Note

Arras contract in Spain: confirmatory and penitential explained

§ 1What arras are

Arras are a sum paid by the buyer to the seller before the deed, under a contract in which both agree the sale. The word covers different legal effects, and the effect depends on what the paper says. The paper decides which type you have, and it is part of the wider chapter in how contracts before completion works.

§ 2Optional

The notary’s page says plainly that arras are optional. No law requires you to sign an arras contract. The deed before the notary is what transfers ownership. Some buyers and sellers use arras to fix the deal and show commitment, while the checks continue. If you do, the paper should say what the money is for.

§ 3Confirmatory arras

Confirmatory arras are the most common type according to the notary. They confirm the contract and count as part of the price. They do not, by themselves, give either side a right to walk away by losing or doubling the sum. If a party refuses to complete, the other can usually demand performance or compensation, according to the general rules of contract. Your lawyer should explain the consequences for the particular paper.

§ 4Penitential arras

Penitential arras give a right to withdraw, in exchange for a penalty. They apply only if the parties agree, and the contract should say so clearly. The buyer who withdraws loses the deposit, and the seller who withdraws returns double. This looks symmetrical but works differently in practice, because the buyer usually pays first and the seller can keep the money while the buyer is deciding. Treat the clause with care.

§ 5Reading the paper

Look for the words that say what kind of arras they are. If the paper says only “señal” or “arras” without more, ask your lawyer how it will be read. Look for conditions: finance, satisfactory checks, delivery of licences. Look for a deadline for the deed and the consequences if it is missed. And look for who holds the money. The general rule on deposits is in more on the deposit.

§ 6Negotiating the paper

Ask for the arras to be penitential only if you want the exit, and ask for a small sum if you do. Ask for conditions that protect you if the checks fail. Ask for the money to be held by someone neutral. A seller who refuses all conditions is telling you how the sale will go.

§ 7If you want to leave

If you wish to withdraw after signing, read the paper with your lawyer before you say anything to the seller. The options are explained in more on pulling out.

§ 8More on this topic

More on the reservation contract explains the short paper that takes a home off the market and more on the private purchase contract explains the contract signed before the deed.

Legal note. How the process works in general. It is not legal advice, and it never replaces an independent Spanish lawyer acting for you.