· Información legal
Refund of the reservation in property transactions: when can you claim it back?
In property practice it is common, before a lease or sale contract is formally executed, for the prospective tenant or buyer to hand over a sum of money described as a «reservation» in order to temporarily withdraw the property from the market, with the legitimate expectation that, if the other party withdraws from the negotiations, that amount will be refunded.
A typical scenario: you reserve a rental flat or put down a deposit on a property purchase, handing over 500, 1,000 or more euros for it to be taken off the market, and in the end the deal falls through. The recurring question then arises about the refund of the reservation: where the transaction is ultimately not completed, is the estate agent or the seller obliged to return that sum, or may they retain it?
The answer is not straightforward and requires consideration both of the legal nature of the reservation and, above all, of the reason why the contract was not executed.
The starting point: there is no general right of withdrawal
It is worth noting at the outset that Spanish law does not recognise a unilateral right of withdrawal as a general rule in the contractual sphere. As the courts have repeatedly held, the situations in which the legislature permits one party to walk away freely from a contract are very limited.
Accordingly, only a few specific cases may be cited, such as Article 1594 of the Spanish Civil Code (withdrawal by the client in a contract for works), Article 1732 of the same statute (revocation of a mandate), Article 11.2 of the Urban Leases Act 1994, or the specific consumer protection legislation.
As a consequence, outside these exceptional cases, unilateral withdrawal necessarily entails either compensation for damages or restitution of the performances rendered. This framework is essential when analysing what happens to sums paid as a reservation deposit.
What is a reservation: between pre-contractual negotiations and a preliminary contract
The so-called «reservation» has no specific regulation under Spanish law, which means that its legal classification must be determined on a case-by-case basis. In many instances, such payments fall within what are known as preliminary negotiations (the conversations and preparatory acts aimed at drawing up a contract that does not yet exist).
In this regard, the judgment of the Provincial Court of Barcelona, Section 13, no. 295/2022, of 16 June (Appeal no. 863/2021), recalls that these prior negotiations take place at a stage where no perfected contract yet exists, although they may give rise to liability if one of the parties acts in bad faith and unjustifiably breaks off the negotiation process (the so-called culpa in contrahendo, that is, liability for breaking off in bad faith negotiations that were already at an advanced stage).
When the refund of the reservation is due
Where the contract is not signed through no fault of the client
One of the most common situations is where the contract is never executed and no responsibility on the part of the client is established. In such cases, the courts have consistently held that the sum must be returned.
Thus, the judgment of the Provincial Court of Málaga, Section 4, no. 545/2013, of 24 October (Appeal no. 898/2011), establishes that where a sum is paid as a deposit for a future lease and the contract is not concluded without any proven justification, the amounts must be returned to the person who paid them, and the estate agent may not retain them.
Where new or more onerous conditions are introduced
Particular importance attaches to the situation in which the terms of the final contract differ substantially from those initially offered. The judgment of the Provincial Court of the Balearic Islands, Section 5, no. 311/2009, of 21 September (Appeal no. 282/2009), is a particularly clear illustration: it examines a case in which, after a reservation had been paid, a security deposit requirement far higher than the customary amount was introduced into the lease agreement.
The court considered that such a requirement constituted a surprising and onerous stipulation that should have been reflected in the reservation document, and concluded that the prospective tenant’s refusal to sign the contract was justified and that, consequently, there was no breach attributable to her, thereby entailing the obligation to return the full amount paid.
Where no agreement is reached during the negotiation stage
Repayment is also due where the contract fails to be concluded because of disagreements between the parties. Along these lines, the judgment of the Provincial Court of the Balearic Islands, Section 3, no. 723/2025, of 15 October (Appeal no. 997/2024), highlights the obligation to return the reservation where the lease agreement is not ultimately concluded precisely because of the parties’ failure to reach agreement.
Where it is the seller or landlord who withdraws
Where it is the selling or letting party who decides not to proceed with the transaction, the logical consequence is the restitution of the amount received. Even where the reservation cannot be strictly equated with penitential earnest money (the deposit that allows either party to withdraw, forfeiting it or returning it doubled), the doctrine set out in the judgment of the Spanish Supreme Court, Civil Division, no. 178/2026, of 9 February (Appeal no. 1301/2021) is instructive: in a case of seller withdrawal from a contract with earnest money, the court ordered the return of double the amount paid.
This approach makes clear that whoever unilaterally frustrates the transaction must bear the financial consequences of their conduct, which, applied to reservation deposits, reinforces the case for their refund.
When the prospective tenant or buyer may be held liable
In contrast to the situations described above, consideration must also be given to the reverse scenario: where it is the prospective tenant or buyer who decides not to proceed without justifiable cause. In such cases, pre-contractual liability may arise under the doctrine of culpa in contrahendo, as set out in the aforementioned judgment of the Provincial Court of Barcelona, Section 13, no. 295/2022, of 16 June (Appeal no. 863/2021).
Such liability makes it possible to claim damages, particularly where the other party acted in the legitimate expectation that the contract would be concluded.
The role of the estate agent: limits on retaining the reservation
A significant aspect concerns the position of the estate agent. In most cases, the estate agent acts as an intermediary between the owner and the prospective tenant or buyer.
Accordingly, as the judgment of the Provincial Court of Málaga, Section 4, no. 545/2013, of 24 October (Appeal no. 898/2011) underlines, the estate agent may not retain the amounts paid by the client if the contract is not concluded, and must instead claim its fees from whoever instructed it to manage the transaction.
Conclusion: it all depends on why the contract was not executed
From the foregoing, one fundamental point emerges: whether the reservation must be refunded depends on the reason why the transaction was not completed. As a general rule:
- A refund is due where there is no breach on the part of the prospective tenant or buyer, or where the conditions initially agreed are significantly altered and that is the reason the contract is not executed.
- Liability may arise where one of the parties, without justifiable cause, breaks off negotiations at an advanced stage.
Ultimately, regardless of the label given to the sum paid, the analysis must focus on the conduct of the parties and on the good faith that must govern every pre-contractual stage.
Frequently asked questions about reservation refunds
Am I entitled to a refund of the reservation if I end up not renting or buying?
It depends on the reason. If the contract is not signed through no fault of your own, the courts take the view that the reservation must be returned. If you are the one who withdraws without justifiable cause at an advanced stage of the negotiations, you may be liable for the resulting damages.
Can the estate agent keep the reservation?
No, if the contract is not concluded and the client has not breached their obligations. The estate agent acts as an intermediary and must claim its fees from whoever instructed it, not retain the money you paid.
What happens if the conditions (deposit, price) are changed from what was originally agreed?
If the final contract contains new and more onerous conditions that did not appear in the reservation document, your refusal to sign may be justified and you would be entitled to a full refund of the amount paid.
What if I am the one who withdraws without reason?
If you break off the negotiations without justifiable cause at a point where the other party was legitimately relying on the contract being concluded, pre-contractual liability may arise and you could be required to compensate the resulting damages.
Is a reservation the same as earnest money or a deposit?
Not exactly. A reservation has no specific regulation and is classified on a case-by-case basis; earnest money (for example, penitential earnest money under Article 1454 of the Spanish Civil Code) is specifically regulated. Even so, the underlying logic is similar: whoever frustrates the transaction without justification bears the consequences.
How do I claim a refund of the reservation?
The first step is to gather evidence: the reservation document, the messages exchanged during the negotiation, and the reason why the contract was not signed. With that, you can first make an out-of-court claim and, if no agreement is reached, pursue the matter through the courts by way of a claim for payment.
Has your reservation deposit been withheld on a rental or purchase transaction? At Trigo Buide, as property lawyers in Madrid, we can review your case and claim the amount you are entitled to.