Seller's Luck: German Courts Strike Down Early Repayment Charges on Real Estate Loans
Sparkasse Doesn't Require Upfront Payment - Clause in Contract Fails to Satisfy Criteria
Key Insights:
- The Federal Court of Justice (BGH) rules that a common contract clause used in Sparkasse's real estate loans is insufficient, making early repayment charges invalid for customers who have sold their financed properties.
- Many savings banks, cooperative banks, Commerzbank, and other major German banks have similar loan agreements and may be affected by this ruling.
- If you've taken out a real estate loan with a participating bank and sold your financed property before the end of the interest rate tie, you may be eligible for an early repayment charge refund.
Ut-Oh! Say goodbye to those pesky early repayment charges on your real estate loans. Have you sold your property that was financed by Sparkasse or other major German banks like Volks- and Raiffeisenbank, Sparda-, PSD-bank, or Commerzbank during the years 2016 to 2020? Then, congratulations! The Federal Court of Justice (BGH) has changed the game for good.
As it turns out, the contract clause used by Sparkasse was deemed insufficient by the BGH, making their claim to the early repayment charge invalid. In this particular case, the customer was to receive a staggering €7,600 refunded.
Keep in mind that it's not just a one-off case — this ruling affects numerous credit agreements due to the identical templates used by most German savings banks. Anyone who financed a property within the specified time frame and had to pay an early repayment charge upon selling is in a good position to claim a refund, especially if the loan was settled after 2021 as it cannot be time-barred. However, earlier cases need to be examined individually.
This decision is another dash against the banks' appeasement when it comes to the premature termination of mortgage loans. In the past, high court decisions against Commerzbank and a bank from the cooperative association have set similar precedents.
So what does all this mean for you? If you have a real estate loan with a Sparkasse, Volks- and Raiffeisenbank, Sparda-, PSD-bank, or Commerzbank, and you sold your property before the end of the interest rate tie, there's a high chance that you can reclaim a paid early repayment charge.
Time to dust off those loan documents and get cracking! A professional check to see if the mentioned rulings apply to you could be done without any cost or obligation at the Interessengemeinschaft Widerruf.
This ruling by the Federal Court of Justice (BGH) could potentially lead to a refund of early repayment charges for individuals who sold properties financed by Sparkasse, Volks- and Raiffeisenbank, Sparda-, PSD-bank, or Commerzbank during the years 2016 to 2020. In the larger business context, this decision may have implications on employment policies, particularly for banks' human resources departments responsible for reviewing and updating loan agreements in light of changing community policies and court rulings. However, the exact impact on employment policies remains to be seen, as each case may require individual examination.
