The contrato de arras is the binding private contract that locks in a Spanish property purchase before the final notary signing — and understanding its terms matters, because it determines what happens to your deposit if the deal falls through.
What It Is
Once due diligence is underway and both parties are serious, buyer and seller sign a private purchase contract (contrato de arras), typically with a deposit of around 10% of the purchase price. This sits between the initial reservation agreement and the final notary deed — it’s legally binding, but not yet the formal transfer of ownership.
The Three Types
| Type | If buyer withdraws | If seller withdraws |
|---|---|---|
| Arras penitenciales (most common) | Loses the deposit | Must return double the deposit |
| Arras confirmatorias | Can be legally compelled to complete, or sued for damages | Can be legally compelled to complete, or sued for damages |
| Arras penales | Deposit forfeited as a fixed penalty, but contract can still be enforced | Similar penalty structure, varies by specific contract terms |
Arras penitenciales is by far the most common structure used in Spanish residential property transactions, and the “lose your deposit / seller pays double” mechanism gives both sides a real, mutual incentive to complete the deal.
What Should Be Included
- The full agreed purchase price and deposit amount
- A clear completion deadline
- A financing contingency clause, if you’re using a mortgage — protecting your deposit if financing genuinely falls through despite good-faith efforts
- Confirmation the property is free of charges, debts, and tenants (or clear terms if it isn’t)
- Any specific conditions related to due diligence findings
Why a Financing Contingency Clause Matters So Much
Without one, if your mortgage application is rejected after signing the arras contract, you could lose your entire 10% deposit through no real fault of your own, since a standard arras penitenciales structure doesn’t automatically distinguish between “changed my mind” and “bank said no.” A well-drafted clause protects you specifically for genuine financing failures, which is why this isn’t a contract to sign without a lawyer’s review.
Frequently Asked Questions
Is the arras contract the same as the final purchase deed?
No, it’s a private binding contract that precedes the escritura pública (public deed) signed at the notary, which is the step that formally transfers ownership.
How long between signing the arras and completion?
Commonly 4–8 weeks, though this is negotiable and depends on factors like mortgage approval timelines if financing is involved.
Can the arras contract be signed remotely?
Yes, through power of attorney or in some cases digitally, depending on how your lawyer structures the process for an overseas buyer.