Why your building society may cancel you now.
Why your building society is allowed to terminate your contract now.
The BGH has decided today that building societies are allowed to cancel 10 year old contracts.
That is nevertheless times a judgement with correctly large consequence. The German Federal Court of Justice (BGH) today confirmed that it is legal for bausparkassen to cancel high-interest old contracts. Everything you need to know now, comes in this post.
Old home savings contracts
In earlier times, building savers were often ridiculed. The idea of investing your money in a building society contract was too old-fashioned, and there were relatively measly interest rates to boot. Since one could increase or also destroy its money at the stock exchange much faster.
But times have changed. There is hardly any return on normal investments such as savings contracts or call money in the current low-interest period. There contractually assured interest rates of 3 and more percent per year, as is the case with the old building society contracts, suddenly seem really attractive. At least for the savers, the building societies, on the other hand, would like to get rid of the old contracts as soon as possible, because they have real problems earning the guaranteed interest rates.
Therefore, the building societies have already started years ago to cancel the high-interest old building savings contracts, sometimes with unfair means. But the bauspar customers resisted, they wanted to keep their contracts – even if the loans had long since been ready for allocation – and continue to collect the guaranteed interest rates. Numerous lawsuits in the courts have therefore been filed against the building societies.
Ruling of the BGH
Two home loan and savings customers took their case against the home loan and savings bank through all instances to the highest instance, the Federal Court of Justice (BGH). Now they have finally failed. The Federal Court of Justice (BGH) has now ruled that building societies can terminate their customers’ contracts if the loans have been ready for allocation for more than 10 years. (AZ: XI ZR 185/16 and XI ZR 272/16)
Legal background for this decision is the ยง489 BGB. It states that a credit agreement may be terminated after ten years. The building societies refer to this, because they are of the opinion that also a building society credit is in the long run a loan and therefore also here the 10 year period applies. This view was confirmed today by the BGH.
Real estate as an investment
What will happen to you now?
If you have such an old building society contract, with which the loan is longer than 10 years allocation-ripe, then you will receive guaranteed in the next few days mail from your Bausparkasse. You’ll have to swallow the resignation contained therein, willy-nilly.
You will then certainly be one of many other home loan savers throughout Germany, because experts expect a real wave of cancellations in the coming weeks. But head high, also in times of low interest rates there are quite lucrative forms of investment. Stock markets are buzzing despite the euro crisis and Donald Trump.
Long-term consequences
Of course, the champagne corks will have been popping at the building societies today, as they can finally part with the unloved old contracts. But that might be too short-sighted, because the stale aftertaste remains. contracts or. Building societies you can’t rely on anymore, you better want to avoid in the future. This impression will be burned into the minds of today’s and much more potential building savers. Trust is now once the highest property, which one can have at the market.
Therefore, the building societies are finally rid of the old high-interest contracts, but to conclude new contracts will certainly become almost impossible before this horizon. The idea of the building society has thus suffered a great damage today.
