{"id":19531,"date":"2026-09-05T13:20:03","date_gmt":"2026-09-05T11:20:03","guid":{"rendered":"https:\/\/mediadorconflictos.com\/?p=19531"},"modified":"2026-09-05T13:31:18","modified_gmt":"2026-09-05T11:31:18","slug":"when-problems-arise-after-signing-the-deposit-agreement","status":"publish","type":"post","link":"https:\/\/mediadorconflictos.com\/en\/when-problems-arise-after-signing-the-deposit-agreement\/","title":{"rendered":"When problems arise after signing the deposit agreement"},"content":{"rendered":"

When problems arise after signing the deposit agreement: the value of mediation in real estate disputes<\/strong><\/h3>\n

Buying commercial premises to start or continue a business activity involves much more than simply acquiring a property. There is, of course, a financial investment, but there is also a professional project, a set of expectations and, in many cases, months of work before reaching the point of purchase.<\/p>\n

What happens when, after a deposit agreement has been signed and the transaction has already progressed, significant problems begin to emerge that the buyer had not been able to identify during the visits carried out before making the decision?<\/p>\n

This situation can easily lead to a dispute between buyer and seller. It may become even more complex when the transaction does not involve only the purchase of the property itself, but also the transfer of the business operating from those premises<\/strong>.<\/p>\n

I recently had the opportunity to intervene as a mediator in a dispute of this kind. Naturally, for reasons of confidentiality, I will not include any information that could identify the people involved, the establishment or the transaction. However, the experience seems to me particularly useful as a basis for reflecting on an area in which mediation can be especially valuable: disputes arising from real estate transactions, deposit agreements and business transfers<\/strong>.<\/p>\n

 <\/p>\n

When a single transaction actually contains two transactions<\/strong><\/p>\n

The first feature that made the case particularly interesting was the existence of two closely related transactions. On the one hand, there was the purchase of commercial premises<\/strong> and, on the other, the transfer of the business activity<\/strong> being carried out there, together with its installations, equipment and other elements linked to the operation of the business.<\/p>\n

From the buyer\u2019s perspective, both elements formed part of the same project: acquiring premises from which a specific economic activity could continue to be carried out. This raises an important issue, because when someone buys premises for a particular business purpose, the true condition of the property and its installations may be decisive. Buying an empty space is not the same as acquiring premises linked to an existing business that is expected to remain operational.<\/p>\n

 <\/p>\n

What is not always visible during the first visits<\/strong><\/p>\n

Before committing to the purchase of a property, it is normal to visit it, inspect its condition and assess whether it meets the buyer\u2019s needs. In the case that forms the basis of this reflection, this was also the case: the buyer had visited the premises before progressing with the transaction and signing the deposit agreement<\/strong>.<\/p>\n

However, one visit to commercial premises, or even several visits, does not always make it possible to understand their true condition in depth. It was later, as the transaction progressed and the buyer began to enter the premises more frequently, spend more time there and become much more familiar with the installations and their operation, that certain circumstances began to emerge which had not initially been noticed.<\/p>\n

One of the particular features of these situations is precisely that problems may become apparent progressively. Certain damp problems may not be obvious during the first visits; some hygiene or maintenance deficiencies require a more detailed knowledge of the premises; and the true condition of certain installations or technical elements may only become apparent once their operation and maintenance are examined more closely.<\/p>\n

In the case that inspired this reflection, significant damp problems, hygiene and maintenance issues and various defects affecting installations and technical elements connected with the business activity<\/strong> gradually came to light. What matters from the point of view of the dispute is that these circumstances had not been identified by the buyer during the earlier visits and progressively changed the buyer\u2019s perception of what was being acquired.<\/p>\n

 <\/p>\n

When the deposit agreement has already been signed<\/strong><\/p>\n

The problem takes on another dimension when these circumstances begin to emerge after the transaction is already well advanced. A deposit agreement<\/strong> may already have been signed, a significant sum may have been paid and certain steps may even have been taken in preparation for the future business activity.<\/p>\n

At that point, the parties\u2019 perceptions may begin to diverge. The seller may consider that the buyer visited the property, knew what was being purchased and entered into a contractual commitment. The buyer, on the other hand, may consider that certain significant defects were not visible during those initial visits and that, had their real extent and the cost of remedying them been known in advance, the decision might well have been different.<\/p>\n

A transaction that had until then seemed likely to be completed may therefore turn into a dispute in which, in addition to financial issues, different interpretations begin to emerge regarding what happened and what obligations each party assumed.<\/p>\n

 <\/p>\n

Hidden defects and lack of conformity: the importance of not jumping to conclusions<\/strong><\/p>\n

In situations of this kind, the expression \u201chidden defects\u201d<\/strong> usually appears very quickly. This is understandable, because it is a familiar legal concept where defects are discovered after a property transaction has already progressed and those defects had not been identified beforehand. However, from a legal point of view, caution is required and each case must be examined individually.<\/p>\n

The fact that the buyer later discovers certain problems does not automatically mean that there is sufficient legal basis to terminate the transaction. It will be necessary to examine what defects existed, when they arose, whether they could reasonably have been detected before the contract was entered into, how serious they are, what had been agreed, what information had been provided and to what extent those circumstances affect the intended use of the property.<\/p>\n

In Catalonia, moreover, the law governing sale contracts places particular emphasis on the concept of conformity of the goods with the contract<\/strong>. This requires the property delivered to be assessed in relation to what had been agreed and the legally relevant circumstances of the transaction. Where there is a possible lack of conformity, different legal remedies may be available and, where the relevant requirements are met, termination of the contract may also be sought.<\/p>\n

The existence and legal consequences of such defects must therefore be assessed by the parties\u2019 lawyers and, if the dispute ultimately goes to court, it will be for the courts to determine their legal effect.<\/p>\n

The mediator\u2019s role is not to decide who is legally right. The mediator starts from a different point: there is a dispute, there are different perceptions of what has happened, there may be legal and financial risks for the various parties and, in addition, the transaction may no longer be viable on the terms originally envisaged.<\/p>\n

 <\/p>\n

Not all deposits are the same: the particular position in Catalonia<\/strong><\/p>\n

When we refer to a deposit agreement<\/strong>, an important clarification is needed: not all deposits or earnest money arrangements necessarily have the same legal nature or produce the same consequences.<\/p>\n

In general terms, a distinction is often drawn between confirmatory deposits, penitential deposits and penal deposits<\/strong>. Confirmatory deposits essentially operate as a payment on account of the purchase price and as confirmation that the contract has been concluded. Penitential deposits are linked to the possibility of withdrawing from the transaction while accepting the corresponding financial consequences. Penal deposits, meanwhile, primarily serve as a guarantee or contractual penalty in the event of non-performance, in accordance with what the parties have agreed.<\/p>\n

In Catalonia there is a particular rule that is important to understand. The Civil Code of Catalonia provides that a sum of money paid by the buyer to the seller is, as a general rule, treated as a confirmatory deposit, that is, as evidence that the sale has been concluded and as a payment on account of the purchase price<\/strong>. Penitential deposits, by contrast, must be expressly agreed. Where they have been expressly agreed as such, they allow a party to withdraw from the contract subject to the legal financial consequences: in general, if the buyer withdraws, the buyer loses the deposit, while if the seller withdraws, the seller must return double the amount.<\/p>\n

For this reason, when a property transaction does not ultimately proceed, it is not enough simply to say that \u201ca deposit had been paid\u201d in order to know automatically what will happen to that money. The contract must be examined, the legal nature of the deposit must be determined, the applicable law must be identified and, above all, the real reason why the transaction is not continuing must be analysed.<\/p>\n

 <\/p>\n

Withdrawing is not necessarily the same as terminating for breach<\/strong><\/p>\n

This is probably one of the most interesting issues where significant defects appear after the deposit agreement has been signed.<\/p>\n

Imagine that the buyer simply changes their mind and decides that they no longer wish to acquire the property. If penitential deposits had been agreed, the consequences of withdrawal provided for in the contract and under the applicable law would come into play.<\/p>\n

The situation may be different, however, where the buyer argues that they are not abandoning the transaction merely because they have changed their mind, but because pre-existing defects have emerged which were not apparent initially and which, because of their nature or seriousness, may substantially affect the object of the sale or the purpose for which the property was being acquired<\/strong>.<\/p>\n

In that situation, the legal issue is no longer limited to determining what happens when the buyer withdraws. It will be necessary to consider whether there is in fact a lack of conformity or a contractual breach that entitles the buyer to exercise one of the remedies provided by law and, where appropriate, whether the requirements are met for seeking termination of the contract and restitution of the sums paid.<\/p>\n

This distinction is fundamental. Saying \u201cI no longer want to buy\u201d is not necessarily the same as saying \u201cI do not want to continue with the transaction on these terms because what is being delivered to me has significant defects that I did not know about when I entered into the contract.\u201d<\/strong><\/p>\n

Of course, making this second assertion is not in itself enough to create an automatic right to recover the deposit. The circumstances will have to be proven, their seriousness assessed, it will have to be determined whether they were known or reasonably detectable and the provisions of the contracts will have to be examined. This is precisely where very different legal positions may arise between buyer and seller.<\/p>\n

 <\/p>\n

When the problem concerns not only the premises, but also the business<\/strong><\/p>\n

This issue becomes particularly relevant where, as in the case that inspired this reflection, the transaction involves not only the acquisition of property but also the transfer of a business activity<\/strong>.<\/p>\n

The condition of the premises may then have a direct impact on whether the business can continue operating. When damp, hygiene deficiencies, significant cleaning or remediation requirements or defects affecting technical installations begin to emerge, the buyer is no longer assessing only the cost of acquiring the property. The buyer must also calculate how much additional money will have to be invested to bring the premises into the condition required for the intended business activity.<\/p>\n

That new financial reality can completely alter the assessment of a transaction that had seemed reasonable when the deposit agreement was signed.<\/p>\n

 <\/p>\n

The additional cost that appears afterwards<\/strong><\/p>\n

Every business investment is based on figures. The initial calculation takes into account the price of the property, the cost of the business transfer, financing, taxes, possible works to adapt the premises, equipment, staffing and the working capital needed to start or continue the activity.<\/p>\n

When, after those calculations have been made, additional works and expenses begin to emerge that were not originally anticipated, the financial balance of the project can change. A single repair may be perfectly manageable, but the situation is different when problems of various kinds begin to accumulate and progressively increase the investment required before the business has even been able to operate under the expected conditions.<\/p>\n

At that point, the issue is no longer purely technical or legal. The buyer has to assess whether, in light of the new information available and an investment greater than originally anticipated, it still makes sense to continue with the transaction<\/strong>.<\/p>\n

 <\/p>\n

Loss of confidence is also part of the dispute<\/strong><\/p>\n

This is where an element that I consider particularly important from my experience as a mediator comes into play: the emotional dimension of a property purchase linked to a business project<\/strong>.<\/p>\n

Someone who buys commercial premises to develop a business is not simply purchasing square metres. They are planning an activity, doing financial calculations, seeking funding, thinking about customers, employees and suppliers and, ultimately, imagining what their professional project will look like.<\/p>\n

As the premises become better known, if different problems begin to emerge that had not initially been anticipated, there may be a cumulative effect. A damp issue or a particular repair may have a relatively straightforward solution, but if further maintenance needs, defects affecting certain installations, hygiene issues requiring correction and other unforeseen expenses subsequently arise, the overall perception of the transaction begins to change. Each individual problem is no longer assessed in isolation; what matters is the accumulation of them all and the uncertainty as to what other issues may emerge later.<\/strong><\/p>\n

At that stage, a loss of confidence in the transaction as a whole<\/strong> may arise. That emotional factor does not, of course, determine the legal consequences of the contract, but it is essential to understand it in a negotiation. A person may have entered into a transaction with considerable enthusiasm and confidence and, after discovering a series of successive difficulties, come to the conclusion that they no longer wish to proceed.<\/p>\n

 <\/p>\n

What can mediation contribute?<\/strong><\/p>\n

Mediation makes it possible to introduce a different perspective without disregarding the parties\u2019 legal positions. Rather than focusing the entire discussion on who is right and what might happen if the dispute ends up before a court, mediation allows the parties to consider what each of them needs at that point and whether there is a solution that would allow the situation to be brought to an end in a reasonable way<\/strong>.<\/p>\n

This does not mean that either party must give up their rights in advance. On the contrary, it is entirely compatible with mediation for the buyer and seller to be advised by their respective lawyers and to understand their legal position, the arguments available to them and the risks they would assume if they decided to litigate. Having that information may actually help them negotiate with a clearer understanding of the situation.<\/p>\n

Mediation creates a space in which the legal reality can be considered together with other equally relevant factors: the financial cost of continuing the dispute, the time that court proceedings may take, uncertainty over the outcome, the additional investment required by the premises and, above all, whether the parties still have an interest in maintaining the transaction or would prefer to find a way of bringing it to an end<\/strong>.<\/p>\n

 <\/p>\n

Solutions do not have to be black or white<\/strong><\/p>\n

One of the advantages of mediation in real estate disputes is precisely the possibility of working with different variables. The solution does not necessarily have to be limited to proceeding exactly on the terms originally agreed or abandoning the transaction and going to court.<\/p>\n

Depending on the circumstances, it may be possible to negotiate a reduction in the price, financial compensation, the carrying out of certain repairs before completion, a sharing of the costs required to adapt the property or a modification of the terms originally agreed. If the buyer has definitively lost interest in proceeding, it may also be possible to explore a consensual exit from the transaction<\/strong>, negotiating what happens to the deposit and any other sums paid and how the financial and practical consequences of what has happened up to that point are to be settled.<\/p>\n

Sometimes the agreement ultimately reached does not correspond exactly to the initial position of either party. It may nevertheless offer both sides a sufficiently reasonable solution compared with the cost, time and uncertainty involved in keeping the dispute open and taking it to court.<\/p>\n

 <\/p>\n

When three parties are involved<\/strong><\/p>\n

Certain property transactions present another particularly interesting feature. When the purchase of the property and the transfer of the business<\/strong> are combined, the transaction may involve not just a buyer and a seller but several individuals or companies with different interests: the party acquiring the property, the party transferring the property and the party transferring the business activity.<\/p>\n

This creates a three-party dispute<\/strong>, in which the parties\u2019 interests do not necessarily coincide. A particular payment may relate to the property purchase and another to the business transfer; one issue may primarily concern the premises while another affects installations or elements connected with the business. A solution that is acceptable to two parties may not necessarily be satisfactory to the third.<\/p>\n

It is precisely in situations of this kind that mediation can provide a broader perspective. Instead of fragmenting the dispute into separate contractual relationships and separate claims, mediation makes it possible to consider the transaction as a whole and the consequences that any proposed solution would have for everyone involved<\/strong>.<\/p>\n

 <\/p>\n

Mediator and lawyers: different but complementary roles<\/strong><\/p>\n

In disputes of this kind, I believe it is particularly important to explain the role of each professional. The mediator does not replace the lawyer of any party<\/strong>, nor is it the mediator\u2019s task to determine whether there is legally a lack of conformity, how the deposit agreement should be interpreted or what liabilities fall on each participant.<\/p>\n

It is for the lawyers to examine the contracts, assess the available evidence, analyse any possible breaches and advise their clients on their rights, obligations and risks. The mediator works on a different level: helping to structure the dispute, facilitating communication between the parties, identifying their real interests and exploring with them the different alternatives that may make an agreement possible.<\/p>\n

For this reason, in property transactions of some complexity, lawyers and mediators can perform entirely complementary roles. The lawyers help each party understand their legal position, while mediation allows the parties to work on the realistic possibilities for agreement that arise from those positions.<\/strong><\/p>\n

 <\/p>\n

The value of bringing an unsuccessful transaction to a proper close<\/strong><\/p>\n

Not every property transaction ends as the parties originally expected, and not every transaction that breaks down necessarily has to end in court. Sometimes the real solution is not to try to preserve at all costs a transaction in which confidence has been lost, but to find a reasonable way of bringing it to an end<\/strong>.<\/p>\n

That may involve negotiating financial amounts, determining what happens to the deposit, returning keys or assets, settling expenses, organising outstanding obligations and, where appropriate, establishing closing terms that allow the parties to bring their relationship to an end and avoid further disputes in the future.<\/p>\n

Bringing an unsuccessful transaction to a proper close can itself be a good agreement.<\/p>\n

 <\/p>\n

Mediation in real estate disputes: an option worth considering<\/strong><\/p>\n

Mediation is often associated with family, neighbourhood or employment disputes. However, there is also significant scope for civil, commercial and real estate mediation<\/strong>. Problems arising in a property sale, disputes concerning a deposit agreement, defects discovered when the transaction is already advanced, disagreements over the condition of a property or disputes linked to the transfer of a business may involve significant sums of money and legally complex situations.<\/p>\n

For precisely that reason, it may make sense to attempt a structured negotiation before going to court. Mediation does not guarantee that an agreement will be reached, but it offers something important: the possibility for the parties themselves to retain control over the solution and to consider alternatives that a court would rarely be in a position to provide<\/strong>.<\/p>\n

In some cases, it may be possible to proceed with the sale after modifying certain conditions; in others, to renegotiate the price or allocate the cost of particular works; and there will also be situations in which the best solution for the parties is to bring the transaction to an end and agree on its financial consequences.<\/p>\n

Every dispute is different. But when a real estate transaction becomes complicated after a deposit agreement has been signed, it is worth remembering that between accepting a situation that is no longer wanted and immediately starting court proceedings, there is also space for negotiation<\/strong>.<\/p>\n

And that is precisely one of the areas in which mediation can add the greatest value.<\/p>\n

 <\/p>\n

Daniel Sererols Villal\u00f3n<\/strong>
\nLawyer and Conflict Mediator<\/strong>
\nMediation in Barcelona, Catalonia and throughout Spain<\/p>\n

\ud83d\udcde 661 463 306<\/strong>
\n\u2709\ufe0f daniel@mediadorconflictos.com<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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