Types of contracts for accommodation reservations. Choose yours.
Real estate investment is a very important decision. The acquisition of housing involves the preparation of a preliminary contract. According to this contract the buyer is supposed to pay a deposit. The reservation contract requires particular formalities. It must detail the subject of the agreement between the two parties and what needs to be implemented.
There are many types of contracts for the real estate selling and reservation. Let’s consider the most popular of them.
Reservation Contract – Contrato de Reserva de Vivienda
When booking a home the buyer pays the agreed amount against the property price and the seller consent to provide the property and suspend advertising. This type of booking is valid for the purchase of both secondary and primary real estate. You enter into sale commitments from the moment of signing the reservation contract. If you do not have sufficient funding or have any doubts with regard to buying do not choose this type of contract because according to it the purchase cannot be terminated.
Deposit – Arras
As for the deposit you need to know that this is more of an agreement than a contract. It involves the transferring of an item (in our case, real estate) to the other side. Such an agreement ensures compliance with obligations between the seller and the buyer. There are three types of deposits: confirmatory (arras confirmatorias), with compensation (arras penales) and with the possibility of cancellation (arras penitenciales). The choice of one or the other results in various rights and duties:
Confirmatory deposit resembles a reserve agreement. Once you signed a confirmation act the purchase of real estate becomes obligatory. In this case the deposit amount is paid as a prepayment against the agreed price. If a deposit contract is signed and the type of deposit is not specified it will be regarded as the confirmatory deposit. If the counterparty does not fulfill their obligations it may be necessary to enforce the contract or require them to pay the damages. Usually in this situation you will have to go to court.
It is another type of deposit. This is actually a housing reserve with a bit of an individual approach added to it. So as a seller you should remember that if you are sure about the sale it is actually convenient to sign a deposit with compensation. They guarantee the sale of the house, not to mention the compensation that you receive if the buyer violates the terms of the contract.
In this case the parties to the transaction have the opportunity to legally withdraw from the contract. This type of deposit represents a “promise” of sale which allows both the seller and the buyer not to pursue the sale. Obviously, the refusal to buy or sell has its consequences. If you are a seller and you decided not to sell your real estate, you will have to return twice as much as you already received from the buyer. If you are a buyer and have finally decided that you do not want to make a purchase, you will lose your deposit. A well-drawn contract for this deposit type is usually recognized by judicial practice and makes it possible to avoid legal proceedings.
In conclusion we want to say that generally the most suitable type of contract is Arras penitenciales. However, if you have clearly decided on a real estate sale or purchase the best option for you is Arras confirmatorias.