Property due diligence checklist: everything to check before you sign

Property due diligence is the set of checks a buyer should carry out on a property before signing any legally binding document. Its purpose is to make sure that what you're buying is exactly what you think you're buying: in legal, physical, planning and financial terms.

Most of the problems that arise after a property purchase stem from due diligence that was incomplete or skipped altogether. The seller of the flat who didn't mention the €15,000 special levy already approved. The commercial premises whose planning use doesn't allow the intended business. The inherited home with a usufruct still in force that the heir "didn't know about". All of those problems existed before the signing. Proper due diligence would have spotted them.

The legal block: what the Land Registry and the Catastro must confirm

The legal check is the first block and the most critical. It must be done before anything else, because an insurmountable legal problem makes all the rest of the due diligence irrelevant.

• Nota Simple from the Land Registry: The most important document. This extract from the Registro de la Propiedad confirms who the legal owner is, the description of the property (floor area, boundaries), the existing charges (mortgages, usufructs, seizure orders, cautionary notices, conditions subsequent) and their order of priority. Without an up-to-date Nota Simple (issued less than 7 days before signing), nothing gets signed. Available online at registradores.org within 24-48 hours.
• Catastro check: Check that the description in the Catastro (Spain's property cadastre) matches the one in the Land Registry. Significant discrepancies in floor area or ownership are a warning sign: they may point to undeclared works, extensions that were never legalised or errors that complicate the transfer.
• Outstanding mortgage charges: If the property has a mortgage, check the outstanding balance. In a standard sale, the mortgage is cancelled with part of the price. Make sure the agreed price covers that balance plus the cancellation costs, or that the seller has additional funds.
• Earlier charges at auctions: If you buy at a court auction, identifying the charges that rank ahead of the mortgage being enforced is the most critical analysis. Those charges are not extinguished by the award: the buyer takes them on. They may be seizure orders from the tax authority (Hacienda), first-ranking mortgages with a high balance or usufructs with priority.
• Usufructs and rights of use and habitation: A third party's lifetime usufruct over the home you're buying can make it impossible to let out for decades. Always check the Nota Simple and, if there is one, quantify its impact before any yield calculation.

The planning block: use, licences and outstanding penalties

The Land Registry reports on ownership and charges, but not on the planning status. For that you have to check with the town hall (Ayuntamiento).

• Compliant planning use: Confirm that the current use of the property (residential, commercial, industrial) is authorised by the municipal plan. This is especially important for commercial premises and mixed-use buildings, where a change of activity may require a licence or be prohibited outright.
• Cédula de habitabilidad, the certificate of habitability (or licencia de primera ocupación, the first occupation licence): It certifies that the home meets the minimum requirements to be lived in. Without a valid cédula it cannot legally be let in many regions. Check that it's valid and, if not, weigh up the cost of renewing it before agreeing the price.
• ITE (Inspección Técnica de Edificios, the building's technical inspection): In buildings more than 50 years old, or according to each municipality's threshold, the building must periodically pass a technical inspection. If the ITE found significant defects (structure, services) and the building hasn't carried out the remedial works, there may be outstanding penalties or restrictions on use. Ask the owners' association for the latest report.
• Penalty or enforcement proceedings: Check with the town hall whether there are any open planning enforcement proceedings against the property. They may be due to works without a licence or unauthorised uses. Whoever buys may inherit the obligation to put things right.

The community block: debts, special levies and the state of the building

The owners' association can be a source of hidden costs the buyer didn't foresee.

• Certificate of debts to the owners' association: Without this certificate, the buyer may take on earlier debts of up to 3 years plus the current year (article 9 of the LPH, Spain's Horizontal Property Act). It's an essential document for the deed. Issued by the property administrator in 1-2 days.
• Minutes of the general meetings for the last 3 years: The minutes record the special levies approved (including those not yet charged but already agreed), ongoing lawsuits, the state of the building's insurance and any major works planned. An investor who signs without reading the minutes may find an €8,000 special levy agreed 2 months before the purchase.
• State of the reserve fund: The LPH requires owners' associations to keep a minimum reserve fund for the unexpected. If the fund is practically zero and the building is old, any urgent repair will be paid for with a special levy.
• Exact monthly fee: Confirm the real amount with the administrator, not just with what the seller says. In buildings with a lift, pool, gardens or porter, the community fees can be significantly higher than what's mentioned.

The physical block: what the viewing must confirm

A 20-minute viewing with the seller standing beside you isn't enough for a €100,000-300,000 deal. These are the specific points a serious inspection must check:

• Damp: The most frequent problem in Spain's housing stock and the most costly to fix. Check the lower corners of exterior walls, bathroom and kitchen ceilings, the walls below windows and the basement if there is one. White salt stains (efflorescence), bubbles under the paint or a damp smell are unmistakable signs.
• Condition of the roof: For top-floor flats, visually check the condition of the roof and ask the owners' association whether there are any known leaks. A roof in poor condition can require an investment of €20,000-80,000 in a medium-sized building.
• Electrical installation: Check that it's up to date (a consumer unit with circuit breakers and an RCD, not the old fuse box). Flats with obsolete wiring need between €3,000 and €6,000 to comply with the REBT (Spain's low-voltage electrical regulations).
• Plumbing: In flats more than 30 years old, lead or cast-iron pipes are common and may need replacing entirely. Also check the condition of the water heater or boiler.
• Orientation and ventilation: A flat with good cross-ventilation and a favourable orientation has a much higher market value and is much more comfortable to live in. In hot cities (Seville, Murcia, Alicante) this factor is particularly relevant to future rental demand.
• Condition of the visible common areas: The entrance hall, the stairs, the lift and the courtyard give a very accurate picture of the building's general state of maintenance. A well-maintained building rarely hides major structural problems.

The tax block: taxes that affect the purchase

• IBI status: Check that the owner is up to date with the IBI (the local property tax) for recent years. Unpaid IBI can lead to a seizure order on the property, which the new buyer inherits.
• Plusvalía municipal: This tax (the local tax on the increase in the value of the land) falls on the seller, but in practice who pays it is negotiated. If the buyer is going to take it on, it has to be quantified before agreeing the final price.
• IVA vs ITP: Resale homes are taxed with ITP (the property transfer tax, 6-10%). First sales by a developer are taxed with IVA (Spanish VAT: 10% for homes, 21% for garages and commercial premises). At auctions where the debtor was the developer, you need to establish the correct tax regime before calculating the total cost of acquisition.

The quick checklist for deals with short deadlines

In off-market deals or auctions where time is limited, this is the bare minimum that must not be skipped under any circumstances:

1. Nota Simple from the Land Registry (basic legal check, within 24-48 hours)
2. Catastro check (online, instant)
3. Certificate of debts to the owners' association
4. Check that the IBI is paid up
5. Physical viewing of the property

Everything else can be completed after the contrato de arras (the deposit contract) but before the final deed, provided the arras include termination clauses in case serious problems come to light in the extended due diligence.

Related resources: If you're analysing a court auction deal where the deadlines are short, the article on how court auctions work explains what to check specifically before bidding. For bank assets where the bank can provide documentation, the guide to bank repossessions covers the specific process. To work out whether the investment is still profitable after all the hidden costs uncovered, the guide on how to calculate real cashflow has the full methodology.