Reservation agreement vs Contrato de Arras – don't confuse the two

Two documents that look similar — and protect you very differently

When buying a property in Tenerife, you will almost certainly come across two documents signed before the notarial deed: the reservation agreement (Spanish: documento de reserva) and the Contrato de Arras. Many buyers from abroad treat them as one and the same piece of paper — "I sign something, I pay something, the property waits for me".

That is a mistake that can cost anywhere from a few thousand to tens of thousands of euros. These two documents differ in purpose, amount, legal consequences and the moment of signing. Below we explain step by step what they are, when each is signed and what to watch out for.

The reservation agreement — taking the property off the market

The reservation agreement is the first, simplest document in the whole process. You usually sign it immediately after deciding to buy, often on the very same day, at the estate agency's office.

What it contains and how it works:

• Amount: typically 3,000 to 10,000 euros (more for higher-priced properties). The payment usually goes to the agency's or law firm's account, not directly to the seller.
• Purpose: the property is taken off the market — the seller undertakes not to show it to other buyers or negotiate with anyone else, usually for 2–4 weeks.
• Price: the agreement "freezes" the negotiated price. That matters in a market where attractive listings can disappear within days.
• What happens next: during the reservation period a lawyer checks the property's legal status — the Nota Simple, charges, community debts, licences.

If the legal review reveals problems (e.g. a mortgage larger than the price, unresolved legal status, unauthorised construction), a well-drafted reservation agreement means you get your payment back in full. That is exactly why it matters who prepares this agreement — at our agency we make sure the refund clause is unambiguous.

Contrato de Arras — the real deposit, with real consequences

The Contrato de Arras (full name: contrato de arras penitenciales) is a deposit contract — a far more serious document, expressly governed by the Spanish civil code (art. 1454 Código Civil). You sign it after the legal review comes back clean, usually 2–4 weeks after the reservation.

The key rules:

• Amount: as a standard, 10% of the property price (including the earlier reservation payment). For an apartment costing 300,000 euros, that is 30,000 euros.
• Deadline: the contract sets the date for signing the notarial deed — most often 30–90 days (time for the mortgage, transfers, the NIE number).
• If the buyer pulls out: they lose the entire deposit.
• If the seller pulls out: they must return double the deposit to the buyer (with 30,000 euros paid — they hand back 60,000 euros).

It is precisely this symmetrical penalty that makes the Contrato de Arras so effective. Once it is signed, both parties have a real, financial reason to see the deal through.

The key differences at a glance

	Reservation agreement	Contrato de Arras
When	immediately after the decision	after the legal review
Amount	3,000–10,000 €	~10% of the price
Buyer pulls out	refund or loss of a small amount (depending on the terms)	loss of the entire deposit
Seller pulls out	refund of the payment	return of double the deposit
Legal basis	civil agreement between the parties	art. 1454 of the Spanish civil code

What to watch out for in practice? 4 tips from our transactions

1. Never sign the Arras before the legal review. It happens that the seller (or their agent) pushes for a "quick arras", skipping the reservation stage. Without checking the Nota Simple, you are risking 10% of the price.
2. Check how your payment is described. The word "señal" is often used loosely and imprecisely. The document should state clearly whether the payment is refundable and in which situations — and, in the case of a deposit, that it concerns arras penitenciales.
3. Arrange your financing before you sign the Arras. If the bank turns down your mortgage after you have signed the deposit contract, as a rule you lose the deposit. A conditional clause making the purchase dependent on financing being granted can be negotiated — but it must be written in expressly.
4. Keep an eye on the notarial deed deadline. Missing the date set in the Arras without an addendum formally amounts to a breach of contract. If you are waiting for a NIE number or an international transfer, it is better to build in a safe, longer deadline from the start.

How does it work with us?

At Twoja Teneryfa Nieruchomości we handle both stages in your language and in cooperation with a trusted lawyer: we prepare the reservation agreement with a full-refund clause, we order and translate the Nota Simple, and you only sign the Contrato de Arras once the property is 100% legally clean. If you cannot be in Tenerife, we can carry out the entire process — including the notarial deed — through a notarial power of attorney.

Planning a purchase and want to get through the formalities safely? Get in touch — we will advise you free of charge before you sign anything.