Buying a property in Spain can be a big personal and financial decision. However, what many foreign buyers do not realise is that, beyond the attractiveness of the property or its location, it is essential to carry out full legal due diligence before signing any contract or handing over a down payment. This often overlooked process is what really makes the difference between a safe purchase and a source of future problems.
Due diligence is the exhaustive legal review carried out by a specialised lawyer to ensure that everything is in order before buying a property. It is not a simple procedure: it is an investigation that covers everything from the property’s registration status to its urban planning situation, including tax, technical, and administrative aspects.
Many properties in Spain have some irregularity, especially in rural areas, older homes, or developments that have not been properly supervised. Some of the most common problems discovered at this stage are:
- Illegal constructions or undeclared extensions: It is common to find properties with enclosed terraces, surface extensions, or swimming pools built without a licence. This can prevent their legalisation or lead to sanctions by the respective local council.
- Urban planning non-compliances: A property may be built on undeveloped or undevelopable land, which limits future renovations or even prevents the registration of the property as legally habitable.
- Charges and outstanding debts: The property could have mortgages, liens, community or IBI (Real Estate Tax) unpaid. These debts do not disappear with the sale and can fall on the new owner if they are not detected in time.
- Lack of a certificate of habitability or licence of first occupation: This document accredits that the dwelling meets the minimum conditions of habitability. Its absence may make it difficult to connect to utilities such as water or electricity or prevent it from being used as a permanent or tourist dwelling.
- Differences between the physical reality and the registry description: It is essential to check that the surface area, boundaries, or annexes such as garages or storage rooms coincide with what is recorded in the Land Registry and the Cadastre.
Due diligence should be carried out by a lawyer who is an expert in Spanish real estate law. Although the notary is involved in the signing of the title deed, his role does not include checking for licences, debts, or planning infringements. That responsibility lies with the buyer, or rather his lawyer.
Ideally, due diligence should be carried out before signing the private contract (Contrato de Arras). Once the contract has been signed and the deposit (normally 10% of the price) has been paid, cancelling the transaction may result in the loss of that amount, unless a cancellation clause has been included for serious legal defects.
Buying a property in Spain without proper due diligence is like buying blind. Everything may be in order, and many times it is, but if there is something irregular, it is better to know before committing yourself.
Having legal advice from the outset is the best investment a buyer can make. It protects not only money but also future peace of mind. And in this type of decision, that is priceless.
