You’ve found the property you want. The location is right, the build quality convinces you, the price fits your budget. Now comes the moment to move from intention to action. And that step has a specific name in the Spanish property-buying process: the reservation. A mechanism that formalises your interest and, if handled properly, protects both buyer and seller.
But a reservation isn’t simply saying “I’ll take it”. It involves commitments, deadlines and conditions that are worth understanding before signing any document or transferring any funds. This article explains how the process works step by step, what your rights are and what precautions to take.
The reservation: your first formal commitment
The reservation is the first formal step in the buying process. It’s an agreement whereby the developer takes the property off the market for a set period in exchange for a financial deposit. This deposit typically ranges from 3,000 to 10,000 euros depending on the developer and the property price.
A reservation is not binding to the same degree as a deposit contract (arras). Generally, the buyer can recover the deposit if they ultimately decide not to proceed within the agreed timeframe, although the exact conditions vary depending on the document signed. That’s why it’s essential to read every clause before signing.
The reservation period usually lasts between two and four weeks. During that time, the buyer can carry out the necessary checks: consulting a lawyer, confirming financing and reviewing the development’s documentation. It’s a protection period that gives you room to decide with complete information without losing the property.
The deposit contract (arras): the binding commitment
Once the reservation period is over and your buying decision confirmed, you sign the deposit contract (contrato de arras). This is the truly binding document that commits both parties. Its legal weight is far greater than the reservation, and its financial consequences are significant.
The most common type in Spain is the penalty deposit (arras penitenciales), governed by Article 1454 of the Civil Code. The mechanism is straightforward: if the buyer withdraws, the deposit is forfeited; if the seller withdraws, double the amount must be returned. This symmetry protects both parties equally.
The deposit typically amounts to between 5% and 10% of the sale price. It’s a substantial sum that reflects the seriousness of the commitment. For new-build properties, this percentage is added to the initial reservation, so the total paid up to this point may represent between 10% and 15% of the price.
Essential advice: Never sign a deposit contract without your lawyer having reviewed it first. The document must include full identification of both parties, an exact description of the property, the total price, the payment schedule, the deadline for the public deed and penalties for non-compliance. Any omission can create serious problems.
The payment schedule for new-build properties
For new-build homes, payment is not made in one go. It’s spread over the construction process following a calendar linked to construction milestones. A typical structure might look like this:
The initial reservation accounts for between 1% and 3%. The deposit contract adds between 5% and 10%. During construction, interim payments amounting to a further 15% to 25% are made, linked to the completion of structure, external walls and installations. The remainder — usually between 60% and 70% — is paid at the signing of the public deed and key handover.
This calendar protects the buyer because each payment corresponds to verifiable construction progress. All amounts paid during construction must be guaranteed by a bank guarantee or surety insurance in accordance with current Spanish legislation.
Timelines you need to know
The process from reservation to key handover has timelines worth being clear about. The reservation is formalised in one or two days. The deposit contract is usually signed between two and four weeks after the reservation, once legal verification is complete. The public deed is signed when the property is finished and has its first-occupancy licence.
For completed properties, the gap between deposit and deed can be one to three months. For off-plan or under-construction properties, the timeline depends on the stage of construction and can stretch to between 6 and 24 months. This deadline must be clearly specified in the contract, including the consequences of a delay attributable to the developer.
Mortgage timelines should also be factored in. If you need a mortgage, start the application in parallel with the reservation so that approval is ready before signing the deposit contract. A mortgage rejection after signing the deposit can mean losing the deposit if the contract doesn’t include a financing contingency clause.
What the contract should include — and what you shouldn’t accept
A good purchase contract must be transparent, balanced and complete. Essential elements include: identification of the parties, a detailed description of the property referencing floor plans and the specification document, the total price and payment schedule, the delivery deadline with a reasonable margin, penalties for non-compliance by both parties, and reference to the guarantee on amounts paid on account.
Don’t accept contracts that fail to include the specification document as a binding annex. Don’t accept clauses allowing the developer to unilaterally change specifications without your consent. Don’t accept asymmetric penalties that disadvantage you as the buyer. And don’t accept delivery deadlines with no consequences for the developer in case of delay.
Your lawyer is the one who must validate every one of these clauses. A well-drafted contract is your best protection throughout the buying process. Investing in legal advice at this stage is the smartest decision you can make.
Frequently asked questions about reserving property in Mallorca
Can I lose my reservation deposit if I don’t go ahead with the purchase?
It depends on the conditions of the reservation document. In many cases, the reservation is refundable if you decide not to proceed within the agreed timeframe. However, each document has its own conditions and it’s essential to read them carefully before signing. Your lawyer should always review them.
What’s the difference between a reservation and a deposit contract?
A reservation is a more flexible initial commitment that takes the property off the market temporarily. A deposit contract (arras) is a binding commitment with clear financial consequences for both parties. Reservations usually involve smaller amounts and more favourable refund conditions for the buyer.
Can I negotiate the terms of the deposit contract?
Yes. The deposit contract is a negotiable document between the parties. You can negotiate the deposit percentage, the timelines, the delivery conditions and the penalties. A professional developer will be open to reasonable adjustments that balance both parties’ interests.
What happens if the developer doesn’t deliver on time?
If the contract includes a delivery date and penalties for delay, you can claim the agreed compensation. If the delay is significant and there’s no prospect of delivery, you can terminate the contract and demand the return of all amounts paid plus the corresponding compensation. Always keep all documentation and act with legal advice.