Before you complete on a Spanish property, you’ll sign an arras contract and hand over a deposit. Here’s what it is, what it means, and why it protects you — up to a point.
If you’re buying property in Spain, at some point between agreeing a price and completing at the notary you’ll be asked to sign an arras contract and pay a deposit. For UK buyers this feels familiar — it’s not unlike exchanging contracts — but the mechanics are different and the protections work in both directions.
Understanding what you’re signing matters. I’ve seen how it works when it’s done properly, and I’ve walked away from situations where it wasn’t.
What is an Arras Contract?
An arras contract (contrato de arras) is a private preliminary agreement between buyer and seller that commits both parties to the transaction. It’s signed before the final escritura at the notary, usually once the price has been agreed and basic due diligence has been completed.
It is not the same as the final title deed. It’s a binding commitment to complete — with financial penalties on both sides if either party pulls out.
How the Deposit Works
The buyer pays a deposit at the point of signing — typically 10% of the purchase price, though this is negotiable. This deposit is held as security for the transaction.
The protection is reciprocal:
- If the buyer pulls out, they lose the deposit entirely
- If the seller pulls out, they must return double the deposit to the buyer
This double-deposit penalty on the seller is the key protection for UK buyers buying remotely. It means the seller has a significant financial incentive to complete. On a €85,000 property with a 10% deposit, a seller who pulls out owes you €17,000. That’s a meaningful deterrent.
The Arras Penitenciales vs Other Types
There are technically three types of arras contract under Spanish law, but in practice the one used in almost all residential purchases is the arras penitenciales — the version with the double-deposit penalty described above. If your contract doesn’t specify the type, Spanish courts generally default to this interpretation, but it’s worth confirming with your gestor.
Who Holds the Deposit — And Why It Matters
This is where things can go wrong. In a properly structured transaction, the deposit should be paid to the seller directly — or held in a properly documented escrow arrangement — with the arras contract clearly stating the terms.
What you should never do is pay a deposit directly to the selling agent before an arras contract is signed and before any due diligence has been done. I encountered exactly this situation during my property search — an agent in Alicante wanted the deposit sent to them immediately upon agreeing a price, before any searches or checks. If something had come to light afterwards, my money would have been gone with no clear recourse.
I walked away.
What Should Be in the Arras Contract
A properly drafted arras contract should include:
- Full details of both buyer and seller, including NIE numbers
- Full description of the property including cadastral reference
- The agreed purchase price
- The deposit amount and who holds it
- The deadline for completion (fecha máxima de escrituración)
- The penalty terms — double return if seller withdraws, forfeiture if buyer withdraws
- Any conditions — subject to survey, subject to financing etc
The Cesión de Arras — Transferring the Contract
In my purchase, the arras contract was originally signed by the sourcing company on my behalf before I was formally involved. When my company (Solsettler SL) took over the purchase, a separate agreement — a cesión de contrato de arras — transferred the contract and the deposit obligation from them to us. This cost €363 including IVA.
This is a specific situation that arises when a sourcing agent or intermediary puts down a reservation deposit before the end buyer is formally identified. It’s legitimate and documented, but it’s another reason to have a gestor reviewing everything — it’s not something most UK buyers would know to look for or handle correctly.
What Happens After the Arras Contract
Once the arras is signed and the deposit paid, both parties are committed. The period between arras and completion is used to:
- Complete remaining due diligence
- Arrange the transfer of funds
- Prepare the escritura with the notary
- Handle any outstanding issues — title corrections, charges to be cancelled
In my purchase, the arras was signed in May 2025 with a completion deadline of 25 July 2025. We completed on 14 July 2025.
The Bottom Line
The arras contract is one of the strongest protections available to a buyer in the Spanish system — but only if it’s used correctly. Signed before due diligence, paid to the wrong party, or drafted without proper terms, it can leave you exposed rather than protected.
Get your gestor to review any arras contract before you sign. It’s exactly what they’re there for.
Thinking about who should be handling your due diligence? What is a Gestor in Spain? explains the professional you need in your corner before you sign anything.