The bank must assume the cost of the registered cancellation of the mortgage. This was established in a recent ruling by the Bizkaia Provincial Court (click here to read the original text), which condemned Kutxabank to repay the full amount of the disbursement made by the mortgaged clients to cancel the mortgage that had been granted to them.
In the ruling, the judge rejects the bank’s claim that the mortgagee was the only one interested in removing the burden from the Land Registry. According to the magistrates, the inscription was made in benefit and guarantee of the lender, that is to say of the bank. Hence, reaching the same conclusion as the judgment of instance, states that the cost of cancellation corresponds to the financial institution. If the cost of constitution was unnecessary for the client, neither has to face the burden of registration in the Land Registry, nor the disbursement for the disappearance or cancellation of the same, which would not have existed if it had not been registered.
Kutxabank sought to assert that the clause annulled in instance only affected the costs of incorporation, not those of cancellation of the mortgage, but the magistrates rejected this argument. Once the loan has been paid and the main obligation has been met, the guarantee disappears and the person in whose interest it was registered will also have to pay for the expenses of its disappearance.
This decision forced the bank to reimburse about 600 euros for notary, Land Registry and agency expenses and may be a new setback for financial institutions that force borrowers to assume expenses that do not correspond to them.