Contrato de Arras
A contrato de arras is a preliminary purchase agreement used in Spanish property transactions. It is signed after the buyer and seller agree on the price but before the final escritura at the notary. The buyer pays a deposit, typically 10% of the purchase price, to secure the property and take it off the market. The contract binds both parties and defines the consequences if either side withdraws.
The three types
Spanish law recognises three types of arras, and the type you sign determines what happens if the deal falls through.
Arras penitenciales (the most common): if the buyer withdraws, they lose the deposit. If the seller withdraws, they must return double the deposit to the buyer. This is the standard in most residential purchases.
Arras confirmatorias: the deposit confirms the agreement. If either party withdraws, the other can demand full performance or sue for damages. There is no simple walk away penalty.
Arras penales: the deposit serves as a pre agreed penalty. If either party withdraws, the penalty is the deposit amount, but unlike penitenciales, the seller only returns the deposit (not double).
If the contract does not specify the type, Spanish courts typically interpret it as arras confirmatorias, which gives the aggrieved party the right to demand full performance. This is why it is critical to ensure the contract explicitly states arras penitenciales if that is the intended protection.
What the contract should contain
A well drafted contrato de arras includes: the full identity of buyer and seller, a complete property description with referencia catastral, the agreed purchase price, the deposit amount and how it was paid, the deadline for signing the escritura at the notary, a statement on the state of charges (confirming the nota simple shows no undisclosed debts), and an explicit statement of the type of arras.
How long between arras and escritura
The typical gap is 30 to 60 days. This gives the buyer time to arrange financing, and the seller time to prepare documentation. The deadline is specified in the contract and is binding. If the buyer is not ready by the deadline and the contract is penitencial, the seller can walk away and keep the deposit.
