Resolution and early maturity: yes, you can now argue and win
The Legal Background
Since 2019, several Supreme Court rulings have declared early maturity clauses (“cláusulas de vencimiento anticipado”) null and void in certain cases.
These include the Supreme Court Judgments (STS) of 11 September 2019, 12 November 2019, 14 November 2019, and 12 December 2019.
These rulings set the basis for determining when an early termination clause can be considered valid:
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When the debtor’s non-performance is serious or essential, justifying the lender’s claim for the total outstanding debt.
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When the clause defines what constitutes a serious breach and gives the consumer a chance to fulfil their obligation.
(Reference: Spanish Supreme Court Judgments – Consejo General del Poder Judicial).
Mortgage Loans Signed After June 2019
In response to these rulings, the legislator approved the Law 5/2019, of 15 March, Regulating Real Estate Credit Contracts, which entered into force on 16 June 2019.
This law states that non-payment of 3% of the principal loan amount constitutes a serious breach if the default occurs during the first half of the loan term.
During the second half, the breach is serious when there are 12 unpaid monthly instalments, provided that the lender has granted the borrower one month to settle the debt.
This rule applies to mortgage loans signed after June 2019. But what about those signed earlier?
Mortgage Loans Signed Before June 2019
Before the entry into force of Law 5/2019, the legislation did not specify what constituted serious non-compliance.
Therefore, the law’s effects are “ex nunc” (from now on), not “ex tunc” (retroactive) — meaning it does not automatically apply to earlier contracts.
In such cases, the judge must decide whether the debtor’s non-performance is serious enough to justify termination.
However, on 6 June 2022, the Spanish Supreme Court, in its Ruling No. 465/2022, expressly stated that a long-term and substantial default can constitute serious breach, validating early termination through Article 1,124 of the Spanish Civil Code.
(Reference: Civil Code, Article 1124 – BOE).
Non-Payment of 56 Mortgage Instalments
In its Fourth Legal Basis, the Supreme Court clarified:
“It has been proven that the parties entered into a 30-year loan for €76,000 on 9 November 2006.
The borrower stopped paying instalments from 9 July 2012.
After five years without payment, the lender filed a claim on 2 June 2017 requesting contract termination and payment of the outstanding amount.”
The Court held that the non-payment of 56 instalments clearly constituted a serious and essential breach, thus validating early termination of the contract.
This ruling confirms that, for mortgages signed before June 2019, early resolution via Article 1124 is legally valid when the breach is extensive and proven.
Legal Guidance from Frau Legal
At Frau Legal, we specialise in real estate and mortgage law in the Balearic Islands.
Our team reviews mortgage contracts and early maturity clauses to ensure they comply with current legislation and Supreme Court doctrine.
If you signed your mortgage before June 2019, you may have grounds to challenge unfair terms or defend against early termination actions.
Frau Legal provides expert legal advice to protect your rights and help you navigate these complex situations successfully.
