Arras Contract vs Reservation Agreement in Spain: What Foreign Buyers Need to Know
Arras Contract vs Reservation Agreement in Spain: What Foreign Buyers Need to Know
When buying property in Spain, foreign buyers often come across two important concepts: a reservation agreement and an arras contract.
Although both involve paying money to secure a property, they are not the same and offer different levels of protection for buyers and sellers.
Understanding the difference can help you avoid costly mistakes when purchasing a property on the Costa Blanca, Costa del Sol or anywhere else in Spain.
What Is a Reservation Agreement in Spain?
A reservation agreement is usually the first step after a buyer decides they are interested in a property.
The buyer pays a reservation deposit, often a few thousand euros, to temporarily remove the property from the market while legal checks and contract preparation take place.
The purpose of a reservation agreement is mainly to show commitment from both parties and give the buyer time to complete the necessary checks before signing the main purchase contract.
How Does a Reservation Deposit Work?
The amount paid depends on the agency, seller and circumstances of the transaction. It is commonly between €3,000 and €10,000.
The agreement normally includes:
- The agreed purchase price
- The property details
- The reservation period
- Conditions for moving forward with the purchase
- What happens if either party decides not to continue
Because reservation agreements can vary significantly, buyers should always understand the exact terms before transferring any money.
What Is an Arras Contract in Spain?
An arras contract is a private purchase agreement commonly used in Spanish property transactions.
It is a stronger commitment than a simple reservation agreement and usually confirms that both buyer and seller intend to complete the sale.
The most common type is called arras penitenciales, regulated under Article 1454 of the Spanish Civil Code.
How Do Arras Penitenciales Protect Buyers and Sellers?
The arras contract usually involves a deposit, often around 10% of the purchase price.
The consequences of withdrawing are clearly defined:
- If the buyer withdraws, they normally lose the deposit.
- If the seller withdraws, they normally must return double the deposit amount.
This system gives both parties security and creates a clear commitment to complete the purchase.
Reservation Agreement vs Arras Contract: Main Differences
| Reservation Agreement | Arras Contract | |
|---|---|---|
| Purpose | Temporarily remove the property from the market | Formal commitment to complete the purchase |
| Typical amount | €3,000 – €10,000 | Usually around 10% of purchase price |
| Legal strength | Depends on wording | Stronger legal commitment |
| Used when | Early stage of purchase | After due diligence and agreement of conditions |
Which One Is Better for Foreign Buyers?
There is no universal answer. The right option depends on the stage of the purchase and the circumstances of the transaction.
For international buyers purchasing property in Spain, a reservation agreement can be useful to secure a property while legal checks are completed.
An arras contract provides stronger protection once both parties are ready to proceed with the sale.
New Build Properties vs Resale Properties
The process can also differ depending on whether you are buying a new-build property from a developer or a resale property from a private owner.
For new developments on the Costa Blanca or Costa del Sol, buyers often sign a reservation contract with the developer before moving to the private purchase contract.
For resale properties, the process commonly moves from reservation agreement to arras contract and finally to completion before a Spanish notary.
Common Mistakes Foreign Buyers Make
- Paying a deposit without understanding the contract terms
- Signing documents without independent legal advice
- Assuming all deposits have the same legal meaning
- Not checking property documentation before committing
Final Thoughts
Both reservation agreements and arras contracts are important parts of the Spanish property buying process, but they serve different purposes.
Before transferring any deposit, foreign buyers should understand what they are signing and what protection the agreement provides.
Whether you are buying an apartment in Alicante, a villa in Villajoyosa, or a property in Marbella or Estepona, professional guidance can help make the process safer and more predictable.
Frequently Asked Questions
Is an arras contract legally binding in Spain?
Yes. An arras contract creates legal obligations between buyer and seller, especially when it includes penitential arras under Article 1454 of the Spanish Civil Code.
How much is the arras deposit in Spain?
It is commonly around 10% of the purchase price, although the amount can vary depending on the agreement.
Can I get my reservation deposit back in Spain?
It depends on the terms of the reservation agreement. Buyers should carefully review the conditions before signing.
Should I sign a reservation agreement before checking the property documents?
Ideally, important legal checks should be completed or clearly included as conditions before making a significant financial commitment.
