The Due Diligence Checklist for Buying Property in Spain: What Your Lawyer Should Verify
Due diligence is the most important pre-purchase step in any Spanish property transaction. A thorough due diligence identifies title defects, urban-planning irregularities, undisclosed debts, and other issues that could affect the buyer’s position after the purchase. The Spanish system places the burden of due diligence on the buyer (and, in practice, on the buyer’s lawyer) — there is no equivalent of a UK solicitor’s undertaking or of a US title insurance company verifying title independently. The buyer who proceeds without a thorough due diligence is exposed to all the defects that the property may have. This article provides the standard due diligence checklist used by experienced Spanish real estate lawyers, with explanations of each item and its practical importance. A dedicated Spanish real estate lawyer performs each verification and produces a written report for the buyer before the option contract is signed.
Title verification at the Land Registry
Title verification is the foundation of any property due diligence. The lawyer obtains a nota simple from the Land Registry, which shows the current registered ownership, any mortgages or other charges, any pending litigation, and any other relevant entries. The nota simple is the public record of the property’s legal status and is the most authoritative source of information. The detailed methodology is described in our due diligence guide.
The lawyer verifies that the seller is the registered owner of the property, that the property description in the Registry matches the physical property being sold, that there are no undisclosed mortgages or charges, and that there are no easements or other limitations that would affect the buyer’s use of the property. Discrepancies between the Registry and the reality (cadastral discrepancies, surface area differences, undocumented modifications) are common and require attention.
Urban-planning verification
The urban-planning verification confirms that the property complies with the local urban-planning regulations (PGOU) and that all the modifications and extensions are properly licensed. The lawyer obtains a certificate from the town hall confirming the urban-planning status of the property, the existence of the licence of first occupation (or cédula de habitabilidad), and the absence of any pending urban-planning procedures.
Urban-planning irregularities are one of the most common issues affecting Spanish properties, particularly older properties and properties in rural areas. Common irregularities include: extensions built without licence; pools or garages added without licence; changes of use (e.g., commercial premises converted to residential use without proper licence); properties built in areas where building was not authorised. Each irregularity has its own legal status and its own implications for the buyer.
Cadastral verification
The cadastre (Catastro) is the administrative register of all real estate in Spain, maintained by the Ministry of Finance. The cadastre records the physical description of the property (location, surface area, construction details, cadastral value). The lawyer verifies that the cadastral description matches the Registry description and the physical reality. Discrepancies between the cadastre and the Registry must be resolved before the purchase (or addressed in the contract) because they affect the property tax calculation, the regional reference value used for ITP, and other administrative matters.
The cadastral value is also used as the basis for the IBI municipal property tax. A property with an outdated cadastral value (typically lower than market value) generates lower IBI. The buyer should be aware that cadastral revaluations can occur periodically and may increase the IBI burden in future years.
Debt verification: IBI, plusvalía, community fees
The lawyer verifies that the property is up to date with the following debts: IBI (municipal property tax) for the current year and the previous years (debts up to four years old can survive the transfer); plusvalía municipal (the local tax on land value increase) for any prior transfer that has not been paid; community fees (for properties in a community of owners, with debts up to two years surviving the transfer); utility bills (electricity, water, gas).
The certification of community fees is obtained from the community administrator. The certification of IBI and plusvalía is obtained from the town hall. The certifications must be current (not more than 3 months old) at the date of the purchase. Any debts identified should be deducted from the purchase price or resolved by the seller before the purchase.
Mortgage verification
If the property has a mortgage, the lawyer verifies the outstanding balance and arranges for the mortgage to be cancelled at or before the purchase. The standard procedure is for the buyer to deliver a bank cheque for the outstanding mortgage amount directly to the seller’s bank at the time of signing the public deed, with the bank issuing a confirmation of cancellation and the lawyer subsequently filing the cancellation deed at the Land Registry. The detail of mortgage processes is set out in our mortgage guide for non-residents.
In some transactions, the buyer subrogates into the seller’s mortgage instead of cancelling it. Subrogation can save the buyer the cost of opening a new mortgage but requires the bank’s agreement and may not produce the optimal financing terms. The lawyer advises on whether cancellation or subrogation is preferable in the specific case.
Energy efficiency certificate
The energy efficiency certificate (certificado de eficiencia energética) is mandatory for the sale of any property in Spain. The seller must provide a current certificate (less than 10 years old) at the time of the public deed. The certificate rates the property’s energy efficiency on a scale from A (most efficient) to G (least efficient) and provides recommendations for improvement.
The energy efficiency certificate is informational and does not affect the validity of the sale, but the lack of a current certificate can result in a penalty for the seller. The buyer should request the certificate as part of the due diligence and verify that it is current. For properties without a current certificate, the seller should arrange for a new one before the sale.
Tourist licence verification (where applicable)
For properties marketed with a tourist licence (or that the buyer intends to use as a short-term rental), the verification of the tourist licence is essential. The licence status, the conformity of the property with the licence, the absence of sanctions, and the transferability of the licence to the new owner are all critical points. Detailed treatment is in our guide to tourist licences in Andalusia.
For properties without a tourist licence that the buyer wants to operate as a tourist rental, the lawyer verifies whether a new licence can be obtained. In municipalities with restrictions on new licences (Málaga capital, parts of Barcelona, Mallorca), the inability to obtain a new licence is a material restriction that should be reflected in the price.
Community of owners status
For properties in a community of owners (most apartments and many houses in urbanizations), the lawyer verifies the community status: existence of restrictive statutes affecting the buyer’s intended use; outstanding community fees; pending litigation between the community and third parties; recent or planned major works that may generate additional community fees; functioning of the community (regular meetings, active president, professional administrator vs. self-administered community).
The certification of the community administrator should include the current monthly fee, any extraordinary fees agreed for major works, any outstanding debts of the property to the community, and a summary of recent community agreements. The buyer assumes responsibility for community fees from the date of the purchase, including any extraordinary fees agreed before the purchase but payable after.
Search for occupants and tenants
The lawyer verifies that the property is unoccupied or that any tenants have terminated their leases before the purchase. Spanish tenancy law (LAU) provides strong protection to tenants and the buyer of a property with a sitting tenant cannot easily remove them. For long-term tenants, the lease must be respected by the new owner for the remainder of the term plus any compulsory extensions. For short-term tenants, the buyer should require the seller to terminate the lease before the sale.
For unoccupied properties, the lawyer verifies that no third party has any claim to occupation: no separated spouse with usufructary rights, no family member with right of use, no tolerated occupant who could claim occupation rights. The buyer should request a sworn declaration from the seller about the absence of occupation rights, with personal liability of the seller if the declaration is false.
Final action steps
First: engage a Spanish real estate lawyer at the start of the purchase process. Second: provide the lawyer with the basic information about the property (address, cadastral reference, seller details). Third: receive and review the lawyer’s due diligence report before signing the option contract. Fourth: discuss any issues identified in the report with the lawyer and decide how to address them (price adjustment, contract conditions, withdrawal). Fifth: proceed to the option contract and public deed with full understanding of the property’s legal status. For a full consultation on a property purchase, contact our team.
Due diligence is the single most important step in protecting the buyer’s position in a Spanish property transaction. The cost of a thorough due diligence is modest in relation to the value of the property and prevents the great majority of post-purchase problems. The investment in professional due diligence is the best investment in the purchase process.