contract deposit agreement law arras

The deposit agreement or reserve when buying an apartment is a very important document, despite the fact that it contains only the preconditions of the future transaction. However, it is in it that the parties record the amount of the first payment, the conditions under which a transaction can take place, and the main nuances of the future sale and purchase agreement.

What is a deposit agreement?

A deposit or reserve agreement can be defined as a preliminary agreement for the sale of a house. This is a private contract, which is signed exclusively by owners and buyers of movable or immovable property. In essence, this is a future sale and purchase agreement. It is made in writing and serves as the main contract security.

Document content

The agreement on the reserve must contain in detail all the points agreed between the buyer and the seller. Among this we highlight:

- Personal information of both the buyer and the seller, including the relevant identity documents.

- A detailed description of the house, including data such as the location of the house, its address, area, as well as an indication whether there is a storage room or garage.
- You must also specify the amount of money, the final price, the maximum time for completion of the sale before the notary, in addition to possible housing costs and distribution of expenses according to the concept of purchase (notary fees, registration, etc.).

How are payments made in the contract?

As a rule, two payments are established:

- The first payment is made at the time of signing the contract.

- The second payment, when it is signed before a notary, through a check or bank transfer. This payment is usually made within a maximum of two months, twice as much as is required to obtain a mortgage loan (one month), as well as the cost of the sale (registration, notary, etc.).

What should be the amount of reserve?

The amount for signing the contract is not determined by law, so it will be agreed between both parties. In most cases, the amount is 5% - 15% of the value of the object.

It is necessary to clarify that the amount specified in the deposit agreement at home will be deducted from the final price of the purchase agreement. In case the house is new, this amount should have 10% VAT.

Consequences of the breach of contract

Let's see what happens when agreements are not respected in the deposit agreement.

In these cases, the law establishes that when the sale is not carried out within the period specified in the contract, both parties are automatically exempted from any obligation, and that the party responsible for the delay loses the amount of the paid in sum without clarifying the circumstances that hindered the contract.

In accordance with article 1454 of the Spanish Civil Code, the law provides for a number of penalties for those who do not fulfill the deposit agreement:

- If a violation occurred on the part of the buyer, the owner has the right to keep the amount transferred to him;
- If a violation occurred on the part of the seller, he is obliged to pay the buyer an amount twice the deposit (counted as compensation);

Types of deposit agreements in Spain

There are three types of such contracts:

- arras confirmatorias;
- arras penitenciales;
- arras penales.

There is a significant difference between them, so the type of contract must be clearly defined. For example, returning the double amount paid to the seller to the buyer in case of violation of the contract by the seller provides only arras penitenciales. A single return of the reserve provides for arras confirmatorias and the ability to force the seller to enter into a transaction in a judicial proceeding gives arras penales.

What happens if you do not want the object but have already paid for the reserve?

The only way to restore the part of the reserve that you paid when signing the deposit agreement is to prove to the seller that there was some kind of “hidden defect”. Hidden defects are serious and very important defects in property that arose without the knowledge of the buyer and were not visible until the signing of the reserve agreement. The maximum term for submission is 6 months from the date of signing the deposit agreement. Subsequently, there can be no talk of a hidden defect.

Services that can provide for your confidence

We are ready to provide you with a comprehensive service in matters of concluding an agreement on the deposit. Providing qualified advice, checking objects and collecting the necessary documents to confirm legal cleanliness, help to conclude a competent agreement that will protect your rights and interests, monitor the process of contract performance and much more.
With us reliably, easily and quickly! To start cooperation, please contact us by phone 636 12 60 12

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