The promesa de compraventa in Chile: what it must say, the deposit and what happens if someone backs out

The promesa de compraventa, often translated as a promise to purchase or a preliminary sale agreement, is the contract signed before the deed, when buyer and seller have agreed but something is still missing: the title study, the mortgage, the buyer's RUT or simply the funds. If you are buying from abroad, it is the most important document in the transaction, because it is where the deposit changes hands and where the parties decide what happens if something goes wrong. This guide explains what Chilean law requires for the promesa to be binding, what it means to pay the deposit one way or another, and what to check before you sign.

Short answer: a promesa is only binding if it meets the four requirements of article 1554 of the Civil Code: it must be in writing, the promised sale must be valid, it must set a deadline or condition for signing the deed, and it must specify the sale so fully that only the signing is left. What happens to the deposit if someone backs out depends on how it was paid: as earnest money (arras), as part of the price, or as security for a penalty. A promesa does not, on its own, stop the seller from selling to someone else, and if you buy off-plan from a developer, whatever you pay must be secured by an insurance policy or a bank guarantee.

What the promesa is and why it is used

In Chile, the sale of real estate is not complete until it is signed as a public deed (escritura pública), and the buyer only becomes the owner when that deed is registered with the Real Estate Registrar (Conservador de Bienes Raíces). The promesa is the step before. It transfers nothing: it binds both parties to sign the sale by the agreed date, or when the agreed condition is met.

It buys time without losing the deal. While the promesa is in force, the buyer reviews the title, arranges financing, obtains a RUT and prepares a power of attorney if they will not be in Chile, and the seller cancels any existing mortgage or gathers missing documents. A well-drafted promesa tells each side what it has to do and by when. A badly drafted one leaves the deposit in limbo.

The four requirements for a binding promesa

The Civil Code starts from a strict rule: a promise to enter into a contract creates no obligation at all unless four conditions are met. If even one is missing, neither party can force the other to sign the deed.

• It must be in writing. A verbal promise, or an exchange of messages that never became a signed contract, will not do.
• The promised sale must not be one the law declares ineffective. For example, you cannot validly promise to sell something the law prohibits selling.
• It must contain a deadline or a condition that fixes when the deed is signed. The safest option is a date, or a condition with an outside date. A promesa that says the deed will be signed "when the buyer obtains the loan", and nothing more, invites an argument about whether that moment ever arrived.
• It must specify the sale so fully that only the signing is left. The promesa must identify the property by its registration at the Registrar and its tax roll number, and state the price, the payment terms and the other essential conditions. If anything substantial still needs to be negotiated, this requirement is not met.

Once the four requirements are met, the promesa creates an obligation to do something: sign the deed. If one party fails to perform, the other can ask a court to compel the signing, or to award damages. In addition, every bilateral contract carries an implied condition: if one side fails to perform, the other may choose between enforcing the contract and terminating it, with damages either way.

The form: public deed or signatures before a notary

The law only requires the promesa to be in writing. In practice it is signed before a notary, either as a public deed or as a private document with notarized signatures, because that leaves a reliable record of who signed and when. There is one case in which the law does impose the form: when a developer promises to sell a home that does not yet have its final municipal approval (recepción definitiva) and receives part of the price, the promesa must be a private document authorized before a notary, with the guarantee explained below.

An attorney in fact can sign the promesa for you. The Civil Code provides that a general mandate only covers acts of administration, and that anything beyond that requires a special power. The power of attorney should therefore state expressly that your representative may sign the promesa and the sale, pay or receive the price and agree the terms. If you sign it outside Chile, you can grant it as a public deed at a Chilean consulate, which is then legalized at the Foreign Ministry in Chile, or before a local notary with an apostille; if it is not in Spanish it is translated, and before the deed it is protocolized at a Chilean notary. For a purchase we recommend the consular route, as we explain in our guide to signing a power of attorney abroad for use in Chile.

Signing a promesa does not trigger stamp tax, because that tax applies to loan transactions, not to promises.

The deposit: earnest money, part of the price or a penalty

When the promesa includes a deposit (the pie), what happens to that money if someone backs out does not depend on what it was called in conversation, but on how it was written. There are three different arrangements, and you should know which one you are agreeing to.

Earnest money that allows withdrawal. When a sum is handed over as a pledge that the contract will be signed, the law presumes that either party may back out: the one who paid the arras forfeits them, and the one who received them must return double. If no period for withdrawal was set, that right is lost two months after the agreement, or earlier if the deed has been signed or delivery has begun.

Earnest money as part of the price or as a sign of agreement. If the contract states expressly that the deposit is paid as part of the price, or as a sign that the parties have reached agreement, there is no right to withdraw. The rule worth remembering is the reverse: if none of this is stated in writing, the law presumes the parties kept the right to back out.

A deposit secured by a penalty clause. The parties agree that whoever fails to perform will pay a penalty, which may be the loss of the deposit for the buyer or an equivalent sum for the seller. Before the defaulting party is formally in default, only performance can be demanded; after that, the other party may claim performance or the penalty, but not both, unless the contract says so. Nor can it claim the penalty and damages on top, unless the contract expressly allows it. And a disproportionate penalty can be reduced by the court, so an exaggerated figure does not always protect you more.

These rules were written into the Civil Code with the sale itself in mind, and how they apply to a promesa has been debated. The best protection is a promesa that spells out in what capacity the deposit is paid and what happens to it in each scenario.

What a promesa does not do: stop the seller from selling to someone else

A promesa creates personal obligations between buyer and seller. It gives the buyer no right over the property itself. If the seller, despite the promesa, sells to a third party and that sale is registered first, the third party becomes the owner, and the promised buyer's claim is against the seller: the agreed penalty or damages, not the property.

Some promesas add a prohibition on selling in favor of the buyer, which can be registered with the Registrar. That registration makes the promesa public, and anyone who studies the title will see it, but it is not an absolute lock, and its effect against third parties has been debated in the courts. Real protection lies in not handing over more money than necessary before the deed, and in keeping whatever you do pay in the notary's custody until the purchase is registered in your name. We explain how that custody works in our guide to closing a property purchase in Chile.

Buying off-plan from a developer

For homes, offices and shops that do not yet have final municipal approval, Chile's General Law of Urbanism and Construction offers a protection that does not exist between private parties. If the seller is a company in the real estate business, or whoever builds or commissions the building, and the buyer pays all or part of the price under the promesa, that promesa must be:

• a private document authorized before a notary, and
• secured by an insurance policy or a bank guarantee accepted by the buyer, for an amount equal to what the buyer paid.

The guarantee stays in force until ownership is registered in the buyer's name, and for as long as the property carries encumbrances or prohibitions arising from the seller's outstanding obligations. Notaries may not authorize the promesa unless the guarantee is in place. The law allows two alternatives for the part of the price not secured this way: placing it in a savings account the buyer cannot withdraw from, or in term deposits in the seller's favor held in the notary's custody until the sale is signed and registered.

If a developer asks for a deposit on an off-plan apartment and does not offer the policy or the guarantee, stop before you wire anything. If the seller is a company that sells homes on a regular basis, also check how VAT applies, which we cover in our guide to VAT on new homes in Chile.

What to check before you sign

• That the seller is the registered owner, with a current copy of the ownership registration, and that the property is identified by its page, number, year and Registrar, as well as its tax roll number. If the seller is married, find out whether the spouse needs to sign.
• A way out if the title study finds a problem. The promesa should say what happens to the deposit if the title review is not satisfactory. Without that clause, walking away becomes a lawsuit.
• The price, the currency and the payment terms. If the price is in UF, the inflation-indexed unit used in Chilean contracts, state which day's value applies. You can look up today's UF and dollar values with our tool.
• A realistic deadline for the deed that allows for the mortgage, the cancellation of the seller's mortgage and, if you live abroad, the power of attorney and the RUT.
• Who pays each cost: notary, Registrar, mortgage cancellations and professional fees.
• Handover: the date, the condition of the property, and property tax and condominium fees paid up to that point.
• An address in Chile and an email address for notices, especially if one of the parties lives abroad.

The full list of certificates to request before any money moves is in our guide to the checks before you wire the money.

If you are buying from abroad

You will need a Chilean RUT to sign the deed of sale. It is requested online from the tax service (SII) by an attorney in fact domiciled or resident in Chile, under a power of attorney you sign in Chile, or in your home country with an apostille or at a Chilean consulate followed by legalization at the Foreign Ministry in Chile; once the application is filed, it takes 3 to 5 business days. We explain the procedure in our guide to getting a Chilean RUT without traveling. It is best to apply as soon as the promesa is signed, or before; it is the same procedure a tourist follows, for example, to buy a car in Chile.

If the deposit or the price comes from abroad and the transaction is USD 10,000 or more, the Central Bank's rules require the funds to come in through the formal exchange market and the transaction to be reported. And if you plan to rent the property out after you buy it, check first how that income is taxed, in our guide to renting out property in Chile from abroad.

Frequently asked questions

Does a promesa de compraventa have to be signed before a notary?

The law only requires it to be in writing, but it is usually signed before a notary so there is a reliable record of the signatures and the date. When a developer promises to sell a home without final municipal approval and receives part of the price, signing before a notary and providing the guarantee are mandatory.

Can I get my deposit back if the title study goes badly?

It depends on what the promesa says. If it includes a clause allowing you to walk away when the title study is not satisfactory, you recover the deposit as agreed. If it does not, the question falls under the general rules and can end up in court.

What happens if the seller refuses to sign the deed?

If the promesa meets the four legal requirements, you can sue for performance, meaning the signing of the deed, or for termination of the promesa, with damages. If a penalty clause was agreed, you can claim the penalty instead of damages.

Can someone sign the promesa for me?

Yes, with a special power of attorney that expressly authorizes them to sign the promesa and the sale. If the power is granted outside Chile, it must carry an apostille or, if it was signed at a Chilean consulate, be legalized at the Foreign Ministry in Chile; it is also translated if it is not in Spanish and protocolized at a Chilean notary before the deed.

Is the promesa taxed?

It does not pay stamp tax. Taxes and costs arise with the deed of sale and, if there is financing, with the mortgage loan.

How we can help

At Terreno en Regla we draft and review promesas de compraventa, carry out the title study before you pay the deposit and, if you are buying from abroad, obtain your RUT and prepare the power of attorney so someone can sign for you. If the promesa has already been breached, our civil litigation team can assess the available claims. Write to us with the property details and where the negotiation stands. You can find every way to reach us on our contact page.