The ‘Arras’ Contract

The ‘Arras’ Contract
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Buying Property in Barcelona? Understand the ‘Arras’ Contract

The Arras contract contains the important, and normally the final, terms of a property-purchase agreement. When the Buyer signs, they must pay a 10% deposit. Thus, only sign if you are absolutely sure you’re ready to buy.

1) How it works

a) Buyer. The Buyer pays 10% of the property’s purchase price when they sign. If they decide not to buy, they lose the 10%. The amount (10%) is not a legal requirement, it’s negotiable.

b) Seller. If the Seller decides not to sell, they must pay the Buyer back double the deposit (20% of the purchase price).

2) Purpose

a) To bind both parties to the deal. It reserves the property in the Buyer’s name because the Seller can’t back selll to someone else unless they pay a penalty. And the Buyer pays a penalty if they don’t buy.

b) It forces the parties to think through and write down all the important terms of the deal before they proceed.

3) Before Signing

The Buyer must thoroughly investigate the property (due diligence) to be sure the Seller is the true owner, to find any mortgages or liens on the property, confirm the property’s dimensions, etc. You’ll need some documents from the Seller to do this. If they refuse, don’t pay the deposit. They might have something to hide.

4) Arras Contract Terms

A Notary Public prepares the final deed using the terms in the Arras, so treat as the deed. Below is a summary of some terms. You can propose any term you need. Be creative to protect your interests.

a) Penalty Clause. This is standard but must be there: ‘The Seller will return double the deposit to the Buyer if the Seller fails to sign the final deed.’ Or: ‘The Seller will return the deposit if the deed cannot be signed for any reason beyond both parties’ control.’ In case it’s no one’s fault you get your deposit back.

b) Property Repairs. Repairing buildings in Barcelona can be really expensive. It’s an issue that must resolved before you sign the arras.

c) Buyer’s Mortgage. ‘The Buyer will pay part of the purchase price with a mortgage. The mortgage application is pending. If the mortgage is not approved, the Buyer won’t buy and the Seller must return the deposit.” It’s best to have the mortgage approved before you sign the arras; but some Sellers insist on signing the Arras first. If so protect yourself.

5) To whom does Buyer pay the Arras?

a) Seller. This is best because if the deal falls through you only have to chase one party for your 20%.

b) Agent. Some agents want the Buyer to pay them the Arras so they can get their fee. If something goes wrong and deed is not signed, they still get paid. But then you have to chase two parties to get your 20%. The agent will say ‘it’s not my fault, talk to the Seller.’ The Seller will say ‘I only have part of your deposit, talk to the agent’, etc. It can create a big mess. It’s best to pay the Seller.

c) Agent insists on payment. The agent might refuse to sell if you don’t pay them the arras. First, request to see their authorization to receive money on behalf of the Seller. Then add a term to the Arras saying that “the Seller still has to pay double the deposit to the Buyer if the deed cannot be signed …” Tell the Seller what’s going on and make it clear that they have to cover for the agent. If they refuse keep battling.

Buying property in Spain can be a contact sport. What’s important is that you, the Buyer, not pay anything unless you are completely protected.

For questions feel free to email [email protected] or call 64 665 365.

15 Comments on “The ‘Arras’ Contract”

  1. Good afternoon, I have a friend wanting to pass on an apartment that he has bought off plan for €270,000 He had to pay 10% down plus VAT about 1 year ago and the remainder upon completion which will be over the next 2 to 3 weeks. He has not signed anything yet at the notary’s.

    He has decided to transfer the property on to another person with a €10,000 profit. We were told by the laywer of the buyer that there is a new law and that the buyer will now have to pay the 10% VAT as it is a new construction plus 8% transfer tax which seems extremely high and unfair to us as the first buyer never took possession of the property and it is just transferred onto another person.

    Can you please let me know if this is correct?

    I have just spoken to an accountant and he told me that there should be a separate invoice for the €10,000 profit and that he should pay 21% VAT on this invoice plus 10% on the purchase price which makes more sense to me.

    Thank you for your help.

    Best regards,

    1. Dear Ellen,


      Thank you for your comment. These tax issues are tricky and must be dealt with properly. They arise frequently. To resolve them correctly I advise that you speak with a Spanish tax attorney (abogado fiscal). I share office space with one with experience in this area. His name is Raul Piñera at [email protected]. He charges 75€ for a one-hour consultation, to review your documents and provide advice. Let me know if your interested and I’ll schedule an appointment for you. Thanks again.

  2. Good evening

    I am about to sign an Arras to buy a property in Spain. It has a term called “cuerpo cierto” which in the English version is stated as “sold as seen”. I am not familiar with this term. I am slightly concerned. In England seller of goods (not property) tend to use the term to absolve themselves of any responsibly.
    There is no survey but the building (built in 1985) looks fantastic no visible structural or otherwise defect and I am not concerned about periodical maintenance items.


    Kindly Regards


    1. Gabriel,

      Cuerp Cierto has its own meaning in an Arras contract. I’d have to see the context before I can give an answer. Let me know if you can email it or give me a call: 664665365. Thanks, Mark

  3. Thanks Mark.

    This is what it says

    “That the Buyers have been informed in detail of the characteristics, state of conservation and dimensions of the property object of this contract and that is sold ´as seen´.”

    The spanish version says:

    “Que la parte compradora ha sido informada detalladamente de las características, estado de conservación y dimensiones del inmueble objeto de este contrato que se vende como ´cuerpo cierto´.”

    I don’t have your email but if you could please email me and will give you more details.


    I don’t have your email

  4. Pingback: How to Buy Property in Barcelona: A Guide for Foreigners - Spain Advisors

  5. Hi Mark,

    We have agreed to sign an Arras on a property.

    The seller is short on Money so needs our deposit to help bring the Nota simple up to date.The cadastre is up to date, but the nota simple needs an architect to add a pool and out building, which has been there for over 5 years.

    If they back out and we need the 20% returned, how does this work. My worry is as they are short of money, how can they afford to pay double back if something goes wrong?


    1. Paul, To update the nota simple an architect prepares a report adding the structures. He gives it to a Notary Public who uses it to prepare an ‘Escritura de Obra Nueva’ or ‘Escritura de Modificación’. This escritura is filed with the Registro, who then issue an updated nota simple. Then you can buy the property. I’m doing a case like this now and it’s taking a long time. The seller, or someone, has to pay each party involved.

      If the seller backs out of the arras, they should return double of whatever you paid (normally 10% of the purchase price x 2 = 20%). If they don’t have 20%, at least try to get the 10% you paid. Otherwise you can sue them, get a judgment and place a lien on the property. You would need a Spanish lawyer for this.

      I would be careful paying this person 10% of the purchase price. You should also find out how long it will take before you can sign the final deed. Depending on the property, updating a nota simple can be a long process. Feel free to call or email if you have more questions.

  6. Dear Mark ,
    My name is Ivan ,I am buying a commercial property in Barcelona, I am told by my solicitor, I need to pay 20% arras of the purchase price, and the seller can use that money even though the sell is still under process,it doesn’t sound right for me . In uk, we pay everything on the date exchange contract. I feel as buyer, my interest is not protected properly . Am I right ?
    Much appreciate it with your prompt answer when you can!
    Kind regards


    1. Ivan,

      Normally the buyer pays a 10% deposit with the arras. If you don’t buy you lose the 10%, so it’s the point of no return. If the seller does not sell, they must return double the 10%. So the seller must have that 20% available in case they decide not to sell you the property. The amount of the arras payment, however, can be 20%; 10% is not the law. But if you pay 20%, you should ask for something back from the seller since you’re paying more than the normal amount. And of course, be sure the seller has at least the amount you pay for the arras on hand in case the sale does not go through. So legally he can ‘use’ the arras money, just as long as he has it on hand in case the sale does not occur.

  7. Hello! We are just about to sign an arras on a property in Barcelona. Our mortgage is not finalised and they now want to delay the date of selling for two months. They still want us to sign the atrás now, but we are worried if we don’t get our mortgage then we lose all the money. We asked for a clause to say if we don’t get a mortgage then we get our deposit back but they refused. Is this normal ?!

    1. Dear Anna,

      A common dilemma. In general, sellers normally refuse to include a clause promising to return the arras money in case the buyer’s mortgage is denied. Basically, there are two solutions outlined below. Please don’t rely on these as I need to know more details about your case.

      1) Ask your bank for pre-approval of the mortgage in writing. They might grant this, but will want to do an assessment (tasación) of the property first. This costs about 350€. Ask the seller to block the flat until your bank does an assessment; then if the assessment comes out OK, ask the bank for pre-approval.

      2) If the property is located in Catalunya, state in the arras that the terms of sale are controlled by Catalan law. It could help you get your arras money back in case the mortgage is denied as Catalan law is more flexible than Spanish law.

  8. Hi Mark! Your blog is remarkably helpful, I must say. We are attempting to obtain a mortgage through Bankia for a purchase on the Costa Brava. The bank is asking for several documents to be apostilladas, aka apostilled here in the U.S. Our laws here state that only public documents can be apostilled, such as birth/death/marriage certificates. The bank wants our verification of employment (we don’t have actual, signed employment contacts here), paycheck stubs, Experian reports (aka U.S. version of CIRBE) & several other documents apostilled, but there is no signature, notarized or otherwise, to apostille. The Bankia agent, although very pleasant, offered no clarification. Any suggestions? CU

    1. First, ask the bank if they will accept your 2018 tax return as proof of income. This, with recent paycheck stubs, is usually enough to prove income. As for documents and an apostille, the best you can do is ask the person or company that issues the document (proof of employment letter, Experian report, etc.) to sign it before a notary public in the USA. Then send the original document to the Sec of State for an apostille. They can issue an apostille for any document signed by a notary public. (The notary has their name and signature on file with the state, the secretary checks to confirm that the notary signature is valid).

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