Due Diligence when Buying Property
This guide details the investigation and verification process you must undertake before buying a property in Spain to ensure a surprise-free investment.
What is Real Estate Due Diligence?
Due diligence is the process of comprehensive investigation and verification that a buyer (or their legal representative) carries out before formalizing the purchase of a property. Its purpose is to identify any potential risks, legal issues, financial burdens, or discrepancies that could affect the property's value or the transaction's viability.
Performing proper due diligence is crucial to protect your investment and avoid future complications. This process allows you to make an informed decision and, if necessary, renegotiate the terms or even withdraw from the purchase if insurmountable problems are detected.
Key Aspects to Verify
Registry Status and Ownership
Verify in the Land Registry who the real owner of the property is and if the description matches reality. An informational report (Nota Simple) is requested.
Liens and Encumbrances
Check if the property has outstanding mortgages, seizures, usufructs, easements, or other charges that could affect your rights as the new owner.
Cadastral Situation
Compare the Cadastre data (cadastral reference, surface area, use) with the Registry and the physical reality. This is important for paying taxes like the IBI.
Urban Planning Status and Licenses
Ensure that the construction is legal, complies with local urban planning regulations, and has the necessary licenses (first occupancy license, certificate of habitability).
Homeowners' Association
If it is an apartment or a villa in a community, verify that the seller is up to date with community fees and if there are any approved or planned special levies.
Payment of Taxes and Utilities
Confirm that the Property Tax (IBI) and other local taxes are paid, as well as utility bills (water, electricity, gas).
Condition of the Property (Technical Inspection)
Especially for second-hand properties, a technical inspection by an architect or surveyor is recommended to assess the structural condition and installations.
Energy Performance Certificate
It is mandatory for the seller to have and provide this certificate to the buyer.
Who Performs the Due Diligence?
Although you can request some documents on your own (like the Nota Simple), the complete due diligence, especially the legal and urban planning part, should be carried out by a lawyer specialized in Spanish real estate law. This professional has the knowledge and experience to interpret the documentation, identify risks, and advise you properly.
At SpainTaxGuide, our team of experts handles this process from start to finish, guaranteeing you peace of mind and legal security in one of the most important economic transactions of your life.
Don't Risk Your Investment
Thorough due diligence is your best insurance when buying a property. Let our experts review every detail for you.
Request a Consultation