Due Diligence in Spain

Due Diligence is the process of thorough investigation and verification carried out on a property before buying it, to confirm that what is being sold is truly what it appears to be and that there are no hidden charges, legal or technical defects. As a real estate personal shopper, it is one of the phases where the most value is added for the buyer, because it avoids costly surprises.

In the Spanish real estate context, three main blocks are reviewed:

1. Legal and registry

• Land Registry extract (nota simple): confirms who the real owner is, the description of the property, and whether it has any charges (mortgages, seizures, easements, usufructs, annotations).

• Status of charges and debts: outstanding mortgage, seizures, debts with the homeowners' association.

• Consistency between what the Land Registry states, the Cadastre, and the physical reality of the property (square metres, boundaries, divisions).

• Tenancy situation: whether it is rented, occupied, or subject to any right of first refusal/withdrawal (tanteo/retracto).

2. Urban planning and technical

• Urban planning status: that it is urban/legal land, with no urban planning enforcement proceedings, and no works without a licence or outside planning regulations. This is key due to old buildings or non-legalised extensions.

• Certificate of occupancy / first occupation licence.

• Energy performance certificate (mandatory to sell).

• State of conservation: structure, installations, damp, Technical Building Inspection (ITE) where applicable due to age.

3. Economic and tax

• Being up to date with property tax (IBI), waste collection fees, and utilities.

• Outstanding or approved debts or special levies (derramas) in the community.

• Verifying that there are no capital gains taxes or other taxes that could affect the transaction.