In this Ruling, the Directorate General examines the appeal filed by a Notary Public of Estepona in the light of the refusal of the Land Registrar to record a mortgage deed as a guarantee for a loan on a current account in its modality as a Reverse Mortgage or Equity Release. He alleged that certain financial and early repayment clauses are contrary to the principles of our legal system, even when the mortgage deed clearly indicated the main amount of the debt and any corresponding interest agreed upon, or the maximum amount of the mortgage liability, identifying the obligations guaranteed and their duration.
The present ruling is of undeniable interest as it determines that the registrational control over financial and early repayment clauses will be limited only to those which may contravene the legislation in force. Said control cannot be extended to those other aspects which as they are undetermined juridical concepts, may only be declared abusive by virtue of a specific judicial resolution.
Furthermore, this new pronouncement states that the afore-mentioned financial and early repayment clauses, to which the reformed Article 12 of the Mortgage Law refers, must be recorded in the Land Registry, under the condition that the Registrar deems favourable those clauses which have property right significance and configure the property right of the mortgage.
Further to the foregoing, the present ruling also confirms what the Supreme Court has stated on other occasions in relation with the clauses which prohibit the mortgage debtor from carrying out actions such as selling, mortgaging, encumbering or leasing the property and the subsequent early repayment in these cases. It established that said clauses must be considered as abusive and thus cannot be recorded, as it would be limiting the dispositive power of the mortgagor, something that is not allowed in our legal codes, except when it is a matter of business without valuable consideration, and even in those cases, it is limited in time. Together with the foregoing, the Directorate General distinguishes the precedents of the obligations of not ordering what does not have a property right significance and only a merely binding content, admitting that in certain circumstances, they may be accepted, although it would be merely for binding purposes between the parties.
In addition to the foregoing, the Directorate General establishes that it is out of proportion to attribute a resolutory nature to any breach, as this is only possible when it is a matter of a breach in an obligation of special relevance and, under no circumstances, if it is a matter of accessory obligations or irrelevant breaches.
As a matter of conclusion, we should say that the registrational reflection of early repayment clauses and other financial clauses should necessarily be carried out under the same terms as the corresponding mortgage deed, unless its nullity has been declared by means of a judicial decision or was considered objectively contrary to a legal regulation. However, under no circumstances can the registrational activity undertake to evaluate the circumstances under which the supposition of a specific event has been carried out.