Investment approach
Property Project Disputes in Spain: Court, Arbitration, Mediation
Since 3 April 2025, a documented attempt to settle is required before suing in a civil or commercial dispute. The routes left are court, arbitration (if the contract provides) and mediation.
A property project dispute in Spain is resolved in one of three ways: court, arbitration or mediation. Since 3 April 2025, under Ley Orgánica 1/2025, most civil and commercial disputes require an attempt at settlement through "medios adecuados de solución de controversias" (MASC, appropriate dispute resolution methods) before suing, with proof attached to the claim. Arbitration is possible only with the parties' written agreement.
What changed on 3 April 2025
Ley Orgánica 1/2025 made an out-of-court settlement attempt a condition for a claim to be admitted (requisito de procedibilidad) in civil and commercial cases. The MASC listed include mediation, private conciliation, an independent expert's opinion, a confidential binding offer, collaborative law and direct negotiation. A document confirming the attempt is attached to the claim. There are exceptions (including protection of fundamental rights and interim measures); whether an exception fits your dispute is for an abogado (lawyer) to decide.
For a project this means: every letter to the contractor or seller with a demand and an offer to negotiate is now also evidence. Correspondence and meeting minutes should be kept as future exhibits to a claim.
Three routes: what to compare
| Criterion | Court | Arbitration | Mediation |
|---|---|---|---|
| Basis | The law, jurisdiction | A written agreement of the parties (Ley 60/2003, art. 9) | Voluntary participation (Ley 5/2012, art. 6) |
| Who decides | A judge | Arbitrators chosen by the parties | The parties themselves, with a mediator |
| Outcome | A court judgment, appeal | A laudo (arbitral award) with res judicata force (art. 43); challenge only on a closed list of grounds | An agreement; enforceable once notarised (art. 23) |
| Statutory time limit | No single limit | Unless the parties agree otherwise: 6 months after the response to the claim, extendable by up to 2 months (art. 37) | As short as possible; if it is a condition for admitting a claim, no more than three months (art. 20) |
| Appeal | Yes | Only an annulment action (acción de anulación) within two months (art. 41) | There is no decision to appeal |
What about court timelines
The CGPJ (General Council of the Judiciary) publishes estimates of average case duration by court level in tables, but I could not confirm a reliable figure for Barcelona and your type of dispute, so I do not quote a court timeline. The only time limits that can be stated without caveats are those in the arbitration and mediation laws. Ask your abogado for an estimate for your court and the value of your claim.
Worked example: a dispute with a contractor over defects
Worked example, not a forecast. The contractor hands over the works, and a month later leaks appear. The client demands repair at the contractor's expense, and the contractor refuses.
- Day 0: a written claim with a description, photos and a report from a technical expert, and an offer to meet.
- Up to 3 months: mediation or another attempt under MASC. If it is a condition for admitting a claim, mediation must not run longer than three months.
- If the contract has an arbitration clause, the dispute goes to arbitration: by default up to 6 + 2 = 8 months after the response to the claim, unless the parties or the arbitration rules set a different period. Missing the deadline does not in itself annul the laudo (art. 37.2). If there is no clause, a claim is filed in court with the document showing the MASC attempt attached.
If the contractor sues in court despite an arbitration clause, the objection must be raised in the first ten days of the period to respond (art. 11 Ley 60/2003). It is best not to miss deadlines of this kind.
What kinds of disputes arise in a project
- With the contractor: defects, missed deadlines, the budget. The liability periods of those involved in construction are set by the LOE (Spain's Building Act, art. 17), and insurance questions are covered in the article on insuring a project.
- With the seller: hidden defects, encumbrances, floor area. Prevention: due diligence and a technical report.
- With a project partner or a member of an SL (sociedad limitada, limited company): rights, exit, voting. These are settled in advance, in a shareholders' agreement. Which court is competent for corporate disputes, ask your abogado.
What to put in the contract in advance
- Arbitration or court, and if arbitration, which arbitral institution and which language.
- A mandatory escalation order: first a written claim, then negotiation or mediation.
- The governing law and the place of the proceedings.
- How project documents are kept, including in the digital account.
An arbitration clause is not always better than court: arbitration limits appeals, and that has to be weighed, not accepted by default.
When this article will not help
The article gives a general picture and does not replace a consultation. Disputes over inheritance, taxes and disputes involving a public administration may follow separate rules. For a project with DNPI, the dispute procedure is set by the contract for that specific project: read it in full before signing. The overall picture of a project is in the full guide.
Questions and answers
Can I go straight to court over a dispute with a contractor?
Since 3 April 2025, under Ley Orgánica 1/2025, most civil and commercial disputes require a document attached to the claim showing that you tried to settle (mediation, negotiation or another MASC). There are exceptions, which an abogado checks.
How does arbitration differ from court?
The parties choose the arbitrator, the decision (laudo) is final on the merits and can be challenged only on closed grounds within two months (Ley 60/2003, art. 41 and 43). Arbitration is possible only with the parties' written agreement (art. 9).
How long does mediation last?
The law requires it to be as short as possible, and if it serves as a condition for admitting a claim, no longer than three months (Ley 5/2012, art. 20).
Do I have to agree to mediation?
No. Participation is voluntary (art. 6 of Ley 5/2012), but an attempt to settle under MASC is needed for a claim, and it can be made another way, for example through direct negotiation.
