The Purchase Pre-Agreement

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The purchase pre-agreement is a private legal document in which a buyer reserves the right to acquire a property with the payment of a monetary amount, and which is celebrated under the protection of article 1454 of the Spanish Civil Code.


Specifically, it is a written pre-contract that establishes the obligation to subsequently close a contract for the purchase of a property. To be considered a valid and complete contract it must contain the following aspects:

  1. Personal information of the buyer and the seller, identifying their names, identification documents and address.
  2. Description of the property (address, surface, furniture that incorporates, etc.).
  3. Final price for the purchase of the property.
  4. Money amount paid at the signing, expressly stating that this amount is paid because of the sale of the property and, at the time of signing the deed of purchase, it will be deducted from the final price of the property.
  5. Deadline to formalize the sale.
  6. Possible liens and encumbrances that affects the property.
  7. Distribution of the costs of the sale.

The amount

About the amount that must be satisfied in the purchase pre-agreement, the Spanish law does not fix any specific sum so it must be freely agreed by the parties (it is generally set between 10-20% of the final property’s price). However, it is advisable to set one amount or another depending on the interest that the buyer has in that property because, in case the seller backs out of the sale, according to the provision established on article 1454 of the Spanish Civil Code, he must return it duplicated and if the buyer back out, he will lose the amount paid for this concept.

In any case, the amount must be paid in a nominative form, that is, by check or transfer indicating the name of the recipient and the concept for which the amount was paid.

The Purchase Pre-Agreement’s Signature

The purchase pre-agreement will be signed between the owner of the property and the future buyer, and in case that it is acquired by a couple, attention must be paid to the existence of marriage between both, as well as to the matrimonial economic regime.

The purchase pre-agreement is the previous step to the effective sale of a property, and therefore, the deal is formalized with this contract. However, there may be alterations that can result in the non-acquisition of the property and in this point, the purchase pre-agreement is of great importance as it establishes the legal consequences of this new situation.

In case the seller decides not to continue with the deal and refuses to make the sale, article 1454 of the Spanish Civil Code sets a penalization that consists of giving back twice the amount that the buyer paid for the purchase pre-agreement. However, if the buyer decides to refuse to complete the purchase, he will lose all the amount paid in the purchase pre-agreement, without any other penalty.

If everything goes correctly the amount that has been satisfied with the purchase pre-agreement will be deducted from the final payment, so this amount of money will be taken from the final price.

The hidden defects

An aspect of great interest related with this type of agreements are the hidden defects on the property, as if this happens, the buyer could get back the total amount paid.

Nevertheless, there are some requirements that must be given if we want to claim responsibility for hidden defects. The defect or flaw must be evidently hidden, therefore the seller won’t respond for manifest or visible defect, neither if he knew about it, even if the flaw wasn’t visible. The defect must pre-exist to the sale of the property, the flaw can’t have arisen after the signing of the contract. Finally, the defect or flaw must be serious, which means that the value of the property decreases because of it.

If these three requirements are present and the buyer wants to recover the full amount payed with the purchase pre-agreement, he would have 6 months since the conclusion of the contract to claim. If in 6 months there has been no legal claim, the right to start a legal claim is lost.

Hopefully if you are an investor this post will help you. But if not, you can contact us at [email protected] or at 935 185 385.