Buying Property on the Costa Blanca: Reservation Agreements Explained

25 Aug

After years of dreaming about a home in the Spanish sun, you have finally found the right property on the Costa Blanca. Perhaps it is a peaceful apartment near the sea, a townhouse close to family, or a place to enjoy your retirement.

Then your offer is accepted — and you are asked to sign a reservation agreement, or contrato de reserva, and pay a deposit.

This is an important moment. The agreement usually takes the property off the market for a limited period while your lawyer carries out the necessary checks. But what exactly are you signing? How much should you pay? Can you get the deposit back? And what should happen before you commit to buying?

Here is what European retirees need to know about reserving a property on the Costa Blanca — and how working with an experienced local agency such as E-Style Spain can make this important step clearer and more manageable.

Your offer is accepted: what happens next?

Once you and the seller have agreed on a price, the property will normally be taken off the market through a reservation agreement.

The purpose is relatively simple: you pay a reservation deposit and, in return, the seller agrees to stop marketing the property for an agreed period. This gives your lawyer time to carry out the necessary checks before you make a larger financial commitment.

The deposit and reservation period vary according to the property and the agreement. A reservation period may be as short as a few weeks, giving your lawyer time to carry out the initial checks before you make a larger commitment. The Spanish Land Registry in collaboration with RICS and AIPP describes a typical 15–30-day reservation period.

Importantly, there is no single standard reservation agreement that applies to every property. The terms of the document matter, particularly when it comes to the circumstances in which your deposit can be refunded.

What is a reservation agreement?

A reservation agreement is a preliminary agreement between the buyer and seller. It confirms that both parties intend to proceed with the purchase and sets out the conditions under which the property will be reserved.

For the buyer, its main purpose is to secure the property while legal due diligence takes place.

The agreement should clearly establish things such as:

The agreed purchase price
The property being reserved
The amount of the reservation deposit
How long the reservation lasts
Who holds the deposit
What happens if the purchase does not proceed
The circumstances in which the deposit is refundable

Because the financial consequences depend on the wording, it is sensible to have the agreement reviewed by an independent Spanish property lawyer before signing or transferring money. The General Council of the Notariat similarly advises buyers to seek professional advice before signing documents or handing over money.

What should happen during the reservation period?

The reservation period is not simply a waiting period. It is when the buyer's legal representative can begin checking that the property is suitable for purchase.

Depending on the property, these checks can include:

Confirming the legal owner through the Land Registry
Checking for mortgages, charges or other debts
Checking planning and building issues
Confirming the property's cadastral information
Checking community fees and local property taxes
Reviewing relevant property documentation

The exact checks depend on the property and its circumstances. The Spanish Land Registry advises buyers to establish who owns the property and whether there are registered mortgages, attachments or other charges before purchasing.

This is particularly important in Spain because issues such as extensions, alterations or other building works may require further investigation.

Reservation agreement vs. ***arras*: what's the difference?**

This is one of the most common points of confusion for European buyers.

A reservation agreement is generally the initial step. It takes the property off the market for a limited period while the buyer's due diligence is carried out.

The contrato de arras is a more substantial private purchase agreement that normally follows once the buyer is ready to proceed. It sets out the terms of the sale and the consequences if either party fails to complete.

Don't assume that every arras contract works in exactly the same way. The Spanish Notarial Association explains that arras are not compulsory, but once signed they are a valid contract. They can be confirmatory or, if specifically agreed, penitential. In the latter case, the buyer can lose the deposit when withdrawing, while the seller may have to return twice the agreed amount.

For this reason, the reservation stage is an important opportunity to have your legal position checked before moving on to a much more significant commitment.

What if something goes wrong?

For retirees moving to Spain, this is often the question that matters most: “Will I get my reservation deposit back?”

There is no universal answer. It depends on the terms of your reservation agreement and the reason why the purchase does not proceed.

For example, the agreement may specify what happens if the lawyer discovers a significant legal problem with the property. It may also set out what happens if the buyer simply decides not to continue or if the seller changes their mind.

This is why you should never rely on verbal assurances about whether a reservation deposit is refundable. The protection should be clearly stated in the agreement itself.

If your lawyer discovers an issue during due diligence, they can advise you on whether it can be resolved and whether you should proceed with the purchase.

From reservation to completion

If the legal checks are satisfactory and both parties want to continue, the next stage is normally the private purchase agreement, often an arras contract.

The transaction then progresses towards completion, when the final public deed (escritura pública) is signed before a Spanish notary and the remaining purchase price is paid.

The exact timeline varies according to the property, your circumstances and whether financing is required. If you are planning to make the Costa Blanca your permanent home, it is also worth allowing enough time to organise practical matters such as your NIE, banking and finances rather than rushing the purchase.

A few things to remember

If you are buying a retirement or holiday home on the Costa Blanca, the reservation agreement is an important step — but it does not have to be complicated.

The key points are:

1. Understand what you are signing.

Don't assume a reservation agreement is simply a formality.

2. Know what happens to your deposit.

Make sure the agreement clearly explains when it is refundable and when it may be forfeited.

3. Get legal advice early.

Ideally, have an independent property lawyer review the agreement before you sign and pay.

4. Understand the difference between reservation and arras.

They are not necessarily the same thing, and the financial consequences can be very different.

Most importantly, don't let the excitement of finding your ideal home in the Spanish sun push you into signing something you don't fully understand. Take a little time, get independent advice and make sure you know exactly what happens to your money if the purchase does not proceed.