If you are buying a home in Almería or Murcia, the first serious document you are likely to sign is the contrato de arras, often called the deposit contract or earnest money contract. It is short, it is usually signed quickly, and it can decide whether you keep or lose a significant sum of money if the purchase does not go ahead.

At MT Solicitors we see British and other international buyers sign it in a rush, sometimes on holiday and sometimes without translation. This article explains what the contrato de arras does, the different types of «arras», and what to check before you put pen to paper.

What is a contrato de arras?

A contrato de arras is a private contract between buyer and seller, signed before the public deed (escritura) at the notary. The buyer pays an agreed sum on account, the seller takes the property off the market, and both parties commit to completing on an agreed date and on agreed terms.

It is different from a simple reservation document. A reservation usually takes the property off the market for a short time while checks are made. The contrato de arras goes further and sets out the price, the completion date, who pays which costs, and what happens if someone backs out. If you are unsure which one you have been handed, ask before you pay anything.

The three types of arras, and why the label matters

Spanish law recognises different functions for the money paid as arras. In practice there are three you will hear about.

Arras confirmatorias (confirmatory). The money is simply an advance payment of the price and proof that the contract is real. It does not give anyone a right to walk away by losing the deposit. If one party fails to complete, the other can generally demand that the contract is fulfilled or ask for it to be ended, with damages in either case.

Arras penitenciales (penitential). This is the type most people have heard of. Article 1454 of the Spanish Civil Code provides that the buyer can withdraw by losing the deposit, and the seller can withdraw by returning double the amount received. It works as a «price to pay» for changing your mind.

Arras penales (penal). The deposit acts as an agreed penalty for breach, while the contract itself remains enforceable. Which rules apply depends on how the contract is drafted.

Does «arras» automatically mean you can walk away?

No, and this is where many buyers are caught out. The Spanish Supreme Court has repeatedly said that penitential arras are an exceptional arrangement and are interpreted restrictively. In broad terms, if the contract does not clearly show that the parties intended the deposit to work as a price for withdrawing, the money may be treated as an advance payment of the price rather than as a way out.

Recent case law has also confirmed the other side of the coin. Where the contract clearly describes the arras as penitential and explains the consequences, the courts will apply the wording as written, and a buyer who withdraws can lose the sums paid.

What this means for you: do not assume anything from the word «arras» alone. The exact wording of the clause decides your rights, so it needs to be read, translated and understood before you sign.

What happens if the buyer pulls out?

If the contract is penitential and the buyer decides not to continue, the buyer normally loses the deposit and the seller is free to sell to someone else. Timing and procedure can matter. The contract may require the buyer to notify the seller in a particular way or before a particular date, and a buyer who simply stops responding may find that the contract is treated as breached rather than properly withdrawn.

If the arras are confirmatory or the contract is silent, the position is different and the seller may have other remedies, so it is important to take advice before deciding to withdraw.

What happens if the seller pulls out?

Under a penitential clause, the seller who withdraws must return the deposit doubled. This is a common scenario when a seller receives a higher offer after signing. Again, the contract wording and any agreed deadlines are crucial.

When you may be entitled to your money back

Not every failed purchase means a lost deposit. Depending on the facts, a buyer may have grounds to recover the money, for example:

• the seller cannot deliver the property free of debts or charges as promised;
• the property turns out to have serious legal or planning problems that were not disclosed, such as an irregular build or missing licences;
• the contract made completion conditional on something that did not happen, such as mortgage approval or obtaining the NIE, and the condition was properly drafted.

Whether any of these applies depends on the contract and the specific circumstances, which is why we recommend legal checks before the arras are signed, not after a problem appears.

Practical checklist before signing

• Check ownership first. Request the Nota Simple from the Land Registry to confirm who owns the property and whether there are mortgages, embargoes or other charges.
• Check the planning status. Confirm the licence of first occupation and, for rural properties, the planning situation.
• Read the withdrawal clause. Is it clearly penitential? What are the exact consequences, and by when must notice be given?
• Include conditions if you need them. If you depend on a mortgage, a sale of another property or your NIE, ask for these to be reflected in the contract.
• Fix the completion date and the notary. Make sure the deadline is realistic, particularly if you are buying from abroad.
• Consider a power of attorney. If you cannot travel, a power of attorney can allow a trusted representative, such as your lawyer, to complete on your behalf.
• Pay safely. Pay by traceable bank transfer to the account named in the contract and keep proof of payment.

Get legal advice before you pay a deposit

The contrato de arras is brief but important, and a small difference in wording can change who bears the risk. A lawyer reviewing the contract and the property documents before you sign is usually a much smaller problem to solve than a dispute after the deposit has been paid.

If you are buying or selling in Almería or Murcia and have been sent a contrato de arras, we would be glad to review it with you in plain English. Contact MT Solicitors on (+34) 950 391 460 or at sara@mtsolicitors.com.

This article is general information and does not constitute legal advice. Every transaction is different, so please seek advice on your own situation before acting.