Why a housing loan from an employer can cost you

Despite the drop in rates, getting a mortgage remains complicated. The solution is to ask your bank for preferential loans (1 to 2% on part of your credit). Another thing is to get a helping hand from your boss. But this welcome help in these volatile times can be expensive for employees who ask for it. Because it carries a risk: having to pay off your debt in case you leave the company.

The policy, although pre-planned between the two parties, which the employee dismissed by Axa Assurance challenged in court. The Court of Cassation ruled in favor of the employer. A company can provide a loan to an employee, but if he leaves it through dismissal or resignation, the employee may be required to immediately repay the balance of the loan in addition to compensation, the Court of Cassation ruled in a decision issued on 2. . There is no abuse by the employer if the loan agreement provides for such early repayment, even if he is not obliged to demand these amounts.

This is how the dismissed Axy executive stood up to his boss, who, due to his departure, demanded that he pay back the balance of the real estate loan, which was granted to him seven years ago for the purchase of housing. The company also demanded compensation for default by the borrower, as stipulated in the Consumer Code, which regulates business loans.

Good will of the boss

The loan agreement provided for early repayment in the event of the employee leaving, whether he was fired or resigned, but that was an unenforceable clause, the employee argued. According to him, it is unusable because it is tied to the good will of the creditor, who according to the contract is not obliged to demand this early repayment. It is written, he noted, that the loan will be immediately payable in the event of leaving the company, “if it seems good to the lender, without having to go through any legal formalities.»

The judges did not specifically respond to this argument. They only noted that early repayment, which could be required in the event of dismissal or resignation, was also associated with “the initiative of the employer in the case of termination and the initiative of the employee in the case of termination.» And since the termination was justified, they conceded that the company could use this early repayment clause.

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