# vendor breaking arras contract!



## sansylivin (Sep 16, 2013)

Hi All,

situation is that we have entered into a house purchase and have signed the typical contrato de arras with 10% deposit (>35K) and penalty of losing the deposit if we back out and twice the deposit if vendor backs out. Now there is nothing concrete that has happened yet but the vendor has indicated to me that they are now unhappy with the sale and would back out if they could.

My questions are:
1) If the vendor does back out who/how can we enforce the penalisation as I believe this is a civil matter and so would require a potentially long legal wrangle?
2) How long could this take?
3) The vendor is v. old so if they dig their (wrinkly) heels in are we stuffed?
4) What happens if the vendor dies meanwhile?

Hopefully it will go through smoothly but would be grateful for the info/experience of everyone.


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## skip o (Aug 1, 2011)

I am interested to hear any response to this.


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## Chopera (Apr 22, 2013)

sansylivin said:


> Hi All,
> 
> situation is that we have entered into a house purchase and have signed the typical contrato de arras with 10% deposit (>35K) and penalty of losing the deposit if we back out and twice the deposit if vendor backs out. Now there is nothing concrete that has happened yet but the vendor has indicated to me that they are now unhappy with the sale and would back out if they could.
> 
> ...


Where is the 10% deposit being held? In a holding account? I imagine that if they pull out then yes it could go to court, but if they buyer has no reason to think they'll win the case they probably won't want to do that and instead want to negotiate something. The worst that can happen to them is you refuse to release the money from the holding account, the worst that can happen to you is nothing. What you could do is put the house back on the market and see if you can get a new buyer, and then negotiate with the previous buyer what happens to the money in the holding account, based on the damages caused by you having to re-market the property, and possibly having to accept a lower offer. However it might be better to talk to a lawyer first because a court might view your placing the house back on the market as a breach of contract on your part.


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## Lynn R (Feb 21, 2014)

Chopera said:


> Where is the 10% deposit being held? In a holding account? I imagine that if they pull out then yes it could go to court, but if they buyer has no reason to think they'll win the case they probably won't want to do that and instead want to negotiate something. The worst that can happen to them is you refuse to release the money from the holding account, the worst that can happen to you is nothing. What you could do is put the house back on the market and see if you can get a new buyer, and then negotiate with the previous buyer what happens to the money in the holding account, based on the damages caused by you having to re-market the property, and possibly having to accept a lower offer. However it might be better to talk to a lawyer first because a court might view your placing the house back on the market as a breach of contract on your part.


The way I read the query, the OP is the prospective buyer, not the vendor? It's the vendor who has the deposit but is thinking of backing out of the deal, I think.


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## Chopera (Apr 22, 2013)

Lynn R said:


> The way I read the query, the OP is the prospective buyer, not the vendor? It's the vendor who has the deposit but is thinking of backing out of the deal, I think.


You're right - I read it the wrong way round. In that case there might not be much the op can do except take the vendor to court or try to negotiate something. AFAIK the system favours the vendor in this sense, since it's the buyer who has to pay the initial deposit.


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## sansylivin (Sep 16, 2013)

Hi yes I am the buyer not the vendor. So the vendor has the deposit (bank cheque) not in a holding account. The problem is to go the legal route can take a long time and I have a feeling the vendor is on her last legs.

Thanks for your resonses


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## Chopera (Apr 22, 2013)

sansylivin said:


> Hi yes I am the buyer not the vendor. So the vendor has the deposit (bank cheque) not in a holding account. The problem is to go the legal route can take a long time and I have a feeling the vendor is on her last legs.
> 
> Thanks for your resonses


If the vendor has your money in their bank account then I would personally feel uncomfortable and very politely agree to them cancelling the agreement and giving the money back. Get your money back first. In future I would get your lawyer or your bank to set up some kind of neutral holding account such as an escrow account instead. If the vendor dies then you will be a creditor and I have no idea how Spanish law would prioritise your claim to that part of their estate. For all you know there may be other creditors making claims as well.


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