The Due Diligence

  • Last Updated on Saturday, 18 July 2020 15:26
  • Written by Maria Santos Acedo


With Due Diligence, a risk assessment is carried out with "due attention": The legal situation of the property and the possible risks are analyzed. This preliminary analysis plays an important role both in determining the value of the property and in the legal protection of the buyer.






Most of the Spanish lawyers are not only at your side during the purchase process with sellers, notaries, registries, etc., they also take charge of the prior legal inspection of the property. You need to consider if the order form includes the receipt of current extracts from the Land Registry, current graphic descriptions of the Cadastre office, etc., or if you must pay such expenses apart from the fees for the services of the lawyer in question.

Although in any case it is recommended that a specialist carry out this verification, you will find a checklist for the purchase of properties or the Due Diligence below, which contains the most important documents that must be verified before buying.

1. Simple note from the Land Registry:

In the Land Registry all real estate located in Spain can be registered, as well as the charges and rights that fall on them. This note provides all the necessary information about land, property number, description of the property and owner.

ü  Property description:

So that you can be sure of what property you are buying, it is important to compare both the property number and the description of the property with what is established in the purchase contract or offer. If the description does not match the real one, you can check if it can be updated without problems or if the unregistered buildings can be illegal constructions that cannot be legalized later.

ü  Property owner:

Although there is basically no obligation to register real estate in the Land Registry in Spain, the lack of registration or the purchase of people who are not listed as owners (for example, heirs of the registered owner) can cause costly problems.

ü  Registry loads:

The buyer is only responsible for mortgages, usufruct, etc., if these were registered in the Land Registry before the purchase.





2. The cadastral extract:

In addition to the Land Registry, which provides binding information on property and rights, there is another registry called Cadastre. While this record it is only for administrative purposes, an examination is necessary as these data provide information on the exact size of the property, use, year of construction, location and cadastral value.

The property can be located using the cadastral reference number, as well as the postal address:

ü  Property description:

The description of the property in the Cadastre office is a brief summary of the property data relevant to administration. Both the information on the urbanized and underdeveloped area, as well as the registered use (apartment, storage space, commercial premises, agricultural use, etc.) can be compared with that of the Land Registry and with the reality.

ü  Cadastral value:

The cadastral value only appears on the statements requested by the owner, which can also be found in the annual Property Tax (IBI) payment documents. This value depends not only on the aforementioned annual property tax, but also on the tax that will be paid after the purchase.

ü  Protected housing (VPO):

The cadastral statement also shows whether the property is a protected dwelling (VPO). For these properties there are important restrictions in terms of habitability, as well as a fundamental right of first rejection by the corresponding public administration.

3. The owner’s community:

If the cadastral statement shows that we are in front of a house that is part of an owner’s community, it must also be verified if all the pending bills have been paid with the community at the time of the contract. To exclude existing liabilities after purchase, it is advisable to have a certificate issued by the president or administrator of the community, showing that the seller is debt free.

4. The Town Hall:

If there are doubts about the legality of the building, it is advisable to request a corresponding certificate from the City Council on the legality of the building (urban record).

This certificate shows all the structural conditions known to the city government. Therefore, it can be seen if the building permits have been applied for and approved. Whether others may have been requested but rejected or if there are ongoing proceedings against the property or its owner.

5.The Autonomous Community:

Regarding the Autonomous Community in which the property is located, the necessary licenses have to be observed. For example, in the case of renting to tourists (generally for periods less than 2 months), depending on the Autonomous Community, it would be necessary to fulfill several requirements and request the corresponding license.

In addition, in some cases it is advisable to verify the legality of the building at the Autonomous Community level in addition to the certificate of the City Council.

The General Urban Development Plan (PGOU) can be downloaded from the Communities' web pages.

Our law firm will be happy to help you to analyze your specific situation, apply for the appropriate licenses for you, and help you file the relevant tax returns. If you are interested or have specific questions on the subject, we will be happy to assist you by email or phone.


icon santosmMaría Santos Acedo
Lawyer & Partner
Tel: (+49) 05105 60 899 64
Tel: (+34) 951 12 00 69
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