Free assessment
No obligation
Spanish arras contract explained: deposit, types and mortgage clause
The arras contract is the binding pre-purchase agreement signed between buyer and seller before the notary deed. It establishes the price, conditions and timeline of the transaction — and locks both parties in. As a non-resident relying on a Spanish mortgage, getting the arras right is critical: a missing financing clause has cost foreign buyers tens of thousands of euros when their mortgage was denied after signing. This guide explains the three types of arras, what each one means for you, and the clauses every foreign buyer must insist on.
The essentials
9 min full read- 1Arras = binding pre-purchase deposit, typically 10% of purchase price
- 2Three types: penitenciales (most common), confirmatorias, penales — differ in withdrawal consequences
- 3Penitenciales: buyer can withdraw losing the deposit; seller can withdraw paying double
- 4Financing clause (cláusula de financiación) is essential for non-residents — protects deposit if mortgage denied
- 5Sign before a notary if amount >€10,000 (not legally required but strongly recommended)
Buying property in Spain as a non-resident?
We compare 53 Spanish banks for foreign buyers. Free assessment in 24-48h, all in English. Bank of Spain reg. nº E569.
What is the arras contract
The arras (literally 'earnest money') is a private contract under Spanish Civil Code articles 1124 and 1454. It binds both buyer and seller to the property transaction at the agreed price and timeline. It is signed AFTER you have viewed the property and agreed terms, BEFORE the notary signing where the property formally transfers.
The typical structure: buyer transfers 10% of the agreed price to the seller (held in escrow by a lawyer or directly), both parties sign a contract specifying price, timeline, included furniture, registration data, and any contingencies. The remaining 90% is paid at the notary signing 30-90 days later.
Crucially, the arras contract is fully enforceable in Spanish courts. Walking away has real financial consequences. For non-residents the stakes are higher: you typically cannot easily attend court proceedings in Spain to recover funds if the seller defaults.
The three types of arras
Spanish law distinguishes three types, with very different consequences. The contract MUST specify which type — if it does not, Spanish courts default to confirmatorias (the strictest type).
| Type | Legal article | Buyer withdraws | Seller withdraws |
|---|---|---|---|
| Penitenciales | Art. 1454 CC | Loses the deposit | Returns DOUBLE the deposit |
| Confirmatorias | Art. 1124 CC | Court can force completion + damages | Court can force completion + damages |
| Penales | Art. 1152 CC | Loses deposit + may face additional damages | Returns deposit + damages, no doubling |
Penitenciales
Art. 1454 CC
Loses the deposit
Returns DOUBLE the deposit
Confirmatorias
Art. 1124 CC
Court can force completion + damages
Court can force completion + damages
Penales
Art. 1152 CC
Loses deposit + may face additional damages
Returns deposit + damages, no doubling
The financing clause (cláusula de financiación) — critical for non-residents
Without a financing clause, if your Spanish mortgage is denied or the FEIN comes back with worse terms than expected, you forfeit your deposit. This is the single biggest financial risk for foreign buyers and the most common cause of disputes.
A properly drafted financing clause states: 'In the event the buyer is unable to obtain mortgage financing of at least X euros at terms substantially equivalent to those described in [attached pre-approval letter] within Y days, the contract shall be voided and the deposit returned in full to the buyer, without further obligation by either party.'
Key parameters to include: the exact loan amount needed, the maximum acceptable interest rate or differential, the bank or banks from which financing is sought, the deadline (typically 30-60 days), and the procedure for refunding the deposit if the condition fails.
Sellers often resist the financing clause because it weakens their position. Be firm: if you are a non-resident relying on a Spanish mortgage, no professional advisor would let you sign without it. If the seller refuses, walk away — the risk is not worth it.
Private signature or notary deed?
The arras contract is NOT legally required to be signed before a notary — a private document signed by both parties is fully enforceable. However, for amounts >€10,000 it is strongly recommended to sign before a notary as 'escritura pública' for three reasons: (1) it gives the contract executive force in court, (2) it creates a public record with a fixed date, (3) it allows the seller to be compelled to perform via 'ejecución forzosa' if needed.
Cost of notary deed for arras: €300-€500 + AJD (typically 0.5-1.5% of deposit amount, varies by autonomous region). The seller usually pays the AJD but this can be negotiated.
Alternative for non-residents: have the arras drafted and reviewed by a Spanish abogado, then sign privately. Cheaper (€300-€600 in legal fees) but with less legal weight. Choose notary deed for properties >€500,000 or sellers you have not met in person.
Practical tip for remote buyersIf you cannot be in Spain to sign the arras, your Spanish lawyer can sign on your behalf via a Power of Attorney (poder notarial). The PoA must be specific to the arras transaction and signed at the Spanish consulate in your country or apostilled in your country.
Essential clauses for non-residents
Beyond the financing clause, ensure these are explicitly written: (1) exact property identification with Catastral reference (Registro de la Propiedad data), (2) included furniture and fittings with itemised inventory, (3) certificate of urbanistic compliance (declaración responsable urbanística), (4) ITP/AJD allocation (buyer pays unless negotiated otherwise), (5) penalty for late completion by seller.
For new-build purchases (obra nueva): completion certificate (certificado final de obra), first-occupancy licence (licencia de primera ocupación), and the developer's bank guarantee for the deposit (mandatory under Ley 38/1999). Never pay arras to a developer without a verified bank guarantee.
For inherited or shared properties: written authorisation from ALL co-owners or heirs. If even one co-owner does not consent, the sale cannot proceed and you may lose months waiting for the contract to clear.
Request your non-resident mortgage assessment
Request your assessment
Fill in your details and we will contact you within 24 hours with the best non-resident mortgage options.
What will you use the property for?
Prefer to contact us directly?
Message us on WhatsAppHave more questions? Ask Hipo, our AI mortgage assistant
Frequently asked questions
What if my mortgage is approved but at a higher interest rate than I expected?
This is exactly what the financing clause should cover. A well-drafted clause specifies the MAXIMUM acceptable rate (e.g. 'fixed rate not exceeding 3.50%' or 'variable rate not exceeding Euribor + 1.00%'). If the bank's FEIN exceeds that threshold, the financing clause triggers and you can recover your deposit. Without that explicit ceiling, you are forced to accept the bank's offer or forfeit the deposit.
Can I extend the arras deadline if my NIE takes longer than expected?
Yes, but it requires explicit written consent from the seller in an addendum (anexo) signed by both parties. Build in a buffer when negotiating — 60-90 days is more realistic than 30 for non-residents who need NIE + bank account + mortgage approval. The seller is usually open to extensions if you are progressing in good faith and can show documentation.
What happens to the deposit between arras and completion?
Best practice: deposit held in escrow by your Spanish lawyer or by a notary. Worst practice: paid directly to the seller's personal bank account (impossible to recover if the seller misappropriates). Always insist on escrow — your lawyer's professional liability insurance covers misappropriation. Cost of escrow: typically 0.1-0.3% of deposit.
If the seller withdraws under penitenciales, when do I get the doubled deposit?
Within 30 days of the seller's formal withdrawal (burofax with proof of delivery). If the seller delays or refuses, you can sue for specific performance + the doubled amount + interest at the legal rate (currently 4-4.5% per year). For amounts >€20,000, this is worth pursuing; below that, the litigation costs may outweigh the recovery.
Can I use a mortgage pre-approval letter as proof for the financing clause?
Yes, and you should attach it to the arras contract as an annex. The pre-approval letter from the bank (with specific loan amount, rate range and conditions) becomes the reference point for the financing clause. If the final FEIN substantially diverges from the pre-approval terms, the financing clause triggers. Most Spanish banks issue informal pre-approvals (preconcesión) within 2-3 weeks.
Useful tools
Mortgage Simulator
Calculate your monthly payment, borrowing capacity and early repayment
Open tool⚖️Mortgage Comparator
Compare offers by rate type, term, fees and conditions
Open tool🏠What home can I afford?
Maximum property price based on your income, savings and region
Open tool✅Will I get approved?
Quick test to estimate your mortgage approval probability
Open tool📊Mortgage Calculator 360
Payment, affordability, rate comparison and amortisation
Open tool🗺️Tax & Cost Simulator
Calculate taxes and costs by region (comunidad autónoma)
Open tool📈Euribor Today
Current Euribor rate, chart and impact on your mortgage
Open tool🔄Rate Review Calculator
Calculate your new payment at your next mortgage review
Open tool🏦Subrogation Calculator
Simulate 3 bank-switch scenarios: monthly savings, total savings and break-even
Open toolNeed guidance on your non-resident mortgage?
We analyse your profile and help you find the best non-resident mortgage conditions. No commitment.
About this content
Mortgage Content Editor
Published: July 2026
Last updated: July 2026
This page is informational and editorial in nature. It explains how the described mortgage conditions typically work and what to review, without guaranteeing results or replacing a lender’s assessment.