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Deposit contract: everything you need to know about this contract in Spain


In Spain, the "contrato de arras" (Deposit Contract) is a fundamental document and, in most cases, an essential condition for sealing an agreement to purchase a property in Spain. Although for many buyers it may seem like a mere formality, especially after months and months of searching for the perfect home, it is a contract that commits both parties to the sale. What is the deposit contract in Spain and how does it work?

  1. What is the purpose of a deposit contract in Spain?
  2. Is a deposit contract compulsory in Spain?
  3. Sample Deposit Agreement
  4. What is normally included in a deposit contract in Spain?

What is the purpose of a deposit contract in Spain?

Firstly, this contract in Spain serves to give peace of mind to all parties involved in a property sale, as this contract of agreement guarantees in writing that the agreed conditions for the property sold are met. If the buyer ultimately decides not to purchase the property after signing this contract, then he will lose the amount that was paid as a deposit. On the other hand, if the seller does not sell the property as agreed, he/she will normally have to refund double the amount of the deposit.

Is a deposit contract compulsory in Spain?

One could say that this contract serves as a preparation for the signing of the purchase contract. But why not sign the purchase contract directly? Is it compulsory to sign a deposit contract in Spain? The answer is no, it is not compulsory at all and you can sign the purchase contract directly and people often do. So it is not always necessary to sign a deposit contract beforehand. If both parties agree on the price, the term, that the financing does not require additional time, or that there are no other circumstances preventing the purchase from going ahead, no prior agreement would be necessary and the deed can be signed directly. But this is not always the case. There are many factors that can delay the signing of the deed of sale, such as cancellation of previous encumbrances, property checks, encumbrances, permissions, licences, applications for finance and even pandemic. There are many and varied reasons for using these prior agreements.

Sample Deposit Agreement

Although you can find many models and templates for Spanish deposit agreements online, it is best to seek the help of a lawyer. The attention they deserve is often not given to these preparatory contracts to a sale and they are often simply considered as a simple reservation without further consequences. However, as already mentioned, there are serious consequences if the terms of this contract are broken by either party.

In Spain, this contract is usually signed in front of a notary who will provide you with an additional guarantee, although in some cases it can also be signed in a real estate agency. The notary informs the parties in detail of the conditions involved so that they can make a decision adapted to the circumstances, with full knowledge of the facts, as well as the time that may be needed to prepare everything. Since there is little regulation of these agreements and their scope is very broad, it is best to call in a professional.

What is normally included in a deposit contract in Spain?

  • Personal data: signing one of these properly drafted contracts will ensure that everyone has the necessary documentation, both in terms of representation, taxation, money laundering, foreign investments, etc.
  • Identification of the transferred property
  • Fees, limitations or other relevant circumstances
  • The price for which the purchase and sale is fixed and the amount to be paid at the time of signing the contract, the advantages and disadvantages for each party and the nature of the possible options
  • Time limit for the execution of the deed of sale
  • Allocation of expenses, so that each party is aware of what they are signing, as this cannot be changed afterwards unless there is a new agreement between the two parties
  • Other issues that may be relevant in each specific case

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