The arras contract is the binding private purchase contract in Spain. Signed wrong it loses you a 10% deposit; signed right it protects it, locks the deal and dictates the timeline to completion.
The contrato de arras is the most important piece of paper most property buyers and sellers in Spain ever sign. It is a legally binding private contract between buyer and seller, usually signed 2–12 weeks before the public deed, in which the buyer pays a deposit — typically 10% of the price — and both sides commit to completing on agreed terms by an agreed date. Breach it and the financial consequences are automatic and severe.
Three legal forms exist under Spanish law, and they behave very differently. The most common by far is the arras penitenciales (Article 1454 of the Código Civil): if the buyer walks, they lose the deposit; if the seller walks, they must return double the deposit. The alternative forms — confirmatorias (pure down payment, no withdrawal right) and penales (penalty clause on top of enforceable specific performance) — are used less often but matter enormously when they are.
Most international buyers sign whatever the estate agent or the seller’s lawyer puts in front of them — often a one-page generic template with no conditions precedent, no inventory, no timeline penalty, and no express reference to which form of arras applies. That is how deposits get lost. A well-drafted arras contract is a commercial negotiation in its own right; it is also the single biggest legal lever a buyer or seller has in the transaction.
Platinum Legal Spain drafts, negotiates or redrafts arras contracts on every conveyancing file — for buyers and sellers, resale and new-build, private and corporate, residents and non-residents. This page sets out how the three forms work, what a good arras contains, where deposits get lost, and how we structure the contract to protect our client’s position.
They look similar. They are very different. Getting the distinction wrong is a common source of disputes.
The default in most resale transactions. Article 1454 CC. Either party can withdraw: buyer forfeits the deposit; seller returns double. Both parties get a clean exit in exchange for the cash consequence. Most buyer-friendly on withdrawal rights — and most seller-friendly if the market rises and they get a better offer.
Pure down payment. Confirms the deal, no built-in withdrawal right. If either party breaches, the injured party can enforce specific performance (force completion) or sue for damages. Used in commercial deals and by sellers who want a very tight commitment.
Deposit plus a penalty clause. The non-breaching party keeps the deposit and can also sue for damages or specific performance. Used where the seller wants both the financial cushion and the enforcement teeth. Rare but powerful.
In a rising market, sellers occasionally receive a higher offer after signing arras. Under penitenciales, they can take the higher offer, return your deposit doubled, and walk away — the legal system permits it explicitly. Under confirmatorias they cannot: you can force them to complete at the agreed price via court order. Under penales you can keep the deposit and also force specific performance, or take damages.
If your contract does not expressly state which form applies, Spanish courts default to a complex interpretation exercise — usually leaning toward confirmatorias, but not always. Ambiguity is the enemy. Every arras contract we draft or review names the form on the face of the document, cites the relevant Civil Code article, and spells out the consequences in plain terms.
Most Spanish estate agents insist on a contrato de reserva — a one-page reservation form with a small deposit (commonly €3,000–€6,000) paid to the agent to take the property off the market for 2–4 weeks. The reservation is not the arras; it is a preliminary hold while legal due diligence is done, at which point the parties sign the full arras with the larger 10% deposit. Reservation contracts are routinely drafted to favour the agent — non-refundable deposits, no legal conditions precedent, no specific property identified. We review (or replace) every reservation contract before a cent is paid.
The ways international buyers and sellers lose six-figure sums on arras contracts — every one avoidable with independent legal review.
Deposits paid into a seller’s personal account have no recourse if the seller vanishes, becomes insolvent, or disputes the deal. Funds should flow through the buyer’s lawyer’s regulated client account or a notary deposit account.
An arras signed before mortgage approval, due diligence, or NIE is a bet. If finance falls through or the property has issues, the buyer loses the deposit with no contractual escape.
Buyers assume penitenciales and walk, expecting to lose only the deposit — only to be sued for specific performance because the contract was actually confirmatorias. Or sellers assume they can walk away by returning double, only to be forced to complete.
The buyer cannot raise funds in time. Under penitenciales the seller can treat the date as fatal, keep the deposit and re-market. Strong arras contracts include a short cure period; weak ones do not.
The seller’s property turns out to carry an embargo or mortgage the seller cannot clear. Without explicit contract language on what happens, buyers sometimes get stuck in a stalemate — money in, no title out.
Paying arras plus stage payments to a developer without Law 20/2015 bank guarantees is the fastest route to losing six figures if the developer fails.
Sellers face their own arras pitfalls. Below is what we watch for when we act on the sell side.
If the buyer depends on their own home sale, arras should include clear conditions and a realistic completion date. Otherwise the seller is locked in while the buyer waits.
Buyer mortgage approval is the single largest external risk. Good arras name the bank, the indicative LTV, and a cut-off date for approval — with deposit forfeit if the buyer has not secured finance by that date.
International buyers moving funds from sterling or dollars can slip on timing. Sellers should insist on a firm completion date rather than "subject to funds cleared".
Buyers occasionally try to reduce the price post-arras based on a survey report. Clean contract language prevents this unless the survey reveals undisclosed structural issues.
Aggressive buyer lawyers sometimes press for post-arras discounts on "newly discovered" issues. A properly drafted due-diligence condition before arras neutralises this.
Sellers need the arras to clearly state the 3% buyer withholding via Modelo 211, so the buyer does not mistakenly pay 100% of the price and then owe Hacienda the extra 3% personally.
The sequence and remedies depend on the type of arras and the facts. Here is how each form plays out in practice.
Seller keeps the deposit. No further action needed — the deposit is the full and final remedy. Seller can re-market the property immediately. Deposit is taxable as income in some scenarios.
Buyer receives double the deposit back. If the seller refuses to pay, the buyer sues for the double return plus interest and legal costs. Not a fast process — expect 12–24 months through Spanish courts.
Seller can sue for specific performance (force the sale at the agreed price) or damages. Deposit stays with seller pending outcome. Real enforcement option but slow and expensive.
Buyer can sue for specific performance (force the sale at the agreed price) or damages. Effective where the market has risen and the seller walked for a better offer.
Non-breaching party keeps (or receives) the deposit AND can sue for damages or specific performance. The strongest remedy — but used almost exclusively in commercial contexts.
Either party can propose mutual cancellation. If agreed in writing, the deposit is typically returned in full. Useful when a material external issue (planning, finance, health) affects both sides.
It is a private, binding purchase contract between buyer and seller of Spanish property, signed before the public notarial deed (escritura pública). The buyer pays a deposit — typically 10% of the price — and both parties commit to completing on agreed terms by an agreed date. It is not just a "reservation" or a "holding deposit" — it is a full legal contract enforceable under Spanish law.
10% of the purchase price is standard. On higher-value transactions this sometimes drops to 5–6%; on very small or very tight-market transactions it can rise to 15%. The figure is negotiable between the parties, but 10% is the default most estate agents and lawyers will propose.
Penitenciales allow either party to withdraw: buyer forfeits the deposit; seller returns double. Confirmatorias confirm the deal with no built-in withdrawal right — breach exposes the party to enforcement (specific performance) or damages. Penales combine a penalty deposit with the right to sue for damages or specific performance on top. The consequences are very different; the contract should always name which form applies.
Under penitenciales you lose the deposit — nothing more. Under confirmatorias the seller can sue to force you to complete, or seek damages. Under penales the seller keeps the deposit AND can sue on top. Before signing any arras, confirm in writing which form applies. If it is not clear on the face of the contract, do not sign it.
Under penitenciales the seller must return double the deposit. Under confirmatorias or penales you can sue for specific performance (force the sale at the agreed price) or damages. Seller withdrawal is common in rising markets where the seller receives a higher offer after signing.
Only if the arras contains a mortgage-approval condition precedent. Without one, mortgage refusal is your problem, not the seller’s — you lose the deposit under penitenciales. We always include a mortgage condition with a clear cut-off date for buyers who are financing the purchase.
No — and do not. Bank transfer from your home-country or Spanish account into your lawyer’s regulated client account, or a certified banker’s cheque, is the standard. Cash is strongly discouraged — Spanish anti-money-laundering law prohibits real-estate cash payments above €10,000, and Hacienda routinely queries cash transactions in property transfers.
Typically 1–3 months for resale. Longer if mortgage finance is involved. Off-plan has its own contractual calendar (often 12–24 months). The exact period is a commercial negotiation — both sides want enough time for due diligence, finance and planning, but not so much that the market moves against them.
Yes, but only by written mutual agreement — a formal prórroga or extension document signed by both parties. Oral extensions are not reliable. If a party unilaterally misses the completion date without a written extension, the breaching party is exposed to the full arras consequences.
Usually not. The arras is a private contract, signed by both parties — often at the lawyer’s office or the estate agent’s office. Some parties elevate it to a public document (elevación a público) at the notary for added enforceability, particularly for higher-value deals or where the seller wants extra comfort on the buyer’s commitment. Elevating is optional and adds a modest notary cost.
Yes, if the arras has been elevated to a public document. Registration gives the buyer priority over third-party claims between arras and completion — useful protection when the gap is long or the seller’s position is risky. Not commonly done on standard residential files but worth considering in complex deals.
A well-drafted arras makes completion conditional on clean title, no undisclosed charges, and satisfactory due diligence. If the lawyer uncovers a material issue, the buyer can walk with deposit returned or require the seller to cure the issue at completion. Without those conditions, the buyer risks losing the deposit over an issue the seller should have disclosed.
Legally no — but contractually it is the single most important document in the purchase. Signing it without an independent lawyer (not the agent’s, not the seller’s) is the highest-risk moment in a Spanish property transaction. We review or redraft every arras contract our clients sign, in English, before a single euro moves.
Yes. A bilingual property POA typically includes powers to sign arras contracts within stated price limits. This is how many of our non-resident clients complete the full transaction remotely, including the arras signing.
Yes, if both parties agree. Most arras contracts we handle for international clients are bilingual — Spanish in one column, English in the other — with Spanish prevailing in case of conflict. Pure English-language arras are enforceable between the parties but can create issues at the notary and Land Registry, which is why we default to bilingual documents.
We draft, redraft or review every arras contract our clients sign. Book a consultation and we will quote in writing within one working day.
The information on this page is general guidance only and does not constitute legal, tax, or financial advice. Spanish property, lending, licensing and community regulations vary by region and individual circumstances. Always obtain advice from a qualified professional before acting. Platinum Legal Spain is an independent English-speaking legal and immigration practice serving international clients across Spain.