The Arras Contract in Spain: Why Buyers Nearly Lose Their Deposit

The arras contract is the moment in a Spanish property purchase where things get serious. I remember the feeling when ours arrived. This is where you formally commit. Before the arras, you can still walk away without losing too much. After the arras, walking away costs you the deposit. On a €300,000 property, that is €30,000. That is not small print. Here is exactly how it works.

What the Arras Contract Actually Is

The arras contract (contrato de arras penitenciales) is a private purchase agreement between buyer and seller, signed after due diligence is complete and both parties are ready to commit to the transaction.

At signing, the buyer pays the deposit, usually 10 per cent of the agreed purchase price (minus any reservation fee already paid). This is the moment the buyer's commitment becomes financially real.

The bilateral nature of arras is one of the features foreign buyers find most surprising. It doesn't just bind the buyer. If the seller withdraws after signing, changes their mind, accepts a higher offer elsewhere, refuses to complete, they owe the buyer double the deposit. This is genuine legal protection for buyers, not just sellers.

But the protection only works if the arras is drafted correctly.

The Arras Trap: Missing Condition Precedents

The most common way buyers nearly lose deposits is this: they expect their mortgage, or their survey, or some other external factor to create an automatic exit if things don't work out. They sign the arras without verifying that this is actually written into the contract.

If your mortgage is refused and the arras contract does not include a specific mortgage condition allowing you to exit without penalty, you are still committed to completing. If you can't complete without the mortgage, you lose the deposit.

The same logic applies to any condition you're assuming creates an exit. If it's not in the contract, it doesn't exist legally. This applies to buying property in Marbella, Estepona, Benahavís, or anywhere on the Costa del Sol.

What Your Lawyer Should Do Before You Sign

Before you sign the arras:

Your lawyer reads the contract in full. They check for any terms that are unfavourable or unusual. They add any conditions you need, mortgage subject-to clause, satisfactory survey, clear title, as explicit contract conditions. They confirm the timeline to completion is realistic given your circumstances.

Then, and only then, you sign.

The arras is one of the documents that appears straightforward and almost always isn't. Sellers and their agents draft the first version. The first version will not contain conditions that benefit you.

The Completion Timeline

The arras sets the completion date. If you miss that date without an agreed extension, you are in breach of contract. This is another common trap: buyers underestimate how long it takes to get completion funds transferred and confirmed, or their bank takes longer than expected to process the transfer.

Your lawyer sets a realistic completion date in the contract. If you are using a Spanish mortgage, factor in the lender's processing time. If you are transferring funds internationally, allow at least two weeks for the transfer to clear and the bank cheque to be arranged.

PlanMarbella.com walks you through the arras stage, what to check, what to ask your lawyer, and how to protect yourself. Free at planmarbella.com.