Deposits, arras and contracts

It is for anyone considering, planning or carrying out a move to Spain who is close to putting down a deposit. You will know what each deposit commits you to and how to protect it.

Start with "Arras contracts explained and which one you signed". The type of arras decides what you lose, or what the seller owes you, if the deal collapses, so every other page in this topic builds on it.

Legal checks on the property, the notary deed day, mortgage steps and scam prevention are covered in other topics.

Key rules

• Withdrawal cost: With penitential arras, a buyer who withdraws loses the arras, and a seller who withdraws returns double the arras.
• Cash limit: Cash payments of 1,000 euros or more are prohibited when one party is a business or professional, and the limit is 10,000 euros between private individuals.
• Hidden defects: You have six months from delivery to claim for hidden defects in a resale property.
• Mortgage clause: A mortgage condition is not included automatically, so you must write it into the contract or you risk losing the deposit if the loan is refused.
• Default type: If the contract does not say which kind of arras it is, it is treated as penitential.
• Buyer withdrawing: With penitential arras, a buyer who withdraws loses the arras and nothing more.

Deposits, arras and contracts: the whole process, step by step

• Sign a reservation document, if you pay a reservation deposit. See: Reservation deposit (senal de reserva) before the arras contract: First step. The reservation usually runs 7 to 15 days, sometimes up to 30 days, and the seller only has to take the property off the market if the document says so

• Agree the arras type and write in any mortgage condition. See: Arras contracts explained and which one you signed, and Clauses that protect your deposit if the deal falls through: Before you sign the arras or sale contract

• Sign the private purchase contract with all essential terms. See: What belongs in the private purchase contract (contrato de compraventa): At the end of the reservation period

• Decide whether to withdraw. See: What happens if you or the seller pull out: Before either side has started to perform the contract and before the deed is signed, or within any term the contract sets

• Sign the deed at the notary: Usually 30 to 90 days after the contract, longer if you need a mortgage

• Check the property after delivery and claim for hidden defects if needed. See: Hidden defects, double sales and fraud: your remedies: Within six months of delivery

Documents you may need

Identity and residence

• Your ID and the seller's ID — What belongs in the private purchase contract (contrato de compraventa)

Payments and receipts

• The latest community-fees receipt and IBI receipt — What belongs in the private purchase contract (contrato de compraventa)

Other documents

• Energy performance certificate — Clauses that protect your deposit if the deal falls through, What belongs in the private purchase contract (contrato de compraventa)
• A written reservation document signed by you and the seller — Reservation deposit (senal de reserva) before the arras contract
• The withdrawal terms inside that document — Reservation deposit (senal de reserva) before the arras contract
• Property registry extract — Clauses that protect your deposit if the deal falls through
• Certificate showing no community of owners debt — Clauses that protect your deposit if the deal falls through
• Paid IBI — Clauses that protect your deposit if the deal falls through
• The property's registry data and cadastral reference — What belongs in the private purchase contract (contrato de compraventa)
• A community debt certificate from the seller — What belongs in the private purchase contract (contrato de compraventa)
• A written promise that the seller will not market or sell the property during — Reservation deposit (senal de reserva) before the arras contract

Each article lists the other documents it asks for, where you need them.

Deposits, arras and contracts: questions that cross several articles

Do I get my reservation deposit back if the deal fails?

It depends on the written terms of your reservation document, and you usually get it back if it was only a payment on account and the sale fails through no fault of yours. If the document gives it penitential effect, a buyer who withdraws loses it and a seller who withdraws returns double. Read Reservation deposit (senal de reserva) before the arras contract and What happens if you or the seller pull out.

Does a mortgage condition come automatically with my arras contract?

No, a mortgage condition is not included automatically, so you must write it into the contract or you risk losing the deposit if the loan is refused. Read Clauses that protect your deposit if the deal falls through, then Arras contracts explained and which one you signed to see how your arras type affects the loss.

What if my contract does not say which arras I signed?

If the contract does not say which arras you signed, they are treated as penitential. A buyer who withdraws then loses the arras, and a seller who withdraws returns double. Read Arras contracts explained and which one you signed and What happens if you or the seller pull out.

Does signing a reservation document take the property off the market?

Only if the document says so, because the seller is not obliged to stop marketing the property otherwise. Make sure it also states the deadline to sign the contract. See Reservation deposit (senal de reserva) before the arras contract and What belongs in the private purchase contract (contrato de compraventa).