What a reservation agreement should achieve
A reservation (often an agent's form) should do three things: stop the seller marketing the property for a short period, fix the price and main terms, and give you time to complete due diligence. The fee should be modest, held by the agent or a lawyer, and refundable if the legal or technical checks are not satisfactory or the parties do not sign the arras contract.
When the deposit must be refundable
- If the registry shows a different owner, an undisclosed charge or a seizure.
- If licences or planning reveal serious problems.
- If a condition fails: mortgage, permit, legalisation, tourist licence transfer.
- If the seller cannot deliver the property free of tenants, debts and charges.
None of these is automatic: they must be in the document.
Understanding arras
| Type | Effect |
|---|---|
| Penitential (art. 1454 CC) | Either party can withdraw: buyer loses deposit, seller returns double |
| Confirmatory | Deposit is part payment; breach can lead to enforcement or damages |
| Penalty | Deposit is a penalty for breach; the contract can still be enforced |
The type of arras must be stated expressly. In Mallorca, penitential arras are the most common, and the courts interpret ambiguous wording narrowly.
Terms to settle before signing
- Exact identification: registry number, cadastral reference, surfaces, parking, storage, furniture.
- Price, deposit and payment method; who holds the deposit.
- Completion date and extension mechanism.
- Delivery free of charges, debts, tenants and occupants.
- Conditions and what happens if they fail.
- Allocation of taxes, plusvalía, community levies and costs.
- Retentions for a non-resident seller.
What to do if you have already signed
Send the documents and payment receipts to your lawyer. Depending on the wording and the facts, there may be grounds to rely on a condition, to renegotiate, or to argue that the seller has not complied. If the problem is a delay in an off-plan purchase, different rules apply: see recovering off-plan deposits.
We draft and review contracts for buyers across Mallorca, Menorca, Ibiza and Formentera: see contracts and deposits. 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.
Frequently asked questions
Is a reservation fee in Mallorca refundable?
Only if the document says so. Insist on a written refund clause linked to the legal checks.
How much is the arras deposit?
It is negotiable; around 10% of the price is common.
What happens if the seller backs out of an arras contract?
With penitential arras, the seller must return double the deposit.
Can I add a mortgage condition to the arras contract?
Yes, if the seller agrees. Define the loan, the deadline and the evidence of refusal.