If you have set your heart on purchasing a property in Spain, whether for personal use of investment purposes then it is important that you carry out the proper due diligence before making any commitments.
If you are unsure what this may entail, you may want to read on for our advice on what checks you should perform when purchasing your property.
What risks can you face if due diligence is not carried out?
Before looking at what due diligence checks should be performed before purchasing a Spanish property it may be prudent to have an idea of what risks you may face should to choose to forgo the proper checks.
Spain has been notoriously lax in the past when it comes to building regulations, meaning many properties are not up to scratch or no longer meet their original specs.
With the government beginning to crack down on this over the last few years, there is always the risk that the property you purchased may not be up to code, which may cause major headaches in the future.
Should you decide to sign before these checks have been carried out, you will likely find that it is a costly move if you then have to pull out later on, as you will forfeit your 10% deposit.
Hiring a lawyer
The best way to ensure your Spanish property purchase goes off without a hitch is to enlist the services of a reputable law firm based in the region you are buying in.
A lawyer can help you work through the various steps you face when purchasing your property and can represent you on your behalf in your absence.
While your estate agent is likely to offer to introduce you to a local law firm, it is best to try and avoid this and try to find an independent lawyer, who is unlikely to suffer from a conflict of interest.
Of course you will also want a lawyer who specialises in Spanish property law (derecho inmobiliario). These specialists will be used to dealing with the ins and outs of buying a property, which can be invaluable should any problems arise.
On top of this don’t forget to find a lawyer who can speak fluent English, as it can be difficult enough to follow all the jargon even when it’s not in Spanish!
What checks will the lawyer carry out?
Upon hiring a lawyer you can expect them to begin carrying out their due diligence checks on the property you intend to purchase.
There are various important elements of a property purchase that should be checked before concluding a deal, which include:
- That the property is actually owned by the seller
- That there are no outstanding charges against the property, such as mortgages or other debts
- That the property conforms with all zoning and building regulations in the ayuntamiento (town/city hall)
- That there are no unauthorised additions to the building
- There are no other obligations/covenants regarding the property
It is important to note that the checks required for a commercial property are likely to be more complex, with parking, environmental and access issues also needing to be checked.
Completing your purchase
When both the vendor and buyer are happy that all due diligence has been carried out you will be ready to make your way to the local notary office to sign on the dotted line.
However you may still want to retain the services of your lawyer for a little longer to check that the registration process has been completed and you have a copy of all the various document and invoices in your possession.
After all this has been completed, all that is left to do is get ready for living your new life in Spain!