The contrato de arras: the three types and what commits you
In a Spanish sale, the decisive moment is not the signing at the notary: it is the moment you sign the contrato de arras. This document, often presented as a formality between the offer and the deed, is a real contract. It sets the price, the date of the final signing and, above all, what it will cost you if either side pulls out. Signing it without reading it is the most expensive mistake a seller can make.
First distinction: the reservation is not the arras. The reservation agreement comes earlier; the buyer pays a modest sum so the property is taken off the market while they confirm their financing and review the file. The contrato de arras genuinely commits both parties to the sale, with a far larger deposit — customarily in the region of 10% of the price, though no percentage is imposed by law: it is negotiated.
Spanish law recognises three families of arras, and the difference between them is anything but theoretical: it decides what happens if someone walks away.
Arras confirmatorias simply confirm the agreed sale. The deposit is an advance on the price. Neither party has the right to withdraw: if one does, the other can go to court to demand performance of the sale or damages. It is the most binding form — and it is also the one the courts apply by default when the contract does not clearly say otherwise.
Arras penitenciales, provided for in the Spanish Civil Code, are the most common in residential sales. They buy a right to withdraw: a buyer who pulls out loses the deposit paid; a seller who pulls out has to return it twice over. That doubling is the clause to remember. On a deposit representing 10% of the price, changing your mind because a better offer has appeared is very costly, often far more than the price difference you were hoping for.
Arras penales, finally, work as a fixed penalty for breach, without opening a right to exit: depending on the drafting, the injured party can keep the penalty and also demand performance of the contract. It is the rarest form, and the one that depends most on the exact wording.
How do you know which category you are in? By what is written, and by nothing else. Spanish case law is consistent on this: the right to withdraw is not presumed, it has to appear clearly and unambiguously in the contract. Vague wording will therefore be read as arras confirmatorias — the exact opposite of what many sellers believe, convinced they can walk away simply by giving the money back.
What should a good contract contain? The full identity of the parties, the description of the property with its cadastral reference and its Registro de la Propiedad details, the price and the payment schedule, the amount of the arras and their expressly stated nature, the deadline for signing the escritura, how costs and taxes are split between seller and buyer, the state of charges together with your undertaking to deliver the property free of mortgage and up to date with the gastos de comunidad, and an inventory of the furniture if the property is sold furnished.
One practical detail often decides how calm the whole operation is: where the money goes. The deposit can be paid straight into your account, held by one party's lawyer, or kept in the agency's account. Each option has its consequences if the sale falls through, and the contract must say which one was chosen and on what conditions the sum is released. Remember, too, that this deposit forms part of the price: it will appear in the escritura as an advance already received, and it therefore enters into the calculation of your capital gain as well as that of the 3% withholding if you are not resident.
One point deserves particular attention on the seller's side: the mortgage condition. It allows the buyer to recover the deposit if their bank refuses the loan. The request is legitimate, but it transfers the risk to you: your property stays off the market for weeks with no guarantee of a sale. If you accept it, frame it — a precise deadline, an obligation to produce a written refusal, a set number of banks approached.
Three mistakes come up again and again. Signing arras while another buyer is still in the conversation: you are committed, and the double repayment awaits you if you change your mind. Accepting a very long deadline for nothing in return: the property is frozen for that time. And banking the deposit without having checked your own ability to deliver on the agreed date — mortgage not yet released, estate file still running, cédula de habitabilidad missing. In that last case, you are the one in default.
One last reflex, often overlooked: if the deadline arrives and the buyer does not appear, do not settle for an exchange of messages. Go to the notary on the agreed date and have the non-appearance formally recorded in a notarial act. That document establishes that you, for your part, were in a position to honour your commitment — and it is what will later allow you to keep the deposit or assert your rights without argument.
The arras are a tool, then, not a consequence-free formality: well drafted, they secure your sale; badly drafted, they weaken it. These points are indicative and an abogado should review your contract before you sign. At Alveo Properties, we prepare this document with you and check, before you sign, that the date promised is a date you can actually meet.
