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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.
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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 the agreed deposit (held in escrow by a lawyer or paid directly to the seller), both parties sign a contract specifying price, timeline, included furniture, registration data, and any contingencies. The rest of the price is paid at the notary signing on the agreed date.
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. For a buyer who depends on a Spanish mortgage, it is the biggest financial risk of the arras.
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, 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. Signing it as a public deed (escritura pública) gives it a fixed date and the stronger evidential weight of a public document, which helps if you ever have to enforce it.
A notary deed is charged on the notary's official fee scale. Ask the notary in advance whether any regional tax applies to your deed.
Alternative for non-residents: have the arras drafted and reviewed by a Spanish abogado, then sign privately. The lawyer's fee is set by the lawyer. A notary deed is worth considering for high-value purchases 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.
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Frequently asked questions
What if my mortgage is approved but at a higher interest rate than I expected?
Can I extend the arras deadline if my NIE takes longer than expected?
What happens to the deposit between arras and completion?
If the seller withdraws under penitenciales, when do I get the doubled deposit?
Can I use a mortgage pre-approval letter as proof for the financing clause?
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About this content
Mortgage Content Editor
Published: May 2026
Last updated: October 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.