Floor Clauses: How to Claim Against Your Bank and Recover Overpayments

What Is a Floor Clause

A floor clause (cláusula suelo) is a term included in variable-rate mortgage loans that sets a minimum interest rate applicable regardless of decreases in the reference index (usually the Euribor). Thus, even if the Euribor falls below the agreed floor, the borrower continues to pay a fixed minimum interest rate.

Formally, floor clauses appear linked to so-called ceiling clauses (which set a maximum), creating the appearance of reciprocal coverage. However, in practice, while ceilings were set at unreachable levels (10% to 15%), floors were set at operative levels (2% to 4%), producing a real imbalance to the consumer's detriment.

Scale of the Problem

It is estimated that floor clauses affected more than three million mortgages in Spain, with an estimated economic impact exceeding EUR 40 billion. The resulting litigation was massive and profoundly transformed consumer protection case law in Spain and across the European Union.

The Supreme Court Judgment of 9 May 2013 (STS 241/2013)

Declaration of Nullity for Lack of Transparency

STS of 9 May 2013 is the foundational judgment on floor clauses. The Full Chamber of the First Division of the Supreme Court, in the context of a collective action brought by AUSBANC against three banks (BBVA, Cajamar, and NCG Banco), declared floor clauses null and void for lack of material transparency.

The Court established a key distinction between two levels of control:

1. Incorporation control (first filter): Verifies that the clause was included in the contract meeting formal requirements (legibility, delivery of pre-contractual documentation). Floor clauses generally passed this control.

1. Material transparency control (second filter): Verifies that the consumer truly understood the economic and legal significance of the clause. This is where floor clauses were declared null, for failing to pass this enhanced control.

Indicators of Lack of Transparency

The Supreme Court identified several indicators of lack of transparency:

• Creation of an appearance of reciprocity with ceiling clauses, when the ceiling was inoperative
• Insertion of the floor clause together with other financial conditions, diluting its relevance
• Lack of simulations on interest rate evolution scenarios
• Failure to inform the consumer about comparative costs with other products
• Placement of the clause within a tangle of financial data that made comprehension difficult

The Temporal Limitation: Partial Retroactivity

The most controversial aspect of STS 241/2013 was the temporal limitation of the effects of nullity. The Court declared that nullity would not have retroactive effects but would operate from the date of the judgment (9 May 2013). The arguments were:

• The risk of serious disruption to the economic public order
• The good faith of financial institutions that had applied the clause
• Legal certainty

This limitation was enormously criticised by scholars and consumers, as it deprived them of recovering amounts overpaid before the judgment.

The CJEU Judgment of 21 December 2016 (Cases C-154/15, C-307/15, and C-308/15)

Full Retroactivity

The Court of Justice of the European Union (CJEU) corrected the Spanish Supreme Court in a judgment of enormous significance. In response to several preliminary questions raised by Spanish courts, the CJEU declared that the temporal limitation of nullity was incompatible with Article 6(1) of Directive 93/13/EEC on unfair terms in consumer contracts.

The grounds of the CJEU judgment were:

1. Deterrent effect: The Directive requires that the nullity of an unfair term have a real deterrent effect on professionals. If all unduly collected amounts are not returned, the deterrent effect is lost.

1. Full restitution: The consumer is entitled to restitution of all amounts overpaid from the beginning of the application of the unfair term, not just from the date of the declaratory judgment.

1. Effective protection: Member States cannot limit in time the restitutionary effects of the nullity of unfair terms for reasons of legal certainty or general interest.

Impact on Spanish Case Law

Following the CJEU judgment, the Spanish Supreme Court rectified its doctrine (STS 123/2017, of 24 February) and recognised the full retroactivity of the nullity of floor clauses. Since then, consumers can claim all amounts overpaid from the beginning of the mortgage.

How to Claim a Refund: Step-by-Step Procedure

Step 1: Verify the Existence of the Floor Clause

The first step is to review the mortgage deed (or loan agreement) to confirm that it contains a floor clause. This usually appears in the financial conditions, under headings such as "limit on interest rate variation", "minimum interest rate", or "rate limitation clause".

Step 2: Prior Extrajudicial Claim

Since Royal Decree-Law 1/2017 of 20 January, consumers must submit a prior extrajudicial claim to the bank before going to court. The procedure is:

1. Submit a written claim to the bank's customer service department
2. The bank has three months to respond
3. If the bank accepts the claim, it must calculate the amount to be refunded and inform the consumer
4. If the consumer accepts the proposal, an agreement is signed
5. If the bank does not respond within the deadline or rejects the claim, the judicial route opens

Step 3: Calculation of Amounts to Recover

The calculation of amounts includes:

• Difference between what was paid and what should have been paid: The difference is calculated month by month between the instalment paid (with the floor applied) and the instalment that would have been paid with the real reference index without a floor.
• Legal interest: On the amounts unduly collected, interest accrues from the date of each undue collection.

Step 4: Judicial Route If Necessary

If the extrajudicial claim fails, the consumer may file a lawsuit:

• Ordinary proceedings: If the amount exceeds EUR 6,000 (typical in floor clause cases).
• Legal costs: Case law has been ordering banks to pay costs when they reject well-founded extrajudicial claims and are subsequently found liable at trial.

Banks' Defence: Common Arguments

Individual Negotiation

Banks frequently argue that the clause was individually negotiated and is not a general contractual condition. The Supreme Court has rejected this argument in most cases, as the burden of proving individual negotiation falls on the professional (Art. 82.2 TRLGDCU) and floor clauses were rarely the subject of genuine negotiation.

Sufficient Transparency

Another common argument is that sufficient information was provided to the consumer. Case law requires that information not be limited to merely reading the clause before a notary but must include simulations, comprehensible explanations, and adequate pre-contractual documentation.

Limitation of the Action

Banks have pleaded the statute of limitations for the restitution claim. However, the majority case law considers that the nullity action (declaratory) is not subject to limitation, and that the restitutory action prescribes five years from when nullity was declared, not from when instalments were paid.

Current Issues and Recent Developments

Floor Clauses and Income Tax

The refund of amounts overcharged has tax implications. If the borrower deducted mortgage interest in their income tax return (main residence deduction, transitional regime), they must regularise the deductions applied to the unduly charged interest, but without penalty or late-payment interest.

Subrogated and Novated Mortgages

Floor clauses in mortgages that were subrogated or novated raise additional questions. Case law admits claims in these cases too, unless it is proven that the extinctive novation was genuinely negotiated and the consumer understood they were waiving their claim.

Relationship with the IRPH

The floor clause issue has paved the way for claims regarding the use of the IRPH (Mortgage Loan Reference Index) as an alternative index to the Euribor, with increasing litigation and pending definitive CJEU rulings.

Lexiel as a Tool for Banking Claims

Floor clause claims require a combined analysis of national legislation, EU law, and abundant and evolving case law. Lexiel can assist the lawyer with:

• Case law search: Finding rulings from the Supreme Court, Provincial Courts, and CJEU on floor clauses, filterable by bank, clause type, and outcome.
• Amount calculation: Verifying the methods for calculating amounts to be refunded and applicable interest.
• Deadline verification: Checking applicable limitation periods and current legislation on extrajudicial claims.
• Drafting claims: Generating draft claims grounded in the most recent case law, verified against official sources.

Lexiel's anti-hallucination guarantee is crucial in this field, where citing an incorrect ruling or a wrongly numbered article of Directive 93/13 can seriously damage the procedural position.

Frequently Asked Questions About Floor Clauses

Can I claim if I have already paid off the entire mortgage?

Yes. The nullity action is not subject to any statute of limitations, and the restitution action does not prescribe merely because the mortgage has been paid off. What matters is that the clause was null for lack of transparency, regardless of whether the loan is ongoing or fully amortised.

How much can I recover?

It depends on the floor applied, the actual reference rate during the life of the loan, and the loan's duration. On average, floor clause claims have ranged between EUR 5,000 and EUR 30,000, although for long-duration mortgages with high floors, amounts can be significantly higher.

Do I need a lawyer to claim?

For the extrajudicial claim, a lawyer is not mandatory but is recommended. For the judicial route, if the amount exceeds EUR 2,000 (typical), a lawyer and court representative (procurador) are mandatory.

Who pays the legal costs?

The majority case law orders the bank to pay costs when the claim is fully upheld. If the claim is partially upheld, each party typically bears their own costs.

¿Do floor clauses also affect self-employed persons and businesses?

The protection of Directive 93/13 and the TRLGDCU applies to consumers. Self-employed persons and SMEs contracting outside their professional field may be considered consumers. Those contracting within their business activity do not enjoy this enhanced protection, although they may invoke nullity for defects of consent (Arts. 1261-1270 CC).