The Arras Contract in Spain: Read Before You Sign

Between "we have agreed a price" and "we sign at the notary" sits a private contract called the contrato de arras. It takes the property off the market, fixes the price, sets the completion date and moves a deposit, customarily around 10% of the price, from you to the seller. It is the most consequential document in a Spanish purchase and the one buyers read least carefully. On a €229,000 property, the median of the price band where we hold 104 live listings, that deposit is €22,900. Worth twenty minutes.

Three kinds of arras. You want one of them.

Article 1454 of the Spanish Civil Code is the one that describes the penitenciales arrangement: the buyer who withdraws loses the deposit, the seller who withdraws returns it doubled. It is a clean, symmetrical, priced right to change your mind, and it is what most buyers assume they are getting.

Here is the problem. That article applies only where the parties have clearly agreed to it. Where a contract simply takes a deposit and says nothing about the type, Spanish courts generally treat it as confirmatorias: a straightforward down payment on a binding sale. In that situation, walking away is not a matter of losing your deposit. The seller may be able to go to court and require you to complete, or claim damages beyond the deposit.

So the first question to ask your lawyer is not "how much is the deposit". It is: does this contract expressly say the arras are penitenciales under article 1454? If it does not, you are not in the deal you think you are in.

The double-deposit rule, in real money

Take the €229,000 example with a 10% deposit of €22,900. Under penitenciales arras:

• You withdraw. The seller keeps €22,900. That is the whole consequence.
• The seller withdraws, usually because someone offered more, and must return €45,800: your €22,900 back, plus €22,900 in compensation.

The doubling is not a punishment so much as a price. It makes gazumping expensive enough to be rare, which is why the Spanish market feels more settled than the English one between agreement and completion. It is also the reason a bigger deposit is a stronger lock on the seller, and a bigger exposure for you. Where the market is competitive, buyers sometimes offer above 10% for exactly that reason. Do it with your eyes open.

Eight things to check before you sign

• The arras type, stated explicitly. Everything else follows from this.
• The completion date, and what happens if it slips. Who bears a delay caused by the bank, the registry, or a document the seller has not obtained? A date with no consequence attached is a wish.
• A mortgage condition (condición suspensiva). If you need finance, the contract should allow you to withdraw with your deposit returned if the loan is formally declined by a stated date. Without it, a lender's no costs you the deposit. See mortgages in Spain for foreign buyers.
• Delivered free of charges, tenants and occupants. Not just free of mortgages. Occupancy is its own risk: see squatters and okupas in Spain.
• Every owner signs. Inherited and jointly owned property is common here. If four siblings own it, four siblings sign, or the contract binds nobody. Check the names against the nota simple.
• The inventory. Furniture, appliances, air conditioning units, the pool robot. If it is not listed, assume it leaves.
• Community fees, IBI and utilities up to date at completion, with the seller responsible for anything before. Unpaid community fees can follow the property.
• Where the deposit is held. Ideally in your lawyer's client account or escrow rather than paid directly to the seller or, worse, into a personal account named in an email. That last one is how buyers actually lose money: see Spanish property scams.

Reserva is not arras

Before the arras you may be asked for a small reservation fee to take the property off the market for a week or two while contracts are drawn. That is a contrato de reserva, it is usually a modest sum, and it is a different animal: often non-refundable, frequently not a binding sale contract at all, and sometimes paid to the agent rather than the seller. It is not automatically wrong. It is wrong to treat it as if it were the arras, and it is wrong to pay it before your lawyer has seen the nota simple. If a reservation is non-refundable, get in writing exactly what would have to happen for it to be returned.

New build works differently

Nearly all of what we sell is new build, 1,900 of our 2,108 live properties, and there the arras conversation is replaced by the developer's private purchase contract. Different structure, different protections:

• Payment is staged against construction milestones rather than a single deposit.
• Every stage payment must be held in a dedicated account and backed by a bank guarantee or insurance policy in your name. Ask for the certificate for each payment.
• The contract is written by the developer's lawyers, and the terms on delays, specification changes and completion vary widely between developers.
• A completed new build carries a ten-year structural warranty.

Have your own lawyer read it before you pay anything at all. More in buying off-plan in Spain and new build versus resale, and browse current developments at new-build property.

Resale properties where this matters most

Four live resales. Each of these would move through a private arras contract, and on each of them the type of arras is the clause we would read first.

Browse the resale side of the book at properties for sale, or property for sale in Ciudad Quesada, where 19 properties are live.

Never sign it the same day

Our practical rule: the arras contract goes to your lawyer, in writing, and comes back with comments before anyone signs anything or moves a euro. Any pressure to sign on the spot (another buyer waiting, an offer expiring tonight, the developer holding a unit for hours) is a reason to slow down, not to speed up. A genuine seller will wait a day for a lawyer's read.

What comes next (the notary appointment, the taxes, the registration) is set out in the complete guide to buying property in Spain, and the money you will need on the day is itemised in the true cost of buying property in Spain. If you cannot be here to sign, a power of attorney handles it.

Tell us your budget below and we will send back what is available, along with a plain-English note on what the contract for each would look like.