Can a Buyer Claim Double the Deposit in Spain? |

Understanding the Legal Role of Reservation Contracts in Spanish Property Transactions

In Spanish real estate transactions, one of the most crucial early steps is the signing of a reservation contract. This document is usually signed after the buyer has chosen a property and reached an agreement on price and basic conditions with the seller or their agent. At this point, the buyer is generally required to formalize their intention to buy by paying a deposit, also known as a “signal” or “reserve”.

This stage is often misunderstood by foreign buyers, especially when it comes to the consequences of withdrawal or breach by either party. A common legal question arises: can the buyer claim double the deposit if the seller breaches the agreement?

What Is a Reservation Contract in Spain?

A reservation contract is a private agreement that secures the buyer’s right to purchase the property under agreed conditions, typically for a limited time. It also serves to take the property off the market during that period.

The deposit paid under this contract provides proof of the buyer’s serious intent and binds both parties to the terms agreed. If either party fails to comply, specific legal consequences may follow, depending on how the contract has been drafted.

Legal Consequences: Does the Seller Have to Return Double the Deposit?

The answer depends on four key factors, including how the contract was drafted, whether it includes a penalty clause, whether the seller signed the contract or authorized it, and whether the deposit was received by the seller or their legal representative.

1. Does the Contract Include a Penalty Clause?

Under Article 1454 of the Spanish Civil Code, if a deposit has been paid in the context of a sale, the agreement may be cancelled with the following consequences:

The buyer loses the deposit if they withdraw.
The seller returns double the deposit if they withdraw.

However, this only applies if the reservation contract expressly includes this clause. Many contracts do not mention this obligation clearly, meaning the general principle may not automatically apply.

If the contract does not state that the seller must return double the deposit upon breach, the buyer cannot enforce that penalty—even if a deposit was paid.

2. Has the Seller or Their Representative Received the Deposit?

For the buyer to claim any refund—or double the amount—the seller must have received the deposit, either directly or through a legally authorized representative.

If the deposit was simply held by the real estate agent as a precaution, and the seller never accepted it, the buyer may not be able to enforce the double repayment clause, even if one was included.

3. Was the Contract Signed by the Seller?

For the reservation contract to be legally binding, it must be signed by both parties. If the seller did not sign it personally, the buyer may be left without effective legal recourse.

Even if the seller verbally agreed, only a written and signed contract will typically support a claim for double the deposit.

If the seller signed a document that includes the penalty clause, they are bound by that condition, even if they never personally received the deposit (as long as their representative did).

4. Was the Real Estate Agent Legally Authorized?

In Spain, real estate agents often act on behalf of property owners. However, receiving a deposit is not the same as being authorized to sign a contract on the owner’s behalf.

A notarial Power of Attorney is required for an agent or lawyer to validly bind the owner. If the reservation contract was signed only by the agent without such authorization, it may not be enforceable against the seller.

This means that even if the buyer signed the contract and paid a deposit to the agent, they cannot automatically claim double the deposit if the owner had not provided explicit legal authority to the agent.

Practical Recommendations for Buyers

Ensure that the reservation contract is drafted or reviewed by a lawyer before signing.
Include a clear clause stating that the deposit will be returned in double if the seller breaches the agreement.
Confirm that the seller signs the contract directly, or that their representative holds a valid notarized power of attorney.
Make sure the contract specifies who holds the deposit, under what conditions it is returned, and the timelines involved.

Practical Recommendations for Sellers

Do not sign a reservation contract without understanding the legal implications, especially regarding cancellation penalties.
If using a real estate agent, be clear about whether they are authorized to sign on your behalf.
Only accept deposits or authorize agents to hold them if you are ready to proceed with the sale under the stated terms.

Conclusion: Protecting Your Interests in a Reservation Contract

The possibility of claiming double the deposit under Spanish law exists—but only under specific conditions. The reservation contract must include a penalty clause, be signed by both parties (or an authorized representative), and the deposit must be properly delivered.

Buyers should be vigilant and seek professional advice before signing. Sellers should proceed with caution and ensure they are fully informed of their obligations.