Deposits and Contracts in Marbella Property: What You Sign and When

One of the areas where buyers from the UK, Ireland, and beyond most frequently encounter confusion when buying property in Marbella is the contract sequence. Spain has a layered approach to property contracts, and what you sign at each stage has specific legal consequences that differ from what you may be used to at home.

Understanding this before you start viewing properties is genuinely valuable. It means you will not be surprised by what an agent asks you to sign, you will know when to insist on having your lawyer review something before you do, and you will be protected against the most common mistakes.

The reservation agreement (contrato de reserva)

The first document you may be asked to sign is a reservation agreement. This takes the property off the market for a specified period (typically 7 to 21 days) while due diligence is done and the private purchase contract is prepared. It is accompanied by a reservation deposit, typically €3,000 to €10,000 depending on the property price.

Reservation agreements are generally refundable if the purchase does not proceed, but this depends on the specific wording. Before signing anything, even a simple reservation form, have your lawyer review it. The commitment may be lighter than a private purchase contract, but it is still a legal document with real implications.

The private purchase contract (contrato de arras)

This is the binding private agreement between buyer and seller. The standard form in Spain is the arras penitenciales contract, governed by Article 1454 of the Spanish Civil Code. Under this structure: the buyer pays a deposit of 10% (sometimes up to 20%) of the agreed purchase price. If the buyer withdraws without legal justification, they forfeit the deposit. If the seller withdraws, they must pay the buyer double the deposit received.

This creates a genuine mutual commitment and a financial deterrent against either party walking away. The private purchase contract also sets the agreed price, the completion date, and the conditions of the sale (what is included in the price, who is responsible for what costs, any conditions that must be met before completion).

This contract must be reviewed by your lawyer before you sign. Not after. Before. The consequences of signing something you did not understand are expensive.

What should be in the private purchase contract

Beyond price and date: a clear description of the property as registered, confirmation that the seller is the legal owner and has the right to sell, confirmation that the property is free of mortgages and charges (or that any existing mortgage will be cancelled at completion), a list of any furniture or fixtures included in the sale, the agreed allocation of purchase costs (typically the buyer pays purchase tax and notary/registry, the seller pays plusvalia tax), and any specific conditions of the sale such as the seller completing certain repairs before completion.

Completion at the notary (firma)

The final stage is signing the public deed of sale (escritura publica de compraventa) at the notary. Both buyer and seller (or their representatives via power of attorney) must be present. The full purchase price is paid at this point via banker's draft or bank transfer. The notary verifies identities, reads the deed, and witnesses the signatures. The property is then legally transferred.

Your lawyer should attend the notary appointment or, if they are not the buyer's representative, you should review the deed carefully before signing. At this point, the full balance of the purchase price changes hands. Any errors or misunderstandings become very expensive to resolve after this point.

After completion

The escritura needs to be registered in the land registry (registro de propiedad) in your name. This is not automatic; it requires submission with payment of the purchase taxes. Your lawyer handles this. Until registration is complete, you own the property but it is not yet reflected in the public record. The process typically takes four to eight weeks.