What is a penitential deposit contract?

What is a penitential deposit contract?

When you buy a home in Catalonia – whether in Barcelona, Girona, Lleida or Tarragona – one of the first steps after agreeing on the price is to sign a deposit contract. This contract is a private pre-agreement that serves as a guarantee for both parties before formalizing the final sale before a notary

What does a deposit contract include?

The deposit contract establishes in writing the main terms of the agreement between buyer and seller, as well as the conditions for reserving the property. It typically includes:

  • Complete identification of buyer and seller.

  • Description of the property (address, cadastral reference, registration number, surface area).

  • Total price of the sale.

  • Amount given as a deposit or deposit.

  • Maximum period to sign the public deed before a notary.

  • Type of deposit agreed (generally, penitential).

  • Consequences of withdrawal by one or the other party.

  • Possible conditions precedent (e.g. granting of a mortgage).

  • Signature of both parties and date.

Documentation that is usually provided with the contract

Although the deposit contract is a private document, in Catalonia it is common for a series of key documents to be attached or shown to the buyer to guarantee transparency:

  • Updated simple registry note (to verify the ownership and encumbrances of the property).

  • Extract from the  Cadastre
  • Energy efficiency certificate.

  • Certificate of occupancy (if the sale is of a home).

  • Latest receipts for supplies and community expenses.

  • Furniture Addendum
  • Sometimes, too: property deed, plans, certificate of zero debt of the community, etc.

These documents allow you to verify that the property is in order before committing to the final sale.


What are penitential deposits?

The penitential deposit (regulated in article 1454 of the Civil Code) is a kind of deposit or advance that allows both parties to withdraw from the contract, although with economic consequences.

  • If the buyer backs out, he loses the money given as a deposit.

  • If it is the seller who withdraws, he must return double what he received.

This type of deposit does not oblige either party to sign the sale if they change their mind. In exchange, however, they must assume the agreed penalty.

In Catalonia, this is the most common type of deposit in private real estate transactions.


And what are the penal and confirmatory deposits?

There are two other types, less used in Catalonia but important to know:

▸ Criminal deposit

They work like a penalty clause: if a party fails to comply, not only does it lose or must return the deposit, but additional compensation for damages can also be demanded. Here, the contract is considered binding, and there is no right of unilateral withdrawal.

▸ Confirmatory deposit

They are simply a down payment on the price. They do not allow desisting nor do they imply a specific penalty beyond compliance with what was agreed. If there is non-compliance, the contract can be enforced or terminated, with damages.


Which one is right for you?

  • If you are in Catalonia and want to leave a margin to repent, the most common thing is to opt for penitential deposits.

  • If you are looking for a firm commitment and you want to heavily penalize non-compliance, you can consider criminal deposits.

  • For safe operations and with no margin for withdrawal, the confirmatory deposit reinforces the intention to sign no matter what.


Conclusion

The deposit contract is a useful and flexible tool. In Catalonia, the most common is to use penitential deposits, as they allow a certain freedom in exchange for financial compensation. Even so, each case is different, and it is advisable to have legal advice before signing anything.