Before signing it, it is important to know what type of deposit is being agreed, what commitments the buyer and the seller are taking on, and what would happen if the sale were not finally completed.
What is a contrato de arras?
A contrato de arras is a private agreement between the buyer and the seller that sets out certain conditions of a future sale.
The buyer usually pays an amount of money as a deposit and on account of the price of the property. If the sale goes ahead, that amount is later deducted from the outstanding balance.
The document may set out aspects such as the sale price, the identification of the property, the deadline for signing the title deed and the consequences of a possible breach.
Although signing it is not mandatory, once accepted it binds the parties on the agreed terms. The Spanish Notaries’ Association (Notariado) points out that the private document is valid and that whoever signs it is legally bound to comply with its content.
Difference between a contrato de arras and a property reservation
Although both concepts are often used in the early stages of a sale, they are not necessarily the same thing.
A reservation is usually used to take a property off the market temporarily while the terms of the transaction are negotiated or prepared. How it works will depend on what the signed document states.
The contrato de arras, on the other hand, usually sets out the terms of the sale and the commitments of the buyer and the seller in more detail.
For this reason, you should not focus only on the name of the document. What matters is reviewing its content, the amounts paid and the consequences if the transaction does not finally go ahead.
What a contrato de arras for buying a property looks like
There is no single model that is valid for every transaction. The content must be adapted to the characteristics of the property and to the agreement reached between the buyer and the seller.
As a minimum, the parties and the property should be correctly identified and the main terms of the sale clearly defined.
The information usually included is:
- Details of the buyer and the seller.
- Identification and description of the property.
- Agreed sale price.
- Amount paid as a deposit.
- Method of payment.
- Type of deposit agreed.
- Date or deadline for signing the title deed.
- Allocation of certain costs, where applicable.
- Status of any charges on the property.
- Consequences in the event of a breach.
- Any additional conditions agreed between the parties.
The Notariado highlights as key elements the identification of the buyer and seller, the property, its description and the agreed price.
The clearer the wording, the lower the risk of different interpretations later on about what was agreed.
Types of contrato de arras
Not all deposit contracts have the same characteristics or involve the same obligations for the buyer and the seller.
There are three main types of deposit: confirmatory (arras confirmatorias), penitential (arras penitenciales) and penal (arras penales). Knowing the differences is essential to understand the consequences of a breach of contract or of one of the parties deciding not to go ahead with the sale.
Confirmatory deposit (arras confirmatorias)
A confirmatory deposit serves as proof that the sale has been agreed and as an amount paid on account of the price.
According to the Notariado, this is the most common type.
It does not in itself give a free right to withdraw from the transaction simply by losing the amount paid.
If one of the parties fails to comply, the consequences will depend on the contract and on the general rules that apply to breach of obligations.
Therefore, you should not assume that any amount paid as a deposit allows the buyer to walk away from the transaction losing only that money.
Penitential deposit (arras penitenciales)
A penitential deposit allows either party to withdraw from the sale by accepting the agreed financial consequences.
This type is expressly regulated in Article 1454 of the Spanish Civil Code. If the buyer withdraws, they lose the amounts paid; if the seller withdraws, they must pay back double the amount.
Precisely because of these effects, the contract should make it clear that it is a penitential deposit and what the consequences of withdrawal will be.
It is not enough to assume that every deposit automatically works this way.
Penal deposit (arras penales)
A penal deposit is linked to a penalty set for the event of a breach.
Its purpose is not simply to allow one party to walk away freely from the transaction, but to set in advance a financial consequence if that party fails to meet its obligations.
The exact effects will depend on how the contract is worded, so it is especially important to review the clauses before signing.
What to check before signing a contrato de arras
The contract should be signed after checking the legal and financial situation of the property. As well as checking ownership and any possible charges, it is a good idea to know the documents needed to sell a property to make sure the owner has everything required to complete the transaction.
Among other things, you should check:
- That the seller really is the owner.
- The information in the Land Registry (Registro de la Propiedad).
- Any mortgages, seizures or other charges.
- The description and cadastral reference.
- The situation of the community of owners.
- The latest IBI (property tax) bill.
- The relevant planning documentation.
- Any renovations or extensions carried out.
- The time needed to obtain financing.
- The items or elements included in the sale.
You should also check that garages, storage rooms or other annexes included in the transaction are correctly identified.
Carrying out these checks before paying a significant amount helps to detect problems that could later affect the signing of the title deed.
Signing a contrato de arras when buying a property in Cumbre del Sol
When buying a property in Cumbre del Sol, the contrato de arras allows you to put the main terms of the transaction in writing before completing the sale before a notary.
As well as setting out the price, deadlines and agreed conditions, it is important to check that all the elements included in the property, such as garage, storage room, plot or furniture, are correctly identified.
Having the documentation ready and coordinating financing and signing in advance helps the process move forward more securely and without unnecessary delays.
At Cumbre del Sol Pre-Owned we can support you throughout the buying process and help you find a property that suits what you are looking for.
Learning what living in Cumbre del Sol is like can also help you assess its residential areas, services and different property options before making a decision.
Contact our team to find out about the properties currently available in Cumbre del Sol.
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