Contract drafting "With security to Mallorca property"
Once the dream property has finally been found after a long search, security should be created for both sides - buyer and seller. The contrato de arras, the deposit contract, serves this purpose. The document is more than just a formality, as the contrato de arras obliges both parties to comply with the contract concluded.
The deposit contract in Spain comprises the agreed conditions relating to the purchase or sale of a property. These are recorded in writing. This means that both the buyer and the seller have an obligation, which is set out in the form of a deposit. If the buyer withdraws from the contract, he loses the amount he has deposited. If the seller withdraws, he must usually pay up to twice the amount of his deposit.
Payment contract only with delayed conclusion of purchase
In Spain and Mallorca, a contrato de arras only comes into question if the real estate contract is not signed immediately. If both parties have agreed on all the details of the contract, such as price, conditions and financing, and there is no reason not to sign it, there is no need to draw up a deposit contract.
On the other hand, there are factors that postpone or delay the signing of a contract. For example, it may be necessary to check ownership, obtain permits or pay off debts. Delays due to the pandemic measures can also lead to a postponement of the final conclusion of the contract. In these cases, a contrato de arras should be concluded.
Model document or individual contract?
There are a large number of sample contracts available on the Internet under the corresponding search term. It is generally advisable to have an advance payment contract in Spain drawn up by a lawyer. They know the general conditions and can tailor the content precisely to the individual property.
The contrato de arras firstly contains the personal data of the buyer and seller. When it is issued, it is already ensured that the necessary documents relating to the property are available. The documents relating to taxes, the Money Laundering Act and foreign investments are also included and signed.
Of course, the deposit agreement also contains information about the property itself, its registration, identification, use, restrictions, etc.. The deadline for signing the actual contract, i.e. the deed of sale, is important. In addition, there are details about the division of expenses between the two parties. Other points of interest can be included in the contrato de arras as desired.
Signing before a notary
The signing of a contrato de arras should take place before a notary. The notary will inform both parties about the general conditions and explain them accordingly. This is because a breach of contract can have serious financial consequences for one of the contracting parties. Above all, it is worth taking a look at the deadlines to be observed.
Marc Fischer
