Editorial transparency and use of artificial intelligence
This article forms part of the CostaLuz Lawyers blog and is published for general informational and educational purposes only. It was prepared with the assistance of artificial intelligence tools and, before publication, was substantively reviewed and editorially approved by Maria de Castro, a Spanish-qualified lawyer registered with the Cádiz Bar Association under number 2745, founder of CostaLuz Lawyers and the person responsible for the editorial review of the published content.
This article does not constitute legal, tax, immigration, employment, estate-planning or investment advice and does not replace an individual assessment and the professional work of the appropriate CostaLuz Lawyers specialist. No action or omission should be based solely on this information.
You found the property, agreed the price, and paid a deposit to take it off the market. Then the message arrives: the seller wants out. Usually it is because a higher offer has appeared, sometimes it is cold feet, but the effect is the same — the person you have a signed contract with is trying to walk away from it. In Spain that is not the end of the matter, and it is very often not the seller’s decision to make for free.
We have acted for buyers on exactly this since 2006, and the reaction that costs people money is the instinctive one: accepting a quiet refund of the deposit and moving on. Depending on what you signed, you may be entitled to considerably more than that — or to the property itself.
The short answer
What the seller owes depends on the kind of deposit your contract set. With arras penitenciales, the most common kind, the Civil Code (Article 1454) requires a seller who backs out to return double what you paid. With other kinds of deposit you may be able to make them complete the sale or claim damages. Before you reply to the seller, have the contract read.
What did I actually sign?
Spanish practice uses three kinds of deposit, and they are not interchangeable. Arras penitenciales are the most common in a private purchase: they let either side pull out at a set price — the buyer by forfeiting the deposit, the seller by returning it doubled. Arras confirmatorias simply confirm the sale; they do not buy anyone a right to walk away, so a seller who breaks the deal can be pushed to complete or made to pay. Arras penales fix an agreed penalty for breach. The label the contract uses — and, more importantly, the way it is worded — decides which set of rules applies to you.
What happens if the arras were penitenciales?
This is the situation most buyers are in, and the rule is clean. Article 1454 of the Civil Code says that where arras have been given, the contract may be ended by the buyer losing them or by the seller returning them doubled. So a seller who pulls out does not simply hand your money back; they owe you twice what you paid. Sellers, and sometimes their agents, routinely get this wrong — which is precisely why you should not accept a plain refund.
Can I make them go through with the sale?
Possibly, and this is where the type of deposit matters most. If your arras were confirmatorias, the seller never bought a right to walk away. In that case you may be able to demand specific performance — a court order to complete the sale — or claim damages for the breach, rather than settle for the deposit. Whether forcing a reluctant seller to complete is the right goal is a judgement call, but it is a route that exists, and it is worth knowing you have it before you decide to take the money instead.
What to do now, in order
- Do not reply to the seller with a decision yet — not even to accept a refund.
- Send us the signed arras or reservation contract and any private purchase contract.
- Let us confirm which type of deposit you signed and what the seller therefore owes.
- Then respond from a position that reflects your actual rights, not the seller’s version of them.
Your leverage is highest at the very start, before the seller has resold or dug in. The document that decides everything is already in your hands; it just needs reading by someone who acts for you.
How we help
We are independent Spanish property lawyers acting for the buyer. We read the contract you signed, tell you plainly whether you are owed a doubled deposit, damages, or the sale itself, and then handle the response to the seller or their lawyer. In many cases a correctly worded letter setting out the real position is enough to change the outcome without a court ever being involved.
If a seller is trying to pull out, talk to us before you answer them. Call +34 919 499 342 (English or Spanish) or email marialuisa@costaluzlawyers.es, and we will tell you where you stand today.
Not sure whether what you signed is actually an arras contract, or just a non-binding reservation? See our comparison of reserva contracts vs arras contracts in Spain.
Reviewed by Maria Luisa de Castro, lawyer of the Ilustre Colegio de Abogados de Cadiz (No 2745), advising international buyers of Spanish property since 2006. This article is general information about Spanish property law, not advice on your specific contract, and the remedy that applies depends on the wording of your arras.
What if the seller has not signed anything yet? (gazumping)
Everything above assumes you have signed something. If you have not — the offer was accepted, the lawyers were instructed, and then a higher offer appeared — your position is different, and worse. This is what British buyers call gazumping.
Two corrections to what buyers are usually told, because both cut against the common advice.
A verbal agreement is not worthless. Article 1278 of the Civil Code provides that contracts are binding whatever the form in which they were made, so long as the essential conditions for their validity are present. Article 1279 goes further: once consent and those requisites exist, either party can compel the other to put the contract into the required form. So a purely verbal agreement on price, property and terms can in principle be enforced, and Spanish law does not have the English rule that a land contract is unenforceable until it is in writing.
The obstacle is proof, not legal force. Establishing that both sides had agreed the essential terms, without a document, is genuinely difficult — but “difficult to prove” and “not binding” are different things, and buyers are routinely told the second when the first is true. If there is a paper trail — a written acceptance, an agreed draft, an instruction to the notary, a deposit already transferred — the position is worth taking advice on rather than abandoning.
Signing arras does not automatically stop a seller taking a higher offer. This is the more important correction, and it follows directly from the sections above. If what you signed is arras penitenciales under Article 1454, the seller is entitled to walk away by returning double the deposit. Where the higher offer exceeds that cost, a penitential arras contract does not deter gazumping at all — it prices it, and the buyer who thought the signature made them safe has in fact agreed the seller’s exit fee in advance.
What actually protects you is the character of the contract, not the fact of signing one. Arras confirmatorias, or a contract with an express right to require completion, put you in a position to demand performance rather than compensation. That is a drafting decision made before you sign, and it is the single point at which a buyer has real leverage over this risk.
In practice, then: the window in which you are most exposed is the one before any contract, and the way out of it is to shorten that window and to get the right contract at the end of it — not simply to get any contract signed quickly.
Frequently Asked Questions
If the seller pulls out, do I get my deposit back?
It depends on the type of deposit your contract set. With arras penitenciales — the most common kind — the Civil Code says a seller who walks away must return double what you paid, not simply give it back. With other kinds of deposit the remedy is different. The first thing we do is read your contract to see which type you actually signed.
What is the difference between the types of arras?
Spanish contracts use three. Arras penitenciales let either side walk away at a price — the buyer loses the deposit, the seller returns it doubled (Art. 1454 of the Civil Code). Arras confirmatorias simply confirm the deal and do not buy a right to walk away, so a seller who breaks it can be sued to complete or for damages. Arras penales set an agreed penalty. The wording of your contract decides which applies.
Can I force the seller to complete instead of taking the money?
Sometimes. If your deposit was confirmatoria rather than penitencial, the seller did not buy the right to walk away, and you may be able to demand specific performance — a court order to complete the sale — or claim damages for the breach. Whether that is worth pursuing depends on the contract and on what you want, which is exactly the advice we give before you react.
The seller says they can just return my deposit and walk away. Is that right?
Only if your arras were penitenciales, and even then the Civil Code requires them to return it doubled, not merely hand it back. Sellers frequently assume they can cancel by returning the deposit, and they are often wrong about the amount or about the type of deposit agreed. Do not accept a bare refund before your contract has been read.
How quickly do I need to act?
Quickly. Once a seller is looking for a way out — usually because a higher offer has appeared — your leverage is at its highest right at the start, before positions harden or the property is resold. The remedy you have depends on documents that need reading now, not after you have replied to the seller. Take advice before you agree to anything.
What do you need from me to advise on this?
The signed contract of arras or reservation, any private purchase contract, and a short account of what the seller has said. From those we can tell you which type of deposit you signed, what the seller owes if they walk, whether you can push to complete instead, and what to say back. That first read is usually enough to change the conversation.
Can a seller in Spain accept a higher offer after accepting mine?
Before anything is signed, in practice yes. Article 1278 of the Civil Code makes contracts binding whatever their form, so a verbal agreement is not legally worthless and Article 1279 allows either party to compel the other to formalise it. The obstacle is proving that both sides agreed the essential terms without a document. After signing, it depends on which type of arras you signed: penitential arras under Article 1454 let the seller withdraw by returning double the deposit.
Does signing an arras contract stop gazumping?
Not by itself. If the arras are penitential, the seller may lawfully withdraw by returning double the deposit, so where the higher offer exceeds that cost the contract prices the seller’s exit rather than preventing it. What protects you is the character of the contract: confirmatory arras, or an express right to require completion, put you in a position to demand the sale goes through. That is decided when the contract is drafted, not when it is signed.
Is a verbal property agreement binding in Spain?
Article 1278 of the Civil Code provides that contracts are binding whatever the form in which they are made, provided the essential conditions for validity are present, and Article 1279 allows either party to compel the other to put the contract into the required form. Spain has no rule making a land contract unenforceable simply because it is not in writing. The practical difficulty is evidential, so any written trail matters.
An arras dispute is one of the risks a careful pre-purchase process is designed to reduce — see our complete legal guide to property investment due diligence for the rest.
Cases like this are a direct consequence of a common myth — see why Spain has no cooling-off period for property purchases and what protects buyers instead.