Protection of consumer rights and fulfilment of the requirement for effective judicial protection
The Court of Justice ruled in its judgment in case C-351/23 of 24.06.2025 that, in order to ensure the protection of consumer rights and to meet the requirement of effective judicial protection, it is necessary that consumers, subject to certain conditions, be granted the right to challenge the legality of the transfer of ownership to a third party resulting from the forced execution of a mortgage lien established on the property serving as their family home.
A bank based in the Slovak Republic provided a married couple with a loan of 63 000 Eur, with an agreed maturity date of January 2030, repayable in regular monthly instalments. The general terms and conditions of the loan included a contractual clause according to which the bank was entitled to demand immediate repayment of the entire outstanding amount in the event of default. This claim was secured by the creation of a lien on the property used as the debtors' family home.
Due to non-fulfillment of contractual installments, the bank proceeded to enforce the mortgage lien in the form of an extrajudicial auction. The debtors filed a lawsuit, in which they objected to the violation of consumer rights and requested the suspension of the enforcement of the lien. Despite the ongoing proceedings, the family house was auctioned off by a legal entity. Both the auction organizer and the purchaser were informed of the legal proceedings in advance.
After refusing to evict the property, the acquiring company filed a lawsuit for eviction. The debtors responded with a counterclaim, in which they challenged the legality of the transfer of ownership on the grounds of violation of consumer rights and the right to housing. The Regional Court in Prešov referred the case to the Court of Justice of the EU.
The Court of Justice found that the circumstances of the transfer of ownership, in particular the active approach of the debtors in opposing the extrajudicial enforcement and the existence of indirect evidence of a possible unfair contract term, justified the application of the protection under the relevant Directive on unfair terms in consumer contracts. The consumers had used the available legal remedies and informed the persons concerned of their actions. According to the Court of Justice, the legal proceedings before the Regional Court in Prešov therefore fell within the scope of the Directive.
The Court further found that national legislation allowing the extrajudicial enforcement of a lien on a family home despite ongoing proceedings for its suspension and the existence of indications of an unfair contractual term is contrary to EU law. The infringement is more serious if the legislation does not allow for the validity of such enforcement to be reviewed subsequently by a court.
