How to pay a deposit in a Spanish property purchase

Antonio Guillen, Spanish Desk Partner, examines the different ways 10% deposits are paid and protected in Spanish property purchases: 

A few weeks ago, I wrote about how the purchase price is typically paid on completion in Spain. Since then, several readers and contacts have asked me to explain the earlier stage: how and where the initial 10% deposit is usually paid. 

As many may know, the deposit stage in Spain is structurally different from the UK system. The party, assuming the greatest risk at this point, is almost always the purchaser, not the seller. With that in mind, here is my ranking of the payment options, ordered by the level of protection they offer the purchaser. Unsurprisingly, this order does not align with what most Spanish sellers prefer. 

1. Paying the 10% deposit into the purchaser’s lawyer’s client account 

This is the holy grail for buyer protection, albeit rarely accepted in Spain. 

The lawyer holds the 10% as stakeholder and releases it to the seller only on completion. However, this requires the lawyer to be a party to the deposit contract and to undertake to hold and release the funds accordingly. Many Spanish lawyers are unwilling to assume this contractual role, and most sellers prefer to have the funds under their own or their lawyer’s control. 

2. Paying the 10% deposit into the seller’s lawyer’s client account 

This is the closest practical alternative and, in many cases, the fairest compromise. 

The seller gains comfort because the money is “one step closer,” yet the lawyer, a regulated professional with indemnity insurance, can include a contractual undertaking into the sale and purchase agreement to hold the funds and to refrain from releasing them before completion. 

Despite the logic and balance of this arrangement, only around 20% of sellers agree to it in practice. A cultural preference for direct control of the deposit persists. 

3. Paying the 10% deposit to the estate agent 

If neither lawyer is willing or able to hold the deposit or the seller does not agree to these options, the estate agent is usually the next-best option. 

Many Spanish agents do not have client accounts or indemnity insurance, but in practice they tend to safeguard the funds reasonably, motivated by the fact that their commission (typically around 5% of the price) will be payable on completion. Still, this option is inherently less secure than involving a lawyer. 

4. Paying the 10% deposit directly to the seller 

This is the most common practice in Spain, and the one that tends to shock more my UK colleagues. 

In this scenario, the buyer sends 10% of the price directly to the seller’s personal account with no protective mechanism whatsoever. The funds are unregulated, unprotected, and immediately accessible to the seller. If the seller disappears or refuses to honour the contract, the buyer’s only recourse is litigation, which will be lengthy and costly. 

Despite these risks, this remains the default in many Spanish transactions. The buyer’s lawyer must therefore make every effort to secure one of the safer alternatives above but must also explain clearly to the client that this less-protected route is still considered “normal practice” in Spain. 

Final thoughts 

In short, the deposit stage in Spanish property purchases follows a decrescendo scale of buyer protection, from lawyer-held funds to direct payment to the seller. While options 1 and 2 are ideal, they are not always achievable. When they are not, it is essential for purchasers (and their advisers) to understand the risks and the practical realities of the Spanish market. 

If you would like guidance on navigating Spanish property transactions, or if you are advising a client buying in Spain, get in touch now.