The arras contract in Spain: reservation, deposit and what happens if you pull out

A private pre-contract that commits both buyer and seller to a property deal, with a financial penalty for either side that backs out.

What is an arras contract?

An arras contract is a private pre-contract signed between buyer and seller before the notarial public deed (escritura publica) in a Spanish property purchase. It commits both parties to the transaction and typically involves a deposit, most commonly 10% of the purchase price. The arras penitenciales, the only type expressly regulated in the Civil Code, create a withdrawal mechanism: either party may walk away, but the buyer forfeits the deposit or the seller returns it doubled. Article 1454 of the Civil Code states that “if earnest money or a deposit has been given in a sale contract, the contract may be rescinded, the buyer accepting the loss of the deposit, or the seller accepting its return in double.” This is the legal backbone of every reservation stage in a Spanish property purchase. The notarial guidance from the Consejo General del Notariado describes it as a legally binding private document that is common in practice but not obligatory.

How does an arras contract differ from a reservation contract?

A reservation contract and an arras contract sit at different stages of the buying process and carry different financial stakes. A reservation contract is typically a small good-faith payment, commonly between EUR 3,000 and 6,000 depending on the property value, that takes the property off the market for a short due-diligence window, often 7 to 14 days. The terms of refund depend on what the parties agree in that document, not on article 1454 of the Civil Code. The arras contract comes after due diligence, commits both parties to the full purchase, and carries the 10% penitential deposit. A buyer might sign a reservation contract to secure a property while their lawyer checks the land registry, then sign the arras contract once the due diligence clears and they are ready to commit. The cost of buying property on the Costa del Sol explains where the arras deposit sits in the full acquisition cost structure, which runs to 10 to 13% on top of the price.

What does article 1454 of the Civil Code actually say?

The full text of article 1454 of the Spanish Civil Code reads: “Si hubiesen mediado arras o señal en el contrato de compra y venta, podrá rescindirse el contrato allanándose el comprador a perderlas, o el vendedor a devolverlas duplicadas.” In plain terms: if earnest money or a deposit has been exchanged in a sale contract, either party may rescind the contract. The buyer who withdraws loses the deposit. The seller who withdraws must return the deposit doubled. This provision, part of the Código Civil approved by Royal Decree of 24 July 1889 and published in the Gaceta de Madrid, is the only type of arras expressly regulated in the Civil Code. The Supreme Court has consistently held that the penitential arras clause is exceptional and must be interpreted restrictively, meaning the contract must clearly invoke this withdrawal mechanism for article 1454 to apply.

What is the difference between arras penitenciales and arras confirmatorias?

Spanish law and jurisprudence recognise several types of arras, and the distinction matters for what happens if someone pulls out. Arras penitenciales, governed by article 1454, give both parties a right of withdrawal with a financial penalty: the buyer forfeits, the seller returns double. Arras confirmatorias, defined by doctrine and Supreme Court jurisprudence rather than an express statutory provision, function as a simple advance payment on the price. They confirm the contract but carry no withdrawal right. If the contract does not expressly state that the deposit is penitential and does not reference article 1454, courts may treat the payment as confirmatory, meaning the deposit is simply part of the price and does not trigger the forfeit-or-double mechanism. This is why the wording of the arras contract matters as much as the payment itself.

Type of arras	Legal basis	Withdrawal right	Buyer pulls out	Seller pulls out
Penitenciales	Civil Code art 1454	Yes, either party	Forfeits deposit	Returns deposit doubled
Confirmatorias	Doctrine and jurisprudence	No	Deposit is price advance	Deposit is price advance
Penales	Clause penal doctrine	No (penalty for breach)	Liable for damages	Liable for damages

How much is the arras deposit?

The most common arras deposit in Spanish residential transactions is 10% of the purchase price, though the parties may agree a different figure. On a EUR 500,000 property, that is EUR 50,000. On a EUR 1.5 million Marbella apartment, EUR 150,000. The amount is negotiated and stated in the private contract. There is no statutory minimum or maximum. The notarial guidance notes that for subsidised housing (VPO) there is a maximum sale price, which constrains the deposit. For a reservation contract signed earlier in the process, the good-faith payment is much smaller, typically EUR 3,000 to 6,000, and is sometimes structured as an initial reservation fee that later counts toward the 10% arras deposit if both parties proceed.

What happens if the buyer pulls out?

If the buyer withdraws from a contract with arras penitenciales, they lose the deposit. The Supreme Court confirmed this in STS 270/2025, where the buyer failed to formalise the purchase within the agreed timeframe and the court ruled that the amounts handed over as arras were forfeited. The buyer cannot recover the deposit by arguing that they simply changed their mind. The penitential clause is designed precisely to give both parties a priced exit: the buyer pays for the withdrawal with the deposit. This is why buyers should treat the arras signing as the point of real financial commitment, not the notarial deed. Before signing, the buyer’s lawyer should have completed the key due-diligence checks on land registry charges, community debts, and occupancy status.

Worked example: buyer withdrawal on a EUR 500,000 property

A buyer signs an arras contract for a EUR 500,000 apartment in Marbella and pays a 10% deposit of EUR 50,000. Two weeks before the notarial deed, the buyer finds a different property and decides to pull out. Under article 1454, the seller keeps the EUR 50,000 deposit. The buyer walks away with nothing returned. The contract is rescinded and the seller is free to relist the property.

What happens if the seller pulls out?

If the seller withdraws from arras penitenciales, they must return the deposit to the buyer in double. On the same EUR 500,000 property with a EUR 50,000 deposit, the seller must hand back EUR 100,000. This is the mirror penalty designed to discourage sellers from accepting a higher offer after signing the arras. The asymmetry, buyer forfeits versus seller returns double, exists because the seller holds the deposit during the pre-contract period and the doubled return compensates the buyer for the lost opportunity and the due-diligence costs already spent. Buyers who understand this mechanism can negotiate the arras with confidence that the seller is financially committed too.

Worked example: seller withdrawal on a EUR 500,000 property

A seller signs an arras contract for a EUR 500,000 apartment and receives a EUR 50,000 deposit. A week later, a second buyer offers EUR 530,000. The seller withdraws from the first deal. Under article 1454, the seller must return EUR 100,000 to the first buyer: the original EUR 50,000 deposit plus EUR 50,000 as the penalty. The first buyer recovers their deposit plus an equal amount as compensation.

What should the arras contract include?

The notarial guidance from the Consejo General del Notariado lists seven key checks before signing. These are the elements a buyer’s independent lawyer should verify:

1. Who signs for the seller: All owners must sign, or a holder of a valid notarial power of attorney must produce the authorised copy. If the property is marital or a family home, both spouses sign. In inheritance cases, the heirs must have their documentation in order, and the land registry’s public faith is suspended for two years after the deceased’s death.
2. Charges and encumbrances: A nota simple from the Land Registry should confirm whether mortgages or embargos exist.
3. Community fees: A certificate from the secretary of the community of owners, with the president’s approval (visto bueno), should confirm the seller is current on community dues.
4. Price and arras type: The contract should state the purchase price, the deposit amount, and expressly that the deposit is arras penitenciales under article 1454.
5. Costs allocation: Unless otherwise agreed, the seller pays the plusvalia municipal and the master deed; the buyer pays copies, registration, and taxes. In developer sales, it is illegal for the buyer to assume the seller’s costs.
6. Completion deadline: A clear date for the notarial deed. If the buyer misses it without cause, the arras penalty applies.
7. Notary choice: The buyer has the right to choose the notary, whether the seller is a private individual or a developer.

How does the arras fit into the full buying process?

The arras contract sits between the reservation stage and the notarial deed. A typical sequence for a Costa del Sol purchase is: the buyer finds a property, signs a reservation contract with a small good-faith payment to take it off the market, instructs a lawyer to run due diligence, signs the arras contract with the 10% deposit once due diligence clears, then signs the escritura publica before a notary and pays the balance. The off-plan buying mechanics guide covers the developer-specific variant, where stage payments and bank guarantees replace the simple arras structure. For buyers who need a Spanish tax number (NIE) before they can sign anything, that step comes first. And for non-residents selling later, the 3% retention on sale applies regardless of how the arras was structured at purchase.

What risks does a buyer face at the arras stage?

The main risk is signing arras before due diligence is complete. If the buyer pays the 10% deposit and then discovers an undisclosed charge on the property, the withdrawal mechanism of article 1454 still applies but the buyer forfeits the deposit unless they negotiate a different outcome or can prove the seller breached a contractual warranty. A second risk is signing an arras contract that does not expressly invoke article 1454. Without that express reference, courts may treat the deposit as confirmatory rather than penitential, changing the legal consequences. A third risk, particularly for non-resident buyers, is using a lawyer referred by the seller’s agent, where a conflict of interest may mean due-diligence checks are rushed or skipped to keep the deal moving.

Can the arras amount be negotiated?

Yes. The 10% figure is customary, not statutory. Parties may agree 5%, 20%, or a fixed EUR amount. In a buyer’s market, a seller may accept a lower deposit to keep a buyer interested. In a competitive situation, a seller may demand a higher deposit to test the buyer’s commitment. The key is that the amount, the withdrawal mechanism, and the reference to article 1454 are all stated clearly in the written contract. An oral arras agreement is legally fragile and practically unenforceable against a disputed deposit.

Sources and data

• Article 1454, Spanish Civil Code (Real Decreto de 24 de julio de 1889, BOE-A-1889-4763): the express legal basis for arras penitenciales. BOE consolidated text
• Consejo General del Notariado: notarial guidance on property purchases, the arras pre-contract, and the seven key checks before signing. Notariado: Viviendas e inmuebles
• Colegio de Registradores: guidance on verifying the seller’s title and charges via nota simple before signing arras. Registradores.org

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.