Why buyers get caught out
A deposit of around 10% of the price is often paid within days of the offer, under a contract that says nothing about planning, licences or finance. If a problem appears afterwards, the buyer must choose between completing a flawed purchase or losing the deposit. A few clauses negotiated before signing avoid that dilemma.
The documents we draft and review
| Document | Purpose | What we protect |
|---|---|---|
| Offer or reservation | Takes the property off the market for a short period | Refund if due diligence fails; fee held, not paid to seller |
| Arras contract | Binding private contract with a deposit | Conditions, deadlines, property description, costs |
| Private purchase contract | Full terms before the deed | Warranties, retentions, handover and inventory |
| Option contract | Right to buy within a period | Price, term and registration of the option |
| Off-plan contract | Purchase from a developer | Bank guarantee, special account, specifications |
Clauses that make the difference
- Precise identification of the property, parking, storage, furniture and the registered and cadastral surfaces.
- Delivery free of charges, tenants and occupants, with the cancellation of any mortgage at completion.
- Suspensive conditions: mortgage approval, a planning certificate, the transfer of a tourist licence, military authorisation for non-EU buyers.
- Retentions for the non-resident seller's 3% tax, plusvalía, debts or agreed repairs.
- Seller warranties on licences, debts, disputes and the condition of pools, roofs and septic systems.
- A realistic completion date with a mechanism to extend it if a third party (bank, registry, ministry) causes the delay.
Understanding arras
Article 1454 of the Spanish Civil Code allows the parties to agree "penitential" arras: each can withdraw, the buyer losing the deposit or the seller returning it doubled. Other contracts use confirmatory or penalty arras, with different consequences. The type of arras must be stated clearly; ambiguous wording leads to disputes. Our guide to reservation and arras contracts explains the differences with examples.
Off-plan and new-build contracts
When you buy from a developer, Spanish law requires every advance payment for a home to be guaranteed by a bank guarantee or insurance and paid into a special account. We check that each guarantee exists in your name before money moves, and we link payments to construction milestones. See new-build property in Mallorca.
If you have already signed
Send us the contract and the payment receipts. Depending on the wording, the property and what has happened since, there may be room to renegotiate, to rely on a condition or to recover the deposit. Acting quickly matters, because deadlines in arras contracts are often short. Our team works on all four islands from Palma; for other legal matters in English, see Castell.law.
Before you pay a deposit, ask a lawyer
Send us the listing or the document you have been asked to sign. An English-speaking property lawyer will tell you what needs checking and what it could cost you not to.
Questions about property contracts and deposits
Is a reservation fee refundable?
Only if the document says so. Ask for a written clause refunding the fee if the legal checks are not satisfactory, and for the fee to be held by the agent or a lawyer rather than paid to the seller.
How much is the deposit in an arras contract?
It is negotiable; around 10% of the price is common in the Balearic Islands.
Can I add a mortgage condition?
Yes, if the seller agrees. It should define the loan amount, the deadline and the evidence of refusal that releases the deposit.
Can you sign the contract for me?
Yes, with a power of attorney. Many of our clients never travel until they collect the keys.