Table of Contents
The allure of the Spanish lifestyle—the climate, the culture, and the architecture—is undeniable. However, for buyers coming from the UK, the Netherlands, or Germany, the Spanish conveyancing process can feel unfamiliar. Unlike in some jurisdictions where the process is heavily standardized and liabilities are automatically cleared upon transfer, Spanish property law places a significant onus on the buyer to investigate the property before signing the deed.
Legal due diligence is not merely a formality; it is the firewall that protects your capital. It ensures that the property you are buying exists legally, is owned by the seller, and is free of inherited debts. This guide dissects the critical components of the legal verification process.
1. The Nota Simple Informativa: The Foundation
The most critical document in Spanish real estate is the Nota Simple Informativa. Issued by the Land Registry (Registro de la Propiedad), this document provides a snapshot of the property’s legal status. It is imperative that this document is current—ideally dated within days of your initial checks.
What the Nota Simple Reveals
- Current Ownership: Confirms the seller is the registered owner. If the property is an inheritance that hasn't been registered yet, the sale cannot proceed until that is resolved.
- Property Description: Verifies the classification (urban vs. rustic), boundaries, and total square meterage. Discrepancies here are common and must be addressed.
- Charges and Encumbrances: Identifies mortgages, embargoes (seizures due to unpaid debts), or rights of way that affect the property.
2. Cadastral Consistency (Catastro)
In Spain, there are two bodies that record property data: the Land Registry (legal ownership) and the Catastro (physical description for tax purposes). Historically, these two entities did not communicate effectively, leading to discrepancies where the physical reality of a villa (e.g., 200m² build size) matches the Catastro but differs from the Registry (which might say 150m²).
Your legal team must ensure these records are harmonized. If you purchase a property with significant discrepancies, you may face issues when trying to sell later or when applying for a mortgage. Rectifying this usually involves a 'Declaration of New Work' (Declaración de Obra Nueva) signed before a notary, which may incur additional taxes.
3. Urban Planning and Licensing
Perhaps the most complex area of due diligence involves urban legality. This is particularly crucial for detached villas and properties in rural areas.
The License of First Occupation (LPO)
The Licencia de Primera Ocupación (or Cédula de Habitabilidad in some regions) confirms that the developer built the property in accordance with the original town hall permissions and that it is fit for residential use. Without this license, you cannot legally rent the property as a holiday home, and utility companies may refuse to connect water and electricity services.
Planning Infractions
Your lawyer must obtain a certificate from the local Town Hall confirming there are no open urban infraction files (infracción urbanística) against the property. This is vital if the property has a swimming pool, extension, or terrace that may have been added without a permit. In worst-case scenarios, illegal structures can be subject to demolition orders.
4. Outstanding Debts and Taxes
In Spanish law, certain debts are attached to the property rather than the owner. If you buy a property with outstanding debts, you become liable for them. Due diligence must cover:
- IBI (Council Tax): The Impuesto sobre Bienes Inmuebles is an annual tax. Your lawyer should request proof of payment for the last 4 years.
- Community Fees: If the property is in an urbanization, the seller must provide a certificate from the Community of Owners stating they are up to date with payments.
- Utilities: Unpaid water and electricity bills can result in the removal of the meter, requiring a costly reconnection process.
5. The Private Purchase Contract (Arras)
Once initial checks are satisfactory, you will sign a private purchase contract (Contrato de Arras) and pay a deposit (usually 10%). This is a legally binding moment. It is vital that this contract includes clauses that protect you if further due diligence reveals structural or legal flaws before completion.
Never sign a reservation agreement or pay a deposit until your lawyer has performed at least a basic check on the Nota Simple to ensure the person taking your money is the legal owner.
Conclusion: The Value of Independent Counsel
It is a common misconception that the Spanish Notary (Notario) acts as your lawyer. The Notary is a public official who ensures the taxes are paid and the identity of the signatories is verified, but they do not perform the exhaustive due diligence regarding the property's urban legality or physical condition.
Securing independent legal representation is the single most effective way to safeguard your investment. By rigorously checking the land registry, town hall records, and tax history, you can transition from the dream of buying in Spain to the reality of owning a secure, trouble-free home.
