Purchase Process & Contracts
*How does buying property in Mallorca work? From the reservation to the notarial deed — and why the contract type for the deposit can decide thousands of euros.*
Process in brief: Reservation → private purchase contract with deposit (arras) → due diligence → notarisation (escritura pública) + final payment → registration in the land registry. In Spain, ownership only passes upon delivery (traditio) + title — not already with the private contract.
Contrato de reserva (reservation contract)#
What it is: A reservation agreement that takes a property off the market for the buyer against a small deposit (often €3,000–10,000).
- In practice: Usually arranged through the agent; typically binding only for a few weeks, until the
contrato de arras or directly the escritura follows. Clarify whether the reservation sum is forfeited on withdrawal or credited/refunded.
- Relevance: Even at this stage, conditions (freedom from encumbrances, valid
cédula, possibly
financing, possibly a Military Permit) should be recorded as prerequisites.
Contrato de arras (deposit contract) — the three types#
The private preliminary purchase contract with a deposit is standard in Mallorca. The type is decisive, because the legal consequences of withdrawal are completely different. Legal anchor: Art. 1454 Código Civil (for the arras penitenciales).
Arras penitenciales (forfeit money / genuine right of withdrawal) — Art. 1454 CC#
- Effect: Both sides may withdraw from the contract. **If the buyer withdraws, he forfeits
the deposit; if the seller withdraws, he must repay it twofold.**
- A deposit of 5–10 % of the purchase price is customary.
Arras confirmatorias (confirmatory / part payment)#
- Effect: The deposit serves as part payment and as proof of contract. No right of withdrawal; in case of
breach of contract, the other party can demand performance or damages (Art. 1124 CC).
Arras penales (penalty deposit)#
- Effect: Liquidated damages / contractual penalty (Art. 1152–1153 CC); the contract
in principle remains performable/enforceable.
⚖️ Case law: In case of doubt, *confirmatorias*#
🟡 established / ✅ case reference cited — STS 583/2018 of 17.10.2018 (Tribunal Supremo, Sala 1ª, rec. 1533/2016; CENDOJ identifier ROJ STS 3513/2018): The mere mention of Art. 1454 CC is not sufficient to assume arras penitenciales. The intention to allow withdrawal must be agreed clearly and unambiguously — otherwise the arras are deemed *confirmatorias* (full contractual binding).
- STS 270/2025 of 19.02.2025 (ECLI:ES:TS:2025:726) ✅: confirms the priority of the contractual wording
and the restrictive interpretation.
- 🟡 STS 538/2026 of 9.04.2026 (Sala 1ª): The developer/seller too may withdraw in case of
arras penitenciales (max. compensation = double the deposit); a clearly/symmetrically worded clause is not abusive. To be distinguished from STS 178/2026 (9.02.2026: defaulting seller → implied withdrawal, double repayment to the buyer). 🔴 ECLI/reporting judge still to be verified in CENDOJ.
Buyer takeaway: Name the type explicitly. Anyone wanting a right of withdrawal must clearly spell out Art. 1454 CC and the intention to withdraw together with its consequences. Where possible, place the deposit in escrow with the notary, not directly with the seller. Include grounds for withdrawal (freedom from encumbrances, cédula, financing, Military Permit) as conditions subsequent.
Contrato de opción de compra (option contract)#
What it is: A purchase option — the seller grants the buyer, against an option premium, the right to acquire the property within a set period on fixed terms. The premium is usually credited against the price upon exercise, otherwise it is forfeited. Common with new-build/projects or when the buyer still needs a permit (e.g. a Military Permit) or financing.
Contrato privado de compraventa (private purchase contract)#
What it is: A private written purchase contract with all terms (price, payment, handover, condition, inventory). Legally binding, but not yet effective in the land registry — that requires the notarial escritura.
Escritura pública de compraventa (notarial deed of sale)#
What it is: The public deed of sale notarised by the notary. With signature + payment + handover of the keys, ownership generally passes (title + traditio, Art. 609 & 1462 CC). Only the escritura enables registration in the land registry (Registro de la Propiedad) — the decisive step for the buyer's good-faith protection.
- At the appointment: Payment is usually made by bank-confirmed cheque (
cheque bancario nominativo)
or in advance by bank transfer; the notary documents the means of payment (mandatory). If the seller is a non-resident, the buyer withholds 3 % retención (→ Ch. 06). The tax (ITP or IVA+AJD) must then be paid on time (→ Ch. 04).
- Purchase by power of attorney (
poder notarial) is possible if you cannot travel (→ Ch. 02).
Transfer of ownership & registration#
1. escritura before the notary (ownership passes). 2. Payment of tax (ITP/AJD or IVA) within 30 working days (Modelo 600 at ATIB, → Ch. 04). 3. Registration in the Registro de la Propiedad (via a gestoría) — protects against double sale and third parties. 4. Re-registration in the Catastro, change of utility account holder, transfer of IBI (→ Ch. 05).
In depth#
Timeline (checklist)#
Total duration typically 2–4 months (luxury segment often 6–12 weeks from acceptance). Sequence: Apply for NIE (1–4 wks) → bank account → offer/acceptance → reserva → due diligence (nota simple, urban-planning status, IBI, cédula, energy certificate, community debts; 1–3 wks) → arras/opción (usually 10 %) → period until escritura (1–3 months) → notarisation + final payment + keys → tax (30 working days) → land registry entry.
Financing condition (condición suspensiva de financiación) — important edge case ✅#
Without a precise financing clause, the buyer forfeits the arras if the bank declines — a mere refusal does not automatically release him. The clause must specify the amount, maximum interest rate, term, deadline and proof obligation (a formal bank rejection).
Drafting-error warning: A right of withdrawal and compulsion to perform at the same time are contradictory; boilerplate phrases such as "en concepto de señal y arras" without specifying the type/mentioning Art. 1454 are risky.
señal / reserva / depósito — distinctions#
señal = the sum of money, arras = the legal institution governed by the Código Civil (Art. 1454, higher legal certainty). contrato de reserva = not regulated by statute, freely drafted, usually through the agent (1–5 %). 🔴 depósito as an independent figure depends on the contract.
Option contract — tax & land registry#
The opción de compra can be registered in the land registry under Art. 14 Reglamento Hipotecario (🟡 classically a maximum period of 4 years). The prima is subject to ITP (TPO) with a private seller and to IVA with a business seller — assessed at a minimum of 5 % of the purchase price; upon exercise, ITP again on the full purchase price.
Notary appointment — procedure#
Verification of identity/power of attorney → the notary checks encumbrances (current nota simple) → reading aloud of the escritura → manifestaciones (among others, freedom from debts to the community/IBI, inventory list) → final payment (cheque/transfer, documented) → signature/authorisation → handover of keys (toma de posesión). Present: the notary, the parties (or their attorneys), possibly a bank representative, a lawyer/interpreter.
Special cases#
- Purchase from a developer (
sobre plano): Down payments must be secured by anaval/insurance
(Disp. adic. 1ª Ley 38/1999 as amended by Ley 20/2015) — → Ch. 10.
- Existing mortgage:
subrogación(the buyer takes it over, subject to a creditworthiness check) vs.cancelación
(redemption; the charge must be removed from the registry — common practice: retain a partial amount).
- Tenanted property: The lease continues (
subrogación); the tenant has rights oftanteo/retracto
(30 calendar days, Art. 25 LAU) — → Ch. 13.
Matrimonial property regime of foreign couples ✅#
The decisive instrument is EU Regulation 2016/1103 (from 29.01.2019): a choice of law (habitual residence or nationality) is possible; without a choice, a cascade of connecting factors applies. However: For registration in the land registry, the lex rei sitae (Spanish law) applies — the matrimonial property regime (gananciales vs. separación de bienes) must be declared/proven at the notary appointment.
Hidden defects (vicios ocultos) & aliud pro alio ✅#
saneamiento por vicios ocultos(Art. 1484 CC): theacción redhibitoria(rescission) or
quanti minoris (price reduction, Art. 1486). The period is only 6 months from handover (caducidad, Art. 1490 CC) — applied ex officio, with no suspension.
aliud pro alio(an entirely unfit/different thing): general contract law (Art. 1101/1124),
limitation period of 5 years (Art. 1964) — far more favourable for the buyer.
- Leading judgment: STS 635/2014 of 19.11.2014 ✅ (rec. 467/2013) — the distinction/compatibility of the
remedies. 🔎 The "STS 35/2014" circulating in blogs is a typo for 635/2014.
❓ FAQ (for featured snippets)#
Is the deposit lost when buying a house in Mallorca if I withdraw? With arras penitenciales (Art. 1454 CC) yes — the buyer forfeits the deposit, and the seller would have to pay double if he withdraws. With arras confirmatorias the contract remains enforceable. Be sure to clarify the type in the contract.
When does the property in Mallorca legally belong to me? With the notarial escritura pública (title) plus handover — and securely only with registration in the land registry.
Sources (selection)#
- Código Civil Art. 609, 1124, 1152–1153, 1454, 1462 (BOE-A-1889-4763)
- STS 583/2018 (ROJ STS 3513/2018) · STS 270/2025 (ECLI:ES:TS:2025:726) — → Ch. 23
- Mallorca Magazin: "The basics of the Contrato de Arras" · Notaría/Idealista on means of payment