When a Seller Backs Out of a Property Sale in Spain: Legal Rights with a deposit dispute

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Real Case Scenario: Refusal to Sell After Signing the Contract and a deposit dispute

An example of what can happen: You’ve signed a private purchase contract (contrato de arras) to buy a villa in Alicante. You’ve paid a €10,000 deposit, and the completion date was agreed for 13th March. However, a small delay (caused by administrative issues like obtaining your NIE (Foreigner Identification Number) pushes the timeline back by just a few weeks. Then, five days after the planned completion, the seller unexpectedly informs your solicitor that they no longer want to proceed with the sale.

Now, they’re refusing to reimburse your deposit or honour the compensation clause clearly outlined in the contract. Where do you stand legally?

Spanish Law Regarding the Contract and Breach by the Seller

In Spain, the contract is a binding pre-sale agreement used in most property transactions. It typically includes clauses to protect both buyer and seller in case of withdrawal:

• If the buyer pulls out, they lose the deposit.
• If the seller pulls out, they must return the deposit plus an equal amount — i.e., double the deposit (known as arras penitenciales, Article 1454 of the Spanish Civil Code).

This is very clear: If a seller voluntarily decides not to sell the property after signing such a contract, they are legally obliged to return the buyer’s deposit. And also to pay the same amount again as a penalty.

How A Delay Affects the Situation

A delay in obtaining NIE numbers, especially when it only affects a few weeks and both parties have not actively agreed to terminate, does not automatically nullify the contract.

In fact:

If the buyer shows willingness to proceed and has communicated regularly. And the seller has not formally served notice to cancel or fix a deadline, then the buyer is not considered in breach. Also, the buyers didn´t breach the contract. They couldn´t complete the purchase because of an “act of God” “force majeure”; the NIE appointments being out of their control.

 Therefore, if the sellers didn´t want to complete, they are the one cancelling the contract, and they have to pay double: 20.000 euros

Your Rights and Remedies Regarding a Deposit Dispute

If you’re in this position, you are entitled to receive:

• Your €10,000 deposit back,
• Plus another €10,000 as compensation, as per the contract.

Legal action can be taken, and a claim for damages (e.g. legal costs, valuation reports, etc.) may also be made if documented.

If the seller refuses:

Your solicitor can initiate pre-litigation negotiation (as mediation is now required in these cases for a month). And then if no agreement made then file a civil lawsuit to enforce the contract and recover the sums due.

Evidence is key: emails, good records, and written communications which help show good faith and preparation on your part.

Our Recommendation With a Deposit Dispute

If you find yourself or know someone in a similar situation:

• Do not accept informal refusals.
• Seek legal advice immediately, as timing and documentation are crucial.

At Molina Solicitors, we assist international buyers across Spain in resolving property disputes as quickly and effectively as possible; always defending your rights under Spanish contract law.

Need help with a seller dispute?

We’ll review your case, protect your deposit, and guide you through the legal process.