Earnest Money Receipt Chile (Recibo de Arras)

Earnest Money Receipt Chile (Recibo de Arras) is a written instrument governed by Código Civil Arts. 1803–1805 documenting the payment of arras — a sum of money or other valuable thing (cosa mueble) delivered by one contracting party to another as evidence of the conclusion of a contract or as a penalty mechanism entitling either party to withdraw from the contract by sacrificing the arras (the payer loses the arras) or returning them doubled (the recipient returns double the arras received). The Recibo de Arras is central to Chilean real estate practice, where it documents the earnest money paid by a buyer (comprador) to a seller (vendedor) upon signing a promesa de compraventa (promise of sale) governed by Código Civil Art. 1554.

The legal framework for arras in Chile is established by Código Civil Arts. 1803–1805, located in Title XXIII of Book IV (De la Compraventa). Art. 1803 establishes the fundamental rule: if arras (earnest money) are given in evidence of the conclusion of the contract or as a guarantee of its performance, the contract is deemed perfected — but either party may retract (retractarse) within the terms agreed, the party who gave the arras forfeiting them (pierde las arras) and the party who received them returning double the amount (restituir el duplo). Art. 1804 provides that if the parties have not fixed a term for retraction, the right to retract ceases when the contract has been fully performed, or when all preliminary formalities have been completed. Art. 1805 establishes that if the arras are in money or other fungible thing, and no retraction term has been agreed, the party who retracted must pay the other party an amount equal to the arras — in addition to forfeiting or returning double.

In Chilean real estate transactions, the arras operate as arras penitenciales (penitential earnest money) — the payment amount that functions as a mutually agreed pre-liquidated penalty (pena convencional) for withdrawal. The real estate sector practice — regulated in part by the Cámara Chilena de la Construcción (CChC) guidelines for residential property transactions — standardises arras payments of between 5% and 10% of the agreed purchase price (precio de venta) for residential properties. The Servicio de Impuestos Internos (SII) taxes the final sale of real property under the IVA regime (Decreto Ley N° 825) when the seller is a habitual seller (vendedor habitual) — the arras payment received by a habitual seller generates a provisional IVA obligation that is deducted from the final sale IVA when the compraventa is perfected before a Notario Público and inscribed at the Conservador de Bienes Raíces.

The distinction between arras as evidence of contract conclusion (arras confirmatorias) and arras as a retraction mechanism (arras penitenciales) is critical under Chilean law. Arras confirmatorias under Art. 1803 evidence that the contract has already been concluded — neither party can withdraw without breach. Arras penitenciales are given precisely to preserve the right of either party to withdraw on agreed terms. The Recibo de Arras must expressly state which type of arras is being given to avoid disputes before the Juzgado de Letras en lo Civil.

An Earnest Money Receipt Chile is needed whenever a buyer delivers arras to a seller as part of a promesa de compraventa or other preliminary contract, and the parties require written documentation of the payment, the forfeiture/return rules, and the retraction deadline.

The document is essential in residential real estate transactions where a buyer wishes to secure the purchase of a property — house (casa), apartment (departamento), or plot of land (sitio) — while the parties complete due diligence, arrange financing (crédito hipotecario from CMF-regulated banks such as BancoEstado, Banco de Chile, Banco Santander Chile, or BCI), and prepare the final compraventa deed for execution before a Notario Público and inscription at the Conservador de Bienes Raíces. The promesa de compraventa is governed by Código Civil Art. 1554, which requires it to be in writing (constar por escrito) — the Recibo de Arras documents the earnest money component of this promissory agreement.

A Recibo de Arras is needed in commercial real estate transactions — the purchase of oficinas, bodegas, locales comerciales, or industrial land — where the parties sign a preliminary agreement (precontrato) and the buyer pays arras while negotiating the final terms of the compraventa deed. Commercial real estate transactions in Chile are often structured with larger arras percentages (10%–20% of the purchase price) reflecting the higher transaction values and due diligence requirements.

The document is required in transactions for the purchase of vehicles (vehículos motorizados) registered with the Registro de Vehículos Motorizados under the Servicio de Registro Civil e Identificación, where the buyer pays a reservation deposit (señal de reserva / arras) while the seller completes the transfer documentation and the buyer arranges financing. A Recibo de Arras specifying the retraction terms protects both the buyer (who may lose financing approval) and the seller (who takes the property off the market).

Service contracts for high-value professional services — architectural projects (proyectos de arquitectura), construction works (obras de construcción), and custom manufacturing — frequently use arras to confirm the contract and provide a penalty mechanism for cancellation. The Recibo de Arras documents the advance payment and establishes the financial consequences of cancellation by either party under Código Civil Arts. 1803–1805.

A valid Earnest Money Receipt Chile under Código Civil Arts. 1803–1805 must contain the following elements to be enforceable and to clearly establish the rights and obligations of both parties upon retraction or breach.

Party Identification: Full legal name, RUT (Rol Único Tributario assigned by the Servicio de Impuestos Internos, SII), cédula de identidad number issued by the Servicio de Registro Civil e Identificación, and domicile of both the payer (buyer / comprador) and the recipient (seller / vendedor). For legal entity parties — Sociedad Anónima (SA) under Ley 18.046, Sociedad por Acciones (SpA) under Código de Comercio Arts. 424–446, or Sociedad de Responsabilidad Limitada (SRL) under Ley 3.918 — the razón social, RUT, and the name and authority of the signing representative must be stated.

Description of the Main Contract (Contrato Principal): A clear description of the principal transaction for which the arras are being paid — the property being purchased (with full address, rol de avalúo number assigned by the SII, and Conservador de Bienes Raíces folio real number), the vehicle being sold (make, model, year, patent number, motor number), or the service being contracted. Reference to the underlying promesa de compraventa under Código Civil Art. 1554, if applicable, ensures the Recibo de Arras is clearly linked to the main agreement.

Arras Amount: The exact amount paid as arras, stated in Chilean Pesos (CLP) or Unidades de Fomento (UF), both in figures and in words. If in UF, the CLP equivalent at the official Banco Central de Chile UF value on the payment date must also be stated. The arras amount should be expressed as a percentage of the total transaction price to facilitate calculation of the forfeiture or double-return obligation.

Total Transaction Price: The agreed price (precio pactado) for the main contract, stated in CLP or UF. The arras amount as a percentage of the total price determines whether the forfeiture/double-return mechanism is commercially proportionate — the Corte Suprema de Chile has upheld that arras representing 10% of the purchase price are a reasonable pre-liquidated penalty (pena convencional) for real estate transactions under Código Civil Art. 1535.

Type of Arras: An express declaration of whether the arras are: (1) arras confirmatorias (arras as evidence of contract conclusion under Art. 1803 first part) — indicating that the main contract has been concluded and neither party can withdraw without breach; or (2) arras penitenciales (arras as a retraction penalty under Art. 1803 second part) — indicating that either party may retract on the terms specified, with the payer forfeiting the arras and the recipient returning double. The distinction must be explicit to avoid disputes.

Retraction Deadline (Plazo de Retractación): The agreed deadline by which either party must retract, if retraction rights are included. Under Art. 1804 of the Código Civil, the retraction right ceases when the main contract is fully performed or all preliminary formalities are completed. For real estate transactions, the retraction deadline is typically tied to the execution of the final compraventa deed before the Notario Público — the buyer cannot retract after signing the escritura de compraventa.

Forfeiture and Double-Return Rules: An express statement of the consequences of retraction — if the buyer (payer of arras) retracts, the buyer loses (pierde) the arras entirely; if the seller (recipient of arras) retracts, the seller must return double the arras (restituye el duplo) to the buyer. This double-return obligation under Art. 1803 must be clearly stated to prevent the recipient from simply returning the amount received without the penalty element.

Application to Purchase Price: Whether the arras will be applied (imputadas) to the purchase price upon completion of the main contract, or whether they represent an additional payment on top of the agreed price. Standard Chilean real estate practice is for arras to be imputadas al precio — the buyer's payment of arras is credited against the total purchase price when the compraventa deed is signed.

Notarization: For real estate transactions involving a promesa de compraventa under Código Civil Art. 1554, the promise agreement (and typically the accompanying Recibo de Arras) must be in writing, though notarisation before a Notario Público is not legally required for the promesa. However, notarisation of the Recibo de Arras significantly strengthens the evidentiary value of the payment acknowledgement and facilitates enforcement before the Juzgado de Letras en lo Civil if the seller fails to return double arras upon retraction.

forms-legal.com provides this Earnest Money Receipt Chile template as a reference document for real estate buyers and sellers, vehicle purchasers, and parties to high-value service contracts. For property transactions, both parties should engage a licensed abogado and a notario público to ensure compliance with Código Civil Art. 1554 requirements for the promesa de compraventa and Ley de Impuesto a las Ventas y Servicios (IVA) obligations applicable to habitual sellers.