Does a clause in your mortgage offer seem illegal to you? We advise you to read this file. You will find there the recommendations of the unfair terms commission, the black list established by the Law of Modernization of the Economy as well as the edifying results of a survey carried out by the General Direction of competition, consumption and repression fraud with banks and credit brokers.
The lists established by the Decree of March 18, 2009
The black list
Decree n ° 2009-302 of March 18, 2009, drew up a list of 12 clauses considered to be unfair. If your loan offer includes a condition appearing in this ” black list”, its effect is null and you can ask for its pure and simple deletion.
They are not always applicable as such to a loan, but here are some examples that we have made transposable to the loan contract. You will find the link to the decree at the end of the page.
- Acceptance of clauses which are not included in the contract and of which he is not aware.
- Limitation of the lender’s obligations to honor its contractual commitments.
- The possibility is given to the lending organization to unilaterally modify one of the terms of the loan contract.
- The borrower is prohibited from repaying in advance all or part of the capital remaining due
The gray list
Even if they are not strictly prohibited by law, the clauses appearing in this ” gray list ” are presumed to be unfair. Here are some examples of loans.
- Prepayment costs are higher than the maximum allowances provided for by law.
- Limitation or removal of the borrower’s rights to seek justice in the event of a dispute.
Important: if a clause appearing in one of the two lists is inserted in your loan contract, it is up to the bank to prove that it does not contain any illegal character.
Recommendations of the Unfair Terms Commission
The CCA is placed under the authority of the Minister of Consumer Affairs. It is made up of lawyers (magistrates and legal professionals), consumer associations and representatives of professionals. It meets regularly to give its opinion, in particular at the request of the judges, but it also responds to letters from consumer associations.
Note: the role of the CCA is limited to issuing an opinion but its recommendations are very often followed by the judges.
In its recommendations n ° 04-03 published in the BO of 30/09/2004, the unfair terms commission (CCA) lists 7 illegal conditions that can appear in a loan contract.
On fees and penalties
The Commission considers that any written provision providing that the costs and penalties resulting from a legal procedure will be borne in full by the borrower is contrary to Article 696 of the Code of Civil Procedure which leaves it to the judge alone to assess. which comes back to paying court fees.
On variable rates
The bank is required to inform the borrower sufficiently in advance to allow it to exercise one of the options provided for in its variation clause. The CCA considers it arbitrary that without a response from the borrower, the lending organization applies a default option even though it has failed to fulfill its duty to inform.
The bank can offset the sums due for the mortgage with those for which it would, in turn, be indebted to the borrower (savings books, bank account). However, the committee considers that associated with an obligation of domiciliation of income extended to all claims this clause makes the situation of the borrower unequal compared to all other creditors.
On the domiciliation of income
We invite you to read the important file that we have devoted to the obligation of domiciling one’s income in return for a mortgage.
On the default of the borrower
The number of fees and taxes required by the bank following a default in the payment of maturities must be justified. The absence of this contract obligation may indeed suggest that the lending organization could exempt itself from justifying the amount to be paid.
On the immediate payment of the outstanding capital
The bank may require the borrower to prepay. For example, if he does not fulfill one of the obligations of the contract, if he has provided false information or if he no longer reimburses his monthly payments.
Even if the possibility of forfeiture of the loan is not necessarily called into question, the CCA considers that leaving the capacity to assess cases of early payment to the sole lender is likely to create an imbalance between the parties, because this suggests that the borrower would not have the right to go to court to challenge the lender’s decision.
Choice of court in the event of a dispute
The Commission considers that the choice of competent courts is arbitrary when it is the sole decision of the bank.
What to do if your loan contract contains an unfair clause?
First of all, it should be noted that a clause should not be considered unfair on the sole pretext that it is contrary to its interests. A contract is binding on both parties and a unilateral termination may be penalized if the reason for it has not been provided for.
The illicit nature of an element of the loan contract is assessed according to the imbalance it creates against the borrower. If you think you are in this case, we invite you to follow this action plan.
Write to your bank
Send a letter to the lender. Copy the clause complained of, explaining that you consider that its character is abusive and demand its withdrawal. Be concise and stick to the facts. No need to “spread out” and let your emotions flow. The goal is to be efficient. If the latter is on the black or gray list, attach a copy of the decree.
Contact a consumer association
If the bank remains in its positions, we invite you to contact a consumer association. An adviser will give his opinion. Sometimes the borrower’s interpretation of a condition is not entirely correct. It must be admitted that the terms used in a loan contract are not always accessible.
If the advisor of the association agrees with you, he will send a letter to the bank ordering him to withdraw the clause in question. In case of doubt, he may also request the opinion of the unfair terms committee.
Take legal action
It is a decision to be made at the very end. Amicable recourse (if necessary with the help of a consumer association ) is generally sufficient to reach an agreement. Otherwise, only a court decision can strike the nullity clause and force the bank to withdraw it from the contract.