -Released an asset for the first time, it may be released on a second or subsequent occasions provided that, at least, there are three years between the date of release and that of the judicial or extrajudicial payment request made by the creditor. -There is a limitation of the calculation of the procedural costs based solely on the arrears of the loan, in the event of enervation of the mortgage executive action.- The price for auction purposes may not be lower, in any case,

Therefore, the aforementioned Order, formulates the following requests for a preliminary ruling to the CJEU, in interpretation of Article 6.1 of Directive 93/13 / EEC, of ​​the Council, of April 5, 1993, on abusive clauses in contracts concluded with consumers:

In this way, the TS tries to solve the problem it has caused. The early expiration is based on art. 1.124 CC that the Court itself cites and that more than a precept we must consider it a general principle of Law. “Professional” creditors cannot be condemned not to be able to claim the entire debt when the debtor defaults. And even less when in their contracts they have followed art. 1,124 CC, the jurisprudence of the Supreme Court and more recently the provisions of art. 693.2 LEC. And this because the “balance of the contract” has been broken. Who is going to lend if when they stop paying you have to wait for the expiration of the contract?

I cannot hide that for me it would be a good de lege ferenda solution to extend to all consumers the possibility of “loan rehabilitation” and “enervation of foreclosure”, whether mortgage or not, that art. 693.3 LEC limits to the cases of execution of the debtor’s habitual residence.

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