Deposit Contracts (Arras) in Catalonia: What to Check Before You Sign
Between "we're interested" and signing before a notary, some time usually passes: the buyer needs to arrange financing, the seller to gather the paperwork, and both to agree on a date. The deposit contract, known in Spain as a contrato de arras, keeps that period from being left in the air. One party hands over an amount, and both commit to going ahead on specific terms.
It looks like a formality, but what you sign in that document decides what happens if someone changes their mind. And in Catalonia the rules have their own nuances.
What arras are
Arras are a sum of money the buyer pays the seller when the sale is agreed, before the public deed. It is normally deducted from the final price. In practice around 10% of the price is common, although there is no mandatory figure: it is an agreement between the parties.
What matters most is not the amount but the type of arras agreed, because each type has different consequences.
The three types of arras
Confirmatory arras (arras confirmatorias). They confirm that a contract exists and work as a payment on account of the price. If one party fails to perform, the other can demand performance or terminate the contract with compensation for damages. They do not let either party "walk away" simply by losing the money.
Withdrawal arras (arras penitenciales). These are what most people have in mind. They allow either party to withdraw from the contract at a known cost:
if the buyer withdraws, they lose the deposit paid;
if the seller withdraws, they return double the amount received.
Penalty arras (arras penales). They work as a penalty for breach. Their effect depends on how the clause is drafted and on the applicable rules, so it is worth reading carefully. They are less common in residential sales.
What is different in Catalonia
For sales of homes located in Catalonia, the Catalan Civil Code generally applies (article 621-8 of Book Six). The parties may, however, agree on another law connected with the transaction, and international rules also come into play when parties from other countries are involved. In those cases, it is worth confirming which law governs the contract. Three points are worth knowing:
1. Unless otherwise agreed, arras are confirmatory. The law treats the money paid by the buyer as a sign that the contract is closed and as a payment on account of the price. For arras to be withdrawal arras, that is, to allow withdrawal by losing them or returning them doubled, this must be agreed expressly. An ambiguous document may not produce the result both parties expected.
2. An optional mechanism with a notary and the Land Registry. For real estate, the law allows withdrawal arras agreed for a maximum term of six months and deposited with a notary to be recorded in the Land Registry. In that case the property is charged with their return, which strengthens the buyer's position. It is a specific option, not a requirement for all withdrawal arras.
3. A refused mortgage may allow the buyer to withdraw. If the contract provides that a named lender will finance the purchase and, unless otherwise agreed, that lender refuses the loan, the buyer may withdraw and recover the amount paid. The refusal must be proven in writing within the agreed period, and it cannot be due to the buyer's own negligence.
That is why, in Barcelona, a generic template from the internet is not enough: the document should be drafted with Catalan law and the circumstances of the transaction in mind.
What a deposit contract should include
Every transaction is different, but a good deposit contract usually covers:
the identification of buyer, seller and property (with its cadastral and land registry references);
the total price and the amount paid as arras;
the type of arras, stated expressly;
the deadline for signing the public deed;
who pays each cost and tax;
the condition in which the property is handed over, and whether there are charges, tenants or debts with the owners' association;
if the purchase depends on financing, with which lender and within what period.
Reservation and arras: read what you sign
Before the arras, a reservation document with a smaller amount is often signed. Not all reservations are the same: some only take the property off the market for a few days, while others already contain binding obligations for both parties. What matters is not the document's name but what it says: what each party commits to, what happens to the money and within what period.
Before you sign
The deposit contract is the moment a transaction moves from intention to commitment. Before committing a significant amount, it is worth reviewing the land registry extract (nota simple), any charges, the situation with the owners' association and, if you are buying with a mortgage, the bank's real timelines.
If you are selling, our guide to selling in Barcelona (in Spanish) sets out the steps, documents and costs of the whole process.
If you are buying, our search and purchase service supports you from the first viewing to the deed.
This article is for information only and is not a substitute for legal advice from a qualified professional.
