Reservation Contracts & Arras in Spain – What Buyers Must Know

Once your offer is accepted on a property in Spain, the next step is usually signing a reservation contract or an arras contract and paying a deposit. This is the moment where money changes hands — and where buyers must be careful.

Reservation contracts and arras contracts are legally significant documents. They are not informal agreements. They create obligations for both buyer and seller and can have financial consequences if either party withdraws.

Understanding the difference between these contracts, how deposits are protected, and when money is refundable is essential before you transfer any funds.

What Is a Reservation Contract?

A reservation contract is usually the first agreement signed after an offer is accepted. It removes the property from the market while legal checks begin.

The reservation deposit is typically smaller than an arras deposit and may range from €3,000 to €10,000 depending on the property value.

This agreement should clearly state:

• ✔️ The purchase price
• ✔️ The timeframe to sign the arras contract
• ✔️ Refund conditions
• ✔️ Whether funds are held by the estate agent or lawyer

Before signing, you should already have a lawyer reviewing the property. See: Due Diligence for Resale Property.

What Is an Arras Contract?

An arras contract is the binding private purchase agreement signed before completion at the notary. It typically involves a 10% deposit of the purchase price.

There are different types of arras under Spanish law, but the most common is arras penitenciales.

How Arras Penitenciales Work

Under this arrangement:

• ✔️ If the buyer withdraws without legal justification, they lose the deposit.
• ✔️ If the seller withdraws, they must return double the deposit.

This creates strong financial consequences and is designed to secure commitment from both sides.

When Is a Deposit Refundable?

A deposit may be refundable if the contract includes protective clauses, such as:

• ✔️ Mortgage approval conditions
• ✔️ Successful legal due diligence
• ✔️ Seller failing to provide required documentation

This is why legal drafting is critical. A poorly drafted arras contract can expose you to significant financial loss.

For a full overview of the buying process, see: Buying Property in Spain – Complete 2026 Guide.

Where Should the Deposit Be Held?

Spain does not operate escrow accounts in the same way as some other countries. Deposits are usually held by the estate agent, the seller’s lawyer, or the buyer’s lawyer depending on the agreement.

For maximum protection, many buyers prefer deposits to be held by their independent legal representative until due diligence is completed.

Common Mistakes Buyers Make

• ❌ Signing a reservation contract without legal review
• ❌ Transferring funds directly to the seller
• ❌ Not including mortgage or due diligence clauses
• ❌ Assuming deposits are automatically refundable

Once an arras contract is signed, reversing it can be difficult and costly.

How Platinum Legal Spain Protects Buyers

We review, amend and negotiate reservation and arras contracts to ensure:

• ✔️ Clear refund clauses
• ✔️ Legal due diligence protection
• ✔️ Fair completion timelines
• ✔️ Transparent deposit handling

📞 Spain: +34 868 480 646
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📱 WhatsApp: +34 659 111 210
✉️ Email: info@platinumlegalspain.com