The arras contract in Spain: how the 10% deposit works (and the clause that decides who keeps the money)

You've found the apartment. Price agreed. Handshake done. The agent emails a two-page Spanish PDF called contrato de arras and asks for a 10% transfer "by Friday so we can take it off the market."

Stop. That document is the single most binding step in a Spanish property purchase before the notary. Sign the wrong version of it and walking away costs you 10% of the price. Sign the right version and the seller walking away costs them 20%.

This guide explains exactly how arras contracts work, the three flavours of arras Spanish law recognises, and the clauses every foreign buyer should negotiate before wiring a cent.

What an arras contract actually is

Spanish property purchases happen in two acts: the private contract and the public deed (escritura) signed in front of a notary. The arras contract is the most common form of private contract — a deposit agreement that locks both parties in between offer and notary.

Once you've signed it:

• The seller can't accept a higher offer and bump you off
• You can't back out without losing your deposit
• The price, completion date, and what's included are all fixed
• You typically have one to three months to complete at the notary

The deposit itself is usually 10% of the agreed price, paid by bank transfer to the seller (or, ideally, into a lawyer's escrow account). It is not held by the agent.

Crucially, the document you sign is governed by Article 1454 of the Spanish Civil Code — and what that article actually says depends entirely on which of the three types of arras the contract specifies.

The three types of arras — and why this is the only thing that really matters

Spanish law recognises three distinct types of pre-purchase deposit. They look almost identical in the contract. They behave completely differently when something goes wrong.

Type	If buyer walks away	If seller walks away	Default?
Penitenciales (Art. 1454)	Loses the deposit	Returns deposit × 2	Most common
Confirmatorias	Sale is enforceable in court	Sale is enforceable in court	Sometimes
Penales	Loses deposit, sale still enforceable	Pays penalty, sale still enforceable	Rare

1. Arras penitenciales — "buy-out clause" arras

This is what most foreign buyers think they're signing, and usually are. Either party can walk away:

• You walk: the seller keeps your 10%
• Seller walks: they pay you back double what you put down (i.e. you get your 10% back plus another 10% on top)

That's the deal. No lawsuit, no forced sale — just money changes hands and everyone walks. This is the version you almost always want as a foreign buyer, because if your mortgage gets declined or your circumstances change, your maximum exposure is the deposit you already paid.

For arras to be penitenciales, the contract must explicitly say so and reference Article 1454. If the document just says "arras" or "señal" without specifying, Spanish courts have historically defaulted to the next type.

2. Arras confirmatorias — the trap

If the contract simply uses the word "arras" without specifying penitenciales, courts may interpret it as confirmatorias. This means the deposit is just a down payment proving the sale is real — and neither party can walk away.

If you change your mind, the seller can sue you to force completion — meaning you'd have to pay the remaining 90% and take the property, or face damages on top of losing the deposit. The same applies in reverse: the seller can't back out either.

For most foreign buyers, this is the worst-case scenario. Always check the contract uses the exact phrase "arras penitenciales" or explicitly invokes Article 1454 of the Código Civil.

3. Arras penales — penalty arras

The hybrid. The deposit acts as liquidated damages, but the sale is still legally enforceable. If you walk, the seller can keep the deposit and sue you for performance. Rare in practice; if you see this, walk to a different lawyer.

The clauses every buyer must negotiate

The arras type is the headline clause. But the rest of the document carries almost as much weight. Here's what to push for:

Suspensive conditions (condiciones suspensivas)

These are the "get out of jail free" cards. If they're properly drafted, you can recover your deposit if a specific event doesn't happen. The three most important:

1. Mortgage approval — "If buyer's mortgage application is denied by [date], deposit is fully refunded." Without this clause, a mortgage rejection still costs you 10%. (See our non-resident mortgage guide for typical timelines.)
2. Clean title / no charges — the property must transfer free of mortgages, embargoes, IBI debt, or community-fee arrears.
3. Urbanistic situation — for rural or semi-rural properties especially, the contract should be void if the property turns out to be unregistered, partially illegal, or subject to a pending demolition order.

Completion date

Usually 30 to 90 days from signing. Push for the longer end if you're still arranging your mortgage, sourcing funds abroad, or getting your NIE. Make sure the date is a specific calendar day, not "within 60 days" — the latter creates ambiguity.

What's included

Spanish law assumes fixtures (kitchen, bathrooms, built-in wardrobes) transfer with the property. Furniture and white goods do not. If the seller agreed to leave the sofa, fridge, washing machine, or air-con units, list every item by name in the contract. "Furnished" is not a legal term.

Forfeit if seller has a hidden problem

If the seller is unable to complete because of an issue they should have disclosed (an undisclosed sibling co-owner, an ongoing inheritance dispute, a pending embargo), the contract should impose the penitenciales doubling automatically — not require you to litigate.

Currency clause (foreign buyers)

If you're funding from abroad, an FX swing in the gap between arras and notary can move the price by thousands. A simple clause noting the agreed price is in euros and FX risk sits with the buyer is standard — but if you're using a currency specialist, lock the rate the day you sign.

Who holds the money?

This is where foreign buyers most often get burned.

The 10% is usually wired directly to the seller. Once it's in their account, recovering it — even when you're legally entitled — depends on the seller's good faith. If the seller is a developer who goes bankrupt, or a private individual who simply refuses to refund, you're looking at a Spanish court case to enforce.

Better options:

1. Lawyer's escrow account — your lawyer holds the funds in a cuenta de provisión de fondos and only releases on completion or refund event. This is the gold standard.
2. Notary deposit — some notaries accept deposits into their client account, although this is less common for arras (more common for the final payment).
3. Bank guarantee (aval bancario) — the seller's bank guarantees the refund. Common for off-plan / new builds; mandatory by law for off-plan deposits under Law 38/1999.

If the seller insists on direct transfer, that's a yellow flag — not a deal-breaker, but a reason to triple-check the title (nota simple) and ensure your lawyer has reviewed everything.

The full timeline, in days

A typical Spanish purchase, from accepted offer to handover:

• Day 0 — verbal offer accepted, agent drafts a hoja de reserva (reservation form) with a small holding deposit (€3,000–€6,000) and 7–14 days to sign arras.
• Days 1–10 — your lawyer pulls the nota simple from the property registry, checks for charges, debts, and that the seller actually has authority to sell.
• Days 10–14 — arras contract signed, 10% paid (less the reservation deposit, which counts toward it).
• Days 14–60 — mortgage finalisation, FX, NIE if not yet obtained, surveyor visits if you've commissioned one, utilities and community fee checks.
• Day 60–90 — notary appointment. You sign the escritura, pay the remaining 90%, get the keys, and the notary registers the transfer with the Land Registry.

If anything in days 14–60 surfaces a serious problem and you've drafted suspensive conditions properly, you can pull out and recover your deposit. If you haven't, you can't.

How arras differs from other "deposit" documents

Three documents get confused here:

Document	Binding?	Typical amount	Refundable?
Hoja de reserva	Weakly — for a few days, until arras	€3,000–€6,000	Usually yes if arras isn't signed
Contrato de arras	Strongly — entire 10% at risk	10% of price	Only via penitenciales clause or suspensive condition
Contrato de opción de compra	Strongly — buyer has time-bounded right	5–10% (often forfeit)	Buyer can choose not to exercise; deposit usually lost

The option contract (opción de compra) is sometimes used as an alternative to arras. It gives the buyer an exclusive right to buy at a fixed price within a window (often 60–180 days). It's favoured for purchases requiring renovation permits, planning checks, or other longer due diligence — but the deposit is usually non-refundable if you don't exercise the option.

Pre-arras checklist

Before you sign and wire the 10%, you should have:

• NIE — required for the notary, but get it before arras to avoid timing pressure
• Spanish lawyer — independent of the seller and the agent, please
• Nota simple — pulled from the Registro de la Propiedad within the last 30 days, reviewed by your lawyer
• IBI receipt — proves the seller is current on the annual property tax
• Community fee certificate — for flats, proves no arrears
• Energy certificate — legally required at sale
• Mortgage AIP (if financing) — agreement in principle from your Spanish bank, plus the suspensive condition in the contract
• Funds confirmed — euros, in a Spanish account (or wire path arranged)
• Contract reviewed sentence-by-sentence — "arras penitenciales", suspensive conditions, completion date, what's included, FX clause

If your Spanish is shaky, the contract must be reviewed by a bilingual lawyer. Translation apps will not catch the difference between penitenciales and confirmatorias.

Common mistakes

The same mistakes show up over and over with foreign buyers:

1. Signing without a lawyer because the agent says "everyone uses this template." The template is rarely neutral.
2. Wiring the deposit to the agent — not the seller, not a lawyer escrow. Recovering money from agencies that lose their licence is painful.
3. No mortgage suspensive condition — and then the bank declines after 30 days of due diligence.
4. Buying on a tourist visit — three days isn't enough to do a nota simple, get an AIP, and read a contract carefully. Slow it down or use a reservation contract with a refundable deposit while you do the homework remotely.
5. Not reading the "included items" list — and arriving on completion day to find the kitchen was uninstalled.

Where Buvivo fits in

Buvivo is a reverse property search marketplace — you post what you're looking for, and matching agents and owners come to you with properties. We don't draft your arras contract. We do, however, sit upstream of the moment you're asked to sign one: the better the match between your real criteria and the property in front of you, the less pressure you feel to sign quickly "before someone else takes it."

Most arras-contract regrets we hear about start with the wrong property, not the wrong contract. Get the property right first.

Getting started

Buyers: post a request in 3 minutes and let agents bring matching properties to you — so when you do sign an arras contract, it's for the right place at the right price.

Related guides: taxes you'll owe · non-resident mortgages · getting your NIE · currency for foreign buyers · the foreigner's overview.