Reservation & arras contracts: how you lock in a Spanish property

Two documents, weeks apart, each with its own deposit — that’s the shape of committing to a Spanish property, and it trips up almost every UK buyer at first because English conveyancing has nothing quite like it. Get the difference between them right, and get one specific word into the second contract, and the process protects you well. Get it wrong, and the contract that’s supposed to protect you can work against you instead.

This is general information, not legal advice — see the note at the end before signing or paying anything.

Reserva vs arras: two different documents, two different jobs

The reservation contract (contrato de reserva or depósito de reserva) comes first. It takes the property off the market for an agreed window — usually 15–30 days — while your lawyer runs due diligence. In exchange you pay a reservation deposit, typically 1–5% of the price, commonly €3,000–€10,000 depending on property value and region. This deposit is usually non-refundable once paid, except where you withdraw for a reason the contract itself allows for — an adverse finding in due diligence, most commonly — so the exact wording matters more than the size of the sum.

The arras contract (contrato de arras) comes second, once due diligence is clean, and is the document that actually binds both sides. The customary deposit is 10% of the agreed price, and it fixes a completion date, typically 60–90 days out for a resale.

Where should the money sit? For both deposits, insist it goes into your lawyer’s client account (or, on some purchases, is held by the notary) rather than being paid directly to the seller or the estate agent. A deposit held by a neutral third party pending completion or a qualifying refund event is materially easier to recover if something goes wrong; a deposit paid straight to a seller who then defaults puts you in a much weaker position if you ever need to enforce the return.

The three types of arras — and why the contract must say “penitenciales”

Spanish law actually recognises three distinct kinds of arras, and which one applies changes what happens on breach substantially:

• Arras penitenciales — the type described above and the one every buyer should insist on. Either side can walk away by accepting the agreed penalty: the buyer forfeits the deposit, the seller returns it doubled. This is the only type expressly regulated in the Civil Code, at Article 1454, and it’s overwhelmingly the type used in Spanish home sales for good reason.
• Arras confirmatorias — simply an advance payment on account of the price. Neither side can walk away unilaterally; if one side breaches, the other can demand either full performance of the contract or damages, which is a materially worse position for a buyer who’s simply changed their mind.
• Arras penales — function as a pre-agreed penalty clause guaranteeing performance, without granting a right to withdraw. The non-breaching party can keep the deposit as compensation and still separately demand the contract be completed.

The critical point: if the contract doesn’t specify which type applies, Spanish courts have consistently interpreted silence as arras confirmatorias — the type that does not give a buyer or seller a clean, unconditional walk-away right. In practice, this means a badly or vaguely drafted arras contract can leave a buyer who simply gets cold feet exposed to a claim for full performance, not just the loss of a deposit. The fix is simple and should never be left to a checklist: the word penitenciales needs to appear in the contract itself, not be assumed.

Article 1454 mechanics: what actually happens on default

With arras penitenciales correctly specified, Article 1454 of the Civil Code sets the entire remedy: “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” — if the buyer withdraws, they lose the deposit; if the seller withdraws, they return it doubled. That’s the full extent of the consequence in either direction — a walk-away right, priced.

That symmetry is the whole point, and it’s a genuine structural advantage over English chains: because the penalty for a seller pulling out is severe and automatic, gazumping essentially doesn’t happen once arras is signed. There’s no need for a race to exchange, because exchange (in the English sense) has already happened.

Conditions worth negotiating into the arras contract

Two clauses are worth pushing for before you sign, both standard requests an independent lawyer will know how to draft correctly:

A mortgage / subject-to-finance clause (condición suspensiva de financiación). If you’re borrowing, this clause lets you recover your deposit in full, without penalty, if your mortgage application is declined within an agreed window — provided you can show you made a genuine, diligent effort to obtain finance (applying to a single bank and being declined is not generally treated as sufficient). Getting the drafting right matters for a second reason too: the clause needs to be written as a suspensive condition (the contract doesn’t take legal effect until finance is confirmed) rather than a resolutory one (the contract takes effect immediately and is then unwound if finance falls through) — the difference affects whether transfer tax becomes payable in the interim.

A clean-title clause, tying your obligation to complete to your lawyer’s due diligence coming back clear — no undischarged mortgages or judicial embargoes on the nota simple, correct planning licences, and no outstanding community or utility debts. This is the negotiating hook that connects the arras contract back to the due diligence your lawyer runs (covered in full in our lawyer guide).

New-build variants: stage payments and the Ley 20/2015 guarantee

Off-plan purchases don’t use a single arras payment. Instead, buyers typically pay in stages tied to construction milestones — commonly a private purchase contract deposit of somewhere in the region of 20–30% shortly after reservation, further instalments at agreed points such as structural completion, and the balance, often 60–70%, on handover — though the exact split varies significantly by developer and is worth confirming precisely before signing anything.

The protection that matters more than the schedule itself: under Ley 20/2015 — which repealed the earlier Ley 57/1968 outright (effective 1 January 2016) and relocated the deposit-guarantee regime into the LOE (Ley 38/1999, Disposición Adicional Primera) — every payment made to a developer before completion — from the very first deposit — must be covered by a bank guarantee (aval bancario) or surety insurance (seguro de caución) naming you individually. If the development fails or is delayed past the contracted date, you claim back everything paid, plus statutory interest, from the guarantor, not from the developer’s insolvency estate. Confirm this guarantee is genuinely in place and named to you specifically before paying anything beyond the initial reservation deposit — developments where buyers weren’t properly covered are the most common horror story in Spanish off-plan purchases.

Frequently asked questions

What’s the difference between a reservation deposit and an arras deposit? The reservation deposit (1–5% of price, often €3,000–€10,000) holds the property during due diligence and usually isn’t refundable outside contract-specified grounds. The arras deposit (customarily 10%) is the real binding commitment, forfeited if you pull out, returned doubled if the seller does.

What happens if I pull out after signing arras? With arras penitenciales correctly specified, you lose the deposit and that’s the end of it. Without that wording, courts may treat the arras as confirmatorias, which can expose you to a claim beyond the deposit.

What happens if the seller pulls out? They must return your deposit doubled under Article 1454 — the mechanism that makes Spanish gazumping rare once arras is signed.

Is my deposit protected on a new-build purchase? Only if the developer has arranged a bank guarantee or surety insurance naming you individually, as required by Ley 20/2015 — confirm it exists before paying beyond the reservation stage.

Not legal advice

This article is for general information only and does not constitute legal, financial or tax advice. Deposit sizes, contract wording, and stage-payment structures vary by property, developer and region, and consequences depend entirely on how a contract is actually drafted. Always have any reservation or arras contract reviewed by an independent Spanish lawyer before signing or paying anything. Facts in this piece current as of 7 July 2026.