Arras contract: what to check before handing over the money

The three types of arras: confirmatory, penitential, and penalty

The Civil Code (art. 1454 CC) recognizes three types of arras. Confirmatory arras are the most common in notarial practice: they serve as an advance payment on the price, but they don't allow either party to withdraw freely — breach leads to a damages claim. Penitential arras are those covered by art. 1454 CC with its well-known 'double or nothing' regime: the buyer loses the delivered amount if they withdraw, and the seller must return double if they are the one who breaches.

Penalty arras are a less common variant that combines the advance payment function (confirmatory) with a specific agreed penalty for breach. For arras to be considered penitential, the contract must expressly state so in writing. If it doesn't, current Spanish case law tends to interpret them as confirmatory, meaning neither party can withdraw simply by 'losing' or 'returning double' — they would have to go to court.

That's why it's essential that your contract clearly specifies the type of arras agreed. It's one of the first things our tool analyzes.

Deed signing deadline: how much time you need

The deed signing deadline is the maximum time the parties have to formalize the sale before a notary. If that deadline passes without a deed being signed, it may be considered the buyer's breach, resulting in the loss of the arras. 30-day deadlines are common in standard contracts but are dangerously short.

Getting a bank valuation and formal mortgage approval usually takes between 30 and 60 days under normal conditions, and longer if there are complications. A 60-90 day period is reasonable to give the bank time without pressing the seller. If your contract sets 30 days or less, negotiate to extend it before signing — our tool will automatically flag this as high risk.