An arras contract (also known as a contrato de arras) is a binding deposit agreement signed before the final property purchase in Spain.
It outlines:
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Price
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Payment terms
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Timeline
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Penalties for withdrawal
In Madrid, it’s standard practice to sign an arras contract before going to the notary.
🛡️ Why Is the Arras Contract So Important?
Because once it’s signed:
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You commit to buying
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The seller commits to selling
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A deposit (usually 10%) is paid
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Penalties apply if either side backs out
👉 Without legal review, foreign buyers risk losing their deposit or inheriting hidden problems.
📌 3 Types of Arras Contracts in Spain
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Confirmatory Arras (Arras Confirmatorias)
🔹 Acts as proof of purchase agreement
🔹 No automatic cancellation option -
Penal Arras (Arras Penitenciales) – Most common
🔹 Buyer loses deposit if they withdraw
🔹 Seller must return double the deposit if they withdraw -
Penalty Arras (Arras Penales)
🔹 Includes specific compensation amounts if terms are broken
📌 We typically draft penal arras with strong protections for foreign buyers.
🧾 What Should Be Included in a Madrid Arras Contract?
✔️ Full identity of buyer and seller
✔️ Exact legal description of the property
✔️ Agreed price and payment method
✔️ Timeline to complete at notary (usually 30–60 days)
✔️ Legal consequences for withdrawal
✔️ Confirmation of legal status, debts, and licenses
✔️ Special conditions (e.g. subject to mortgage, permits)
📌 We draft bilingual arras contracts in Spanish and your preferred language.
🧠 Common Risks with Poorly Drafted Arras Contracts
🚫 Unclear penalty clauses
🚫 Buyer liable for property defects discovered later
🚫 No refund clause for legal or zoning issues
🚫 Deposit paid to seller’s personal account
🚫 No contingency for bank financing or visa delays
💡 Foreign buyers are especially vulnerable if they rely on template contracts from agents.
👨⚖️ How Borderless Lawyers Protects You
✔️ We draft or review your arras contract clause-by-clause
✔️ Ensure the deposit is held securely (e.g. in escrow or lawyer account)
✔️ Add special protections for visa, financing, or planning issues
✔️ Negotiate with the seller’s lawyer or agent
✔️ Translate the full contract to English (or your language)
📌 You receive a clear legal summary of what you’re signing — no surprises.
✍️ When Do You Sign the Arras Contract?
🔹 After price and conditions are agreed
🔹 Before final deed signing at notary
🔹 Typically 2–4 weeks before completion
It can also be used to take the property off the market while due diligence is completed.
💶 How Much Is the Deposit?
Usually 10% of the total purchase price, unless negotiated otherwise.
If the buyer defaults:
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You lose the deposit
If the seller defaults:
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They must return double the deposit (known as arras penitenciales)
📞 Buying Property in Madrid? Don’t Sign Without Legal Review
The arras contract is a serious legal commitment — not just a formality. Let our Madrid-based lawyers review or draft it properly to protect your interests.