Wohnimmobilienkreditrichtlinie enters into force: Withdrawal still possible until June 21

The entry into force of the Wohnimmobilienkreditrichtlinie heralds the end of the so-called "ewiges Widerrufsrecht" (perpetual right of withdrawal) for real estate loans. It will no longer be possible to withdraw from legacy contracts from June 21, 2016.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The so-called perpetual right of withdrawal is set to be axed for legacy contracts with the implementation of the EU-Wohnimmobilienkreditrichtlinie (EU Directive on Residential Property Loans). This primarily concerns real estate loans concluded between 2002 and 2010.

Banks and savings banks used flawed guidance on the right of withdrawal in the case of many real estate loans from this period of time. As a result, it is still possible to withdraw from a lot of these contracts today because the withdrawal period never commenced. However, this "perpetual right of withdrawal" will now come to an end on June 21, 2016. The much invoked get-out-of-jail-free card can no longer be brandished beyond this date. That being said, consumers can still make use of the remaining time. In view of interest rate developments in recent years, withdrawing from a real estate loan could mean saving five-figure sums of money. Of course, the extent of any savings depends on the loan amount and agreed interest rate conditions.

Consumers who still wish to be able to benefit from the historically low interest rates should first of all have someone assess whether the requirements for withdrawal are met. To this end, they can turn to a lawyer who is competent in the field of banking law (http://www.grprainer.com/en/legal-advice/banking-law.html). Generally speaking, it is possible to withdraw if the bank made use of flawed guidance concerning the right of withdrawal. Even minor substantive or formal deviations from the respective standard instructions can result in the withdrawal period failing to commence.

One also ought to deal with the issue of follow-up financing, as the loan in question will be completely rescinded following a successful withdrawal, i.e. the services performed by both parties to date are returned in full. No early repayment penalty shall fall due. Given that the deadline expires on June 21, 2016, withdrawal should be promptly declared vis-à-vis the appropriate bank. For this reason, it is also to be expected that the banks will not simply accept withdrawal. However, since the legal position is clear in most cases and the relevant case law is consumer friendly for the most part, many banks back down and show a willingness to talk after a lawyer brings pressure to bear upon them.

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