The recent ruling by the European Court of Justice (ECJ) in Case C-347/23 further develops case law on Swiss franc loans and strengthens consumer legal protection.
According to the ECJ’s judgment, an individual who purchases a residential property with the intention of renting it out qualifies as a consumer and is thus entitled to consumer protection. However, the Court sets a criterion that must be examined by the national court in each case: the property must not be linked to the individual’s business or professional activity. In practice, this means that as long as the rental of the mortgaged property is not part of the borrower’s organized and ongoing business activities, they are considered a consumer under the law. Therefore, the ECJ confirmed that merely generating income from renting out a mortgaged property—whether as a private investment or as future security—does not automatically exclude consumer protection against abusive clauses in the loan agreement.
The implications of this latest ECJ ruling should facilitate the courts’ assessment of ongoing Swiss franc loan cases and help standardize judicial decisions in this area.
Anna Malinowska, Legal Counsel
