Property Due Diligence in Spain: What Should Be Checked Before Buying?

Buying a property in Spain involves much more than agreeing a price and signing a contract. Before committing to a purchase, it is essential to understand exactly what you are buying and whether there are any legal, planning or financial issues affecting the property.

This is the purpose of property due diligence in Spain.

For international buyers in particular, many of the relevant checks are not immediately apparent from the property itself or from the information provided by the estate agent. The Land Registry, Cadastre, Town Hall and Community of Owners may each contain information that needs to be reviewed and, in some cases, compared.

A proper due diligence process therefore goes beyond confirming that the seller owns the property. Its scope should be adapted to the particular transaction, the type of property and the buyer’s intended use.

What Is Property Due Diligence in Spain?

Property due diligence is the legal review carried out before completing the acquisition of a property, and ideally before the buyer becomes unconditionally committed to the transaction.

The objective is to identify potential legal issues early enough for them to be addressed in the purchase documentation or resolved before completion.

Depending on the property, this may involve reviewing ownership, registered charges, planning status, cadastral information, Community of Owners documentation, existing leases and other matters that could affect the acquisition or future use of the property.

For this reason, due diligence should normally begin as soon as the buyer has identified a property and before substantial deposits are committed without appropriate legal protection.

1. Ownership and Land Registry Checks

One of the first steps is obtaining and reviewing current information from the Spanish Land Registry (Registro de la Propiedad).

The Registry provides information concerning the registered property, its owner and the nature and limitations of the rights registered over it.

The review should confirm, among other matters:

• that the seller is the registered owner and has the legal capacity to sell;
• the registered description of the property;
• existing mortgages;
• attachments or embargoes;
• easements;
• restrictions or limitations affecting the property; and
• other registered rights that may affect the acquisition.

The existence of a mortgage, for example, does not necessarily prevent a purchase. However, the transaction must be structured so that the outstanding debt is repaid and the mortgage is properly cancelled.

The important point is to identify these matters before completion and provide for them correctly in the transaction.

2. Land Registry and Cadastre: Do They Match?

Another important element of property due diligence in Spain is comparing the Land Registry information with the Spanish Cadastre (Catastro).

They are different institutions and discrepancies between them are not unusual.

Differences can relate to:

• surface area;
• boundaries;
• plot configuration;
• constructed area;
• property use; or
• buildings, extensions or other elements appearing in one record but not the other.

A discrepancy does not automatically mean that the property cannot be purchased.

However, its nature and significance need to be understood.

A small measurement difference may have little practical impact, whereas an undeclared extension, an incorrect boundary or a substantial discrepancy in constructed area may require further investigation or rectification.

This can become particularly important where the purchase is being financed, as the buyer’s bank may require certain inconsistencies to be resolved before releasing the mortgage funds.

3. Planning and Building Compliance

The fact that a construction physically exists – or even appears in the Cadastre – does not necessarily establish that every part of it was properly authorised from a planning perspective.

Depending on the property and its location, the legal review may therefore need to examine:

• building licences;
• planning permissions;
• first occupancy or equivalent documentation;
• declared new-build deeds;
• extensions;
• swimming pools;
• enclosed terraces;
• changes of use; and
• other alterations carried out after the original construction.

This is particularly relevant with detached houses, rural properties and properties that have been altered substantially over time.

Where an inconsistency is identified, further enquiries with the Town Hall or assistance from an architect or other technical professional may be necessary.

Again, finding an irregularity does not necessarily mean abandoning the purchase. Depending on the circumstances, it may be possible to regularise the situation, require the seller to resolve it before completion or protect the buyer contractually.

The important point is that the buyer understands the issue before becoming committed to the acquisition.

4. Community of Owners

When purchasing an apartment or another property forming part of a Community of Owners (Comunidad de Propietarios), the review should not be limited to confirming that the seller has paid the monthly community fees.

The documentation can reveal information that materially affects the cost or future enjoyment of the property.

Depending on the transaction, it may be appropriate to review:

• the certificate confirming the seller’s community debt position;
• recent Community meeting minutes;
• approved special assessments (derramas);
• significant works under consideration;
• Community statutes;
• restrictions affecting the use of the property; and
• relevant disputes or building-wide issues.

This is particularly important because a property may appear perfectly satisfactory while the Community has already approved significant expenditure for façades, roofs, lifts or other common elements.

The applicable Horizontal Property legislation also gives certain community debts a particular connection to the property, making this more than a simple administrative check.

5. Is the Property Vacant, Rented or Occupied?

The buyer should also establish the actual occupancy status of the property.

If it is rented, the lease must be reviewed carefully. Relevant considerations include the date of the agreement, the identity of the parties, its duration and the rights that may continue following the sale.

A buyer should never assume that acquiring the property automatically gives them the right to terminate an existing tenancy simply because they intend to use the property themselves.

The consequences depend on the particular lease and the applicable legal regime.

This is especially important where the buyer intends to move into the property immediately after completion.

If the property is expected to be delivered vacant, that obligation should also be properly reflected in the contractual documentation.

6. ITE, IEE and Technical Documentation

For properties located in older buildings, additional building documentation may need to be reviewed.

Depending on the municipality, age and type of building, this may include the Inspección Técnica de Edificios (ITE), Informe de Evaluación del Edificio (IEE) or equivalent documentation.

An unfavourable inspection does not necessarily prevent a sale.

However, it may reveal required works or future costs that should be understood before purchasing.

It is also important to distinguish between legal due diligence and a technical survey.

A lawyer reviews the legal and documentary position of the property. Where there are concerns regarding structural condition, damp, installations, construction quality or other physical defects, a qualified architect or surveyor may also be required.

7. Reservation and Arras Contracts

Due diligence and contractual protection should work together.

In Spain, it is common for a buyer to sign a reservation agreement and subsequently a private purchase or arras contract before completion at the Notary.

The terms of these documents matter.

Before signing, consideration should be given to:

• the deposit being paid;
• the agreed completion date;
• what documentation the seller must provide;
• how identified legal issues will be resolved;
• whether completion depends on mortgage financing;
• consequences of default by either party; and
• whether appropriate protection exists if due diligence identifies a material problem.

The completion date itself is generally negotiated between the parties rather than imposed by a standard legal timetable.

Where financing is required, sufficient time should also be allowed for the valuation, mortgage approval and mandatory banking formalities.

Due diligence is therefore not separate from the contract: the findings of the legal review should determine what protections need to appear in it.

8. Source of Funds and Banking Coordination

International buyers should also consider the financial side of the transaction well before completion.

Spanish banks and other professionals involved in property transactions are subject to anti-money laundering requirements. Buyers may therefore need to provide documentation demonstrating both their identity and the legitimate origin of the funds used for the purchase.

Depending on the circumstances, this may include:

• bank statements;
• evidence of savings or investments;
• sale agreements relating to other assets;
• inheritance documentation;
• employment or business income documentation; or
• other evidence explaining the source of the purchase funds.

Leaving this until shortly before completion can create unnecessary delays.

Where funds are being transferred internationally, early coordination with the Spanish bank is particularly advisable so that the required compliance checks can be completed before the purchase funds are needed.

See also: 👉 How long does it take to a buy a property in Spain?

9. Completion Before the Notary

Once the due diligence has been satisfactorily completed and any issues have been resolved or contractually addressed, the transaction can proceed to completion.

The public deed of sale (escritura pública de compraventa) is normally executed before a Spanish Notary.

At this stage, the lawyers should already have coordinated matters such as:

• the final purchase price and payments;
• cancellation of the seller’s mortgage where applicable;
• any required retentions;
• documentation to be delivered by the seller;
• allocation of possession and keys; and
• any outstanding contractual obligations.

For international buyers who cannot attend in person, completion may also be carried out through a properly drafted power of attorney.

10. What Happens After Completion?

Signing the deed is not necessarily the end of the legal process.

After completion, the acquisition must generally be followed by:

• payment and filing of the applicable purchase taxes;
• submission of the deed to the Land Registry;
• monitoring registration of the buyer’s title;
• changes to utilities where required;
• notification or coordination with the Community of Owners; and
• completion of any other outstanding administrative matters.

If the seller is a non-resident, specific tax withholding obligations may also arise for the buyer.

Proper post-completion follow-up ensures that the transaction is not merely signed but fully completed from a legal and registration perspective.

See also: 👉 What is the REAL cost of buying a property in Spain?

What Happens If Due Diligence Reveals a Problem?

One of the most important points for buyers to understand is that a due diligence issue does not automatically mean that the transaction should be abandoned.

The appropriate solution depends on the problem.

It may involve:

• requiring the seller to rectify an irregularity before completion;
• cancelling an existing charge;
• amending the purchase contract;
• negotiating a retention from the purchase price;
• making completion conditional upon a particular matter being resolved;
• adjusting the completion timetable; or
• in serious cases, deciding not to proceed.

The purpose of due diligence is therefore not simply to produce a list of potential problems. It is to allow the buyer to make an informed decision and structure the transaction accordingly.

Property Due Diligence Should Be Tailored to the Property

There is no single checklist that applies identically to every Spanish property purchase.

The legal review of a recently constructed apartment in Madrid will not necessarily be the same as that required for a rural property in Andalucía, a villa with several extensions, a property currently rented to a third party or a home forming part of an older building subject to significant Community works.

Good property due diligence in Spain therefore requires more than obtaining a standard set of documents.

It requires understanding the property, the buyer’s intended use, the financing structure and the specific risks identified during the transaction.

For international buyers unfamiliar with the Spanish legal and administrative system, carrying out these checks before becoming unconditionally committed to the purchase can prevent problems that are considerably more difficult, and expensive – to resolve after completion.

If you are considering buying property in Spain, our team can assist with the legal due diligence, contractual documentation and completion of the acquisition from start to finish.