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The arras contract: how deposits work and how not to lose yours
The private contract you sign before completion decides what happens if the deal falls through. Get the wording wrong and the deposit can be gone.
What the arras contract is
The contrato de arras is the private purchase agreement signed once due diligence is clear and before the notarial deed. You typically pay around 10% of the price and fix a completion date. It is binding, so it should never be signed in a hurry or without legal review.
Three kinds of arras — the difference matters
- Arras penitenciales (Art. 1454 Civil Code): either side may withdraw. If the buyer pulls out, they lose the deposit; if the seller pulls out, they repay double. This is the most common form for a clean exit.
- Arras confirmatorias: simply confirm the sale. If a party defaults, the other can demand completion or damages — there is no agreed "buy-out".
- Arras penales: the deposit is a penalty, but completion can still be enforced.
The label alone is not decisive — Spanish courts look at the substance of the wording. A contract that says "arras" but reads as confirmatory can leave you exposed to a claim for specific performance.
What we negotiate for a buyer
We make sure the contract identifies the property correctly against the Land Registry, lists exactly what is included, sets realistic completion timing, and protects your deposit if a hidden problem (a charge, a licence defect, a community debt) emerges before signing. On new builds, the equivalent protection is the bank guarantee.
The golden rule
Never pay arras before due diligence is complete. The deposit is the moment your money is genuinely at risk; everything that protects it has to be in the contract you sign that day.
This guide is general information, not legal advice for your specific case, and tax and planning rules in Spain change frequently. For advice on a particular property, get in touch for a free consultation.
