Between the accepted offer and the notary, there is a document most foreign buyers meet exactly once: a private contract, usually drafted by the seller’s side, asking for 10% of the price within days. This is the arras contract in Spain that closes nearly every resale purchase, and it is the real point of no return in the transaction. Sign the wrong version and you can lose the deposit, or find yourself legally obliged to complete a purchase you wanted to walk away from. Spanish law recognises three distinct types of arras with very different consequences, and the default when the contract is vague is not the one most guides assume. Here is what the contract does, which type protects you, and what has to be negotiated in before you sign.
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What the arras contract actually does
The contrato de arras is a private deposit contract signed after the offer is accepted and before the public deed (escritura) at the notary. It fixes the price, the completion deadline, the penalty regime, and who pays which costs. The buyer typically hands over 10% of the purchase price — a market convention, not a legal requirement — and pays the remaining 90% at the notary.
Two things surprise foreign buyers. First, the contract is fully binding without a notary: a private document signed at a kitchen table commits both parties. Second, everything is negotiable at this stage and almost nothing is negotiable after it. The completion date, the financing condition, the furniture, the tax split between the parties: whatever is not written into the arras is decided later by law and case law, rarely in the direction you would have chosen.
The three types of arras — only one lets you walk away
The Spanish Civil Code and the courts distinguish three types. Most guides treat “arras” as if it always meant the first one. It does not.
| Type | What the deposit is | If the buyer pulls out | If the seller pulls out |
|---|---|---|---|
| Arras penitenciales (Art. 1454 CC) | The price of a walk-away right for both sides | Forfeits the deposit, no further liability | Returns double the deposit, no further liability |
| Arras confirmatorias | An advance on the price, proof the sale is agreed | Other party can sue for completion or full damages | Same: buyer can sue to force the sale or claim damages, not capped at the deposit |
| Arras penales (Art. 1152 CC) | A pre-agreed penalty for breach | Pays the penalty; the other party may also be able to demand performance if the contract allows it | Same, in reverse |
The part that matters: if the contract does not clearly say which type it is, Spanish courts treat the arras as confirmatorias. The Supreme Court applies a restrictive doctrine (STS 583/2018 of 17 October, building on STS 581/2013): the walk-away right of arras penitenciales must be agreed unequivocally, and even a bare citation of Article 1454 in the contract is not enough on its own. The clause has to spell out that either party may withdraw, the buyer losing the deposit and the seller returning double.
The practical consequence is the opposite of what most buyers believe. Under a vague or confirmatorias contract, “walking away and losing my 10%” is not an option you hold. The seller can go to court and demand you complete the purchase, or claim damages that are not limited to the deposit. If you want the clean exit price that arras are famous for, the contract must say arras penitenciales and describe the mechanism expressly.
What to negotiate in before you sign
The arras is where a buyer’s legal counsel earns their fee. Before signing, these belong in the text:
- The type, stated expressly. Arras penitenciales with the full Article 1454 mechanism written out: buyer withdraws and forfeits, seller withdraws and returns double. Not implied, not cited by article number alone.
- A financing condition (condición suspensiva de financiación). If the bank declines the mortgage, the contract dissolves and the deposit comes back. Sellers resist it and some markets price it, but for a buyer who needs financing it is the single most protective clause available. Our guide to mortgages in Spain for non-residents covers what banks actually approve.
- A completion date with a real buffer. A file-ready non-resident mortgage takes 6 to 10 weeks from application to notary, including a mandatory 10-day reflection period on the bank’s binding offer (14 days in Catalonia). An arras with a 30-day deadline and no approved financing is a forfeited deposit with a signature line. With a mortgage, ask for 6 to 10 weeks, file the application as soon as your offer is accepted, and tie the date to the financing condition.
- Who pays which costs. Spanish law has a default allocation (the seller pays the plusvalía municipal and, by law, most of the notary’s deed fee, though contracts usually pass the notary to the buyer; the buyer pays registration and the purchase taxes we break down in our property-tax guide), but contracts often shift costs to the buyer with a single sentence such as “all costs borne by the purchaser.” Read for it, strike it or price it.
- The IBI split for the current year. The legal taxpayer for the annual property tax is whoever owns the property on 1 January, but the Supreme Court (ruling of 15 June 2016) allows the seller to pass the buyer a pro-rata share from the handover date unless the contract says otherwise. Write the split you agreed, whichever it is.
- An inventory annex for furnished sales. “Sold furnished” is not a specification. List the items, ideally with photos, signed as an annex. Furniture disputes are small money and outsized friction at the notary.
Due diligence comes before the deposit, not after
The arras deposit is the moment your money goes at risk, so every legal check belongs before it, not in the weeks after. Before the arras deposit moves, your legal counsel should have pulled the nota simple from the Land Registry (ownership, mortgages, embargoes), confirmed there are no outstanding community-of-owners debts or unpaid IBI travelling with the property, checked the occupancy licence and that the built reality matches what is registered, and verified the seller is who the registry says. That work takes days, not weeks, and it is the reason the same-week signature push deserves a polite no. A property that survives due diligence is still there in ten days; a deposit paid on one that would not have survived it is usually gone. The full sequence from offer to keys is on our buying-process page.
Where foreign buyers lose their deposit
The failure patterns repeat:
- Signing the seller’s draft in the same week as the offer. The document arrives with the momentum of the deal behind it and a “another buyer is waiting” soundtrack. It is drafted for the seller. Days of review cost nothing against a five-figure deposit.
- No financing condition. The mortgage is declined at week 6, the completion date arrives, and the deposit is forfeited even though the buyer did everything right.
- A 30-day completion with no approved mortgage. Thirty days is shorter than the Spanish mortgage process itself. This is the specific trap our mortgage guide warns about, and it is the most expensive line item on this list.
- Assuming any arras means a walk-away right. Under the confirmatorias default, backing out can mean a lawsuit for completion, not a lost deposit. The exit price exists only if the contract created it.
Arras contract in Spain: quick answers
Is the arras deposit always 10%?
No, it is convention rather than law. Ten percent is standard on resales; anything from 5% to 15% appears in practice, and any reservation fee already paid usually counts toward it. The amount is negotiable, and under arras penitenciales it also sets the walk-away price for both sides.
Can I get my deposit back if my mortgage is refused?
Only if the contract says so. A financing condition (condición suspensiva de financiación) dissolves the contract and returns the deposit if the bank declines. Without it, withdrawing under arras penitenciales forfeits the deposit, however good your reason. Negotiate the clause before signing, not after the refusal.
What happens if the seller pulls out of an arras contract?
Under arras penitenciales, the seller must return double the deposit you paid, and that closes the matter. Under arras confirmatorias, which is the default when the contract is unclear, you can instead sue to force the sale through or claim your actual damages in court.
Is an arras contract legally binding without a notary?
Yes. It is a private contract and binds both parties from signature; the notary only enters later, at the public deed. That is precisely why the arras deserves legal review before signing: by the time you reach the notary, every important term was already fixed.
If you want it handled
You can negotiate an arras yourself with good independent legal counsel, and the checklist above is most of the brief you would give them. What Zenith Concierge adds is sequence and leverage: due diligence completes before the arras, so your deposit only moves on a property your legal counsel has already cleared; the contract type, financing condition, and completion buffer are negotiated around your real mortgage timeline, not the seller’s preferred one. Getting that order right is most of what a buyer’s agent in Spain is for. We represent only buyers — no seller relationships — and if you want us to search, we cover the whole market, off-market listings included, and you follow every step live in your client portal. Already found the property? We start at your offer, and your lawyer runs due diligence before you sign arras, coordinated by us.
Book a Strategy Call — 30 minutes. We’ll walk you through the clauses to raise with your legal counsel before the arras deposit moves.