The Arras Contract for Sellers: What to Ask For, What to Avoid and How to Protect Yourself

You have found a buyer for your property in Orihuela Costa or elsewhere on the Costa Blanca. After weeks of viewings and negotiation, it is time to sign the arras contract (contrato de arras). Many sellers feel at this point that the hard part is over and sign without giving the document the attention it deserves. The arras contract is not a formality: it sets the ground rules for both parties and, if poorly drafted, can leave you exposed to financial losses or obligations you did not anticipate.

Arras: what sellers need to know

Arras are a sum of money paid by the buyer to the seller at signing as a guarantee of purchase intent. On the Costa Blanca market, the standard amount is between 5% and 10% of the sale price, though no percentage is prescribed by law. From a seller's perspective, the contract serves two purposes: confirming that a firm agreement exists on price and conditions, and establishing what happens if either party fails to reach completion.

What many property owners do not realise is that there are three types of arras with very different consequences. Knowing which one you are signing can be the difference between keeping the deposit if the buyer walks away, and having to pay double if the seller is the one who backs out.

The three types of arras and their consequences

Spanish civil law regulates these three models, though with differing levels of detail. Understanding their implications before signing allows you to negotiate from a strong position.

In practice, arras penitenciales under Article 1454 of the Civil Code are the most common type in the residential market on the Costa Blanca. Their main advantage for the seller is predictability: if the buyer disappears, you keep the deposit; if you need to pull out, you know exactly what it will cost. Arras confirmatorias, by contrast, bind both parties more firmly: either side can take the other to court to compel completion of the sale, making the process considerably more complex and expensive.

What the arras contract must include

In our experience, poorly drafted contracts generate more disputes than actual breaches. A complete arras contract should include, at minimum, the following elements:

• Full identification of the parties: names, ID or NIE numbers and addresses of both seller and buyer. If there are multiple sellers (for example, in an inheritance or co-ownership), all must be named and must sign.
• Registry description of the property: cadastral reference, land registry folio number, address and floor area. If a garage or storage room is included in the sale, this must be stated explicitly to avoid later disputes.
• Total agreed sale price and how the deposit paid at signing is offset against the final amount.
• Deposit amount, payment method (bank transfer, banker's cheque) and specific payment date.
• Type of arras stated explicitly. Without this, in the event of a dispute the courts must interpret the parties' intentions, which creates uncertainty and unnecessary cost for both sides.
• Deadline for signing before a notary: either a specific end date or a number of days counted from signing.
• Charges and encumbrances: a declaration by the seller of any outstanding mortgages, extraordinary community fees, or any burden to be cleared before completion.
• Suspensive conditions: if the purchase is conditional on obtaining a mortgage, the contract must set the maximum period, the loan amount, and what happens to the deposit if the bank refuses.

Clauses to avoid or renegotiate

Some contracts drafted without legal advice include clauses that look standard but disadvantage the seller. The most common are:

• Excessively long timelines: more than 60 days to reach notarisation ties up your property for too long. For mortgage purchases, 45 days is usually enough for valuation and approval; for cash purchases, 30 days is ample.
• Open-ended mortgage condition: if the contract states the sale lapses «if the buyer does not obtain a mortgage» without specifying a maximum loan amount or a deadline, the buyer can withdraw on the back of any bank refusal.
• Confirmatory arras without realising it: some contracts use language implying an obligation to complete without citing Article 1454 CC. If you want the freedom to withdraw by paying double, check that article appears in the document.
• Automatic deadline extension: a clause that extends the period automatically at the buyer's request removes your control over the sale timetable.
• Undefined cost allocation: the contract must specify who pays what (municipal capital gains tax, notary fees, land registry fees, transfer tax or VAT as applicable). Leaving this open invites last-minute disputes.
• Uncapped additional damages in penal arras: if you opt for arras penales, it is sensible to cap the additional damages clause to avoid exposure to disproportionate claims.

Timeline: 30 to 60 days as a rule

The period between signing the arras contract and completing before a notary is not regulated by law, but standard practice on the Costa Blanca and in Orihuela Costa is 30 to 60 days. For mortgage transactions, 45 days gives the bank enough time for the valuation and file processing. For cash purchases, 30 days is more than sufficient.

As a seller, a timeline longer than 60 days works against you: during that period you cannot sell to another buyer, you cannot plan your next transaction with any certainty, and you carry the risk of market changes. If the buyer asks for more time, request a higher deposit in return or negotiate an extension by addendum with an increased arras amount.

Consult a professional before signing

Reviewing an arras contract does not take weeks, but it does require experience with the local property market. We have been working with property owners on the Costa Blanca and in Orihuela Costa since 1988, and a significant part of what we do is identifying these issues before a signature creates a dispute that is difficult to resolve.

If you have a draft arras contract on the table or have just received an offer and want to know how to proceed, contact our team on +34 965 714 362 or write to us at info@bennecke.com. We will go through the clauses with you and advise on the type of arras that best protects your interests in your specific situation.