If you have completed a real estate loan in the period from 2002 to 2010 and were insufficiently informed about your right of revocation, you have been able to withdraw from your loan indefinitely. However, this will change in the future: on 18 February 2016, the Bundestag amended the right for residential mortgages so that the right of revocation of the old contracts described above ends three months after the law enters into force on 21 March 2016 – ie 21 July 2016. Until then you still have the opportunity to withdraw from your old contract. However, the amendment is not undisputed. Some justify the abolition of the unlimited right of revocation to create more security for lenders. Opponents of the amendment, however, criticize the fact that this legal certainty simultaneously curtails the rights of consumers. In general, however, it is unclear how many customers have ever used the unlimited right of withdrawal in recent years. For newly concluded real estate financing, the right of revocation will then be one year and 14 days from the conclusion of the contract.
The law obliges financial institutions to better protect clients from over-indebtedness
The amendment to the law is the result of the implementation of the EU Residential Property Credit Directive adopted in 2014 and also includes further new regulations, which are likely to be in the interest of consumers. For example, the right of withdrawal is introduced in zero-percent financing, which was previously missing. In addition, lenders will in future be obliged to inform their customers comprehensively before signing a real estate loan and to examine their creditworthiness in detail. The latter serves to protect the customer from being over-indebted or even insolvent. This additional consumer protection extends equally to overdrafts and overdrafts, because banks have the obligation after the entry into force of the change in law, bank customers, at least six months, 75 percent of their disbursed credit, suggest a consultation, in which the customer cheaper alternatives to finance to offer.
BGH decides on action against lack of real estate loan agreements
However, consumer protection has also been dampened by real estate financing. On 23 February 2016, the Federal Court of Justice dismissed a lawsuit filed by a consumer protection association which in two cases had sued credit institutions for failing to present the revocation information in the contract. The association complained that the right of revocation was not sufficiently graphically highlighted or the customers had the opportunity to tick. The BGH, however, held that although the information on the right of revocation must be clear and understandable in the contract, this requirement is not reflected in the design of the contract.