Jacobsen + Confurius

ECJ – Cancellation of vehicle and real estate loans possible – The return of the cancellation joker!

A consumer-friendly ruling by the European Court of Justice (ECJ) gives numerous private borrowers the opportunity to revoke these contracts.

In its ruling of March 26, 2020, the European Court of Justice determined that the form of cancellation instructions often chosen by banks in German consumer credit agreements was not legally compliant. The chain of references to essential legal provisions chosen in the contracts (so-called “cascade reference”) does not meet the requirement of clear and concise information. For the press release: https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-03/cp200036de.pdf

The legal consequence will be that numerous consumer loans, especially real estate loans, but also car financing and private consumer loans, can still be revoked even years later. In recent years, the Federal Court of Justice (BGH) has put a stop to this “cancellation joker” through increasingly anti-consumer case law. This jurisprudence may no longer be upheld.

Therefore, check your building financing, your vehicle loans and other private loan agreements now!

If there are references to Section 492 Paragraph 2 of the German Civil Code (BGB) or Article 247 of the EGBGB, etc. as part of the instructions about the start of the cancellation period, there is a good chance that the contract can still be canceled. This is particularly exciting for the following loan agreements:

1. Real estate financing

For loan agreements for the purchase or construction of real estate, this applies to contracts concluded between June 10, 2010 and June 21, 2016 and still ongoing. Early repayment of the loan is particularly interesting in view of the fact that interest rates have fallen significantly in the meantime or in the event of a sale without the otherwise obligatory payment of an early repayment penalty.

2. Car financing

For vehicle financing, this even applies to all ongoing contracts from June 10, 2010 to today and, if successful, makes it possible to return the vehicle and reclaim the installments paid. Even if some courts believe that compensation must be paid for the duration of use, this is usually significantly lower than the rates previously paid. This opens up new opportunities, especially for financed diesel vehicles with high losses in value.

Check your contracts or contact us if you have any questions. We would be happy to assist you.

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