In this article
Property due diligence in Spain is the legal investigation carried out before you commit to a purchase. In the Balearic Islands, where many homes have been extended over decades and planning rules are strict, it is the most important part of the buying process. This checklist summarises what an independent lawyer reviews before a client signs a deposit contract.
Why due diligence matters more in the Balearics
Spain’s Land Registry is reliable, but it only shows what has been registered. It does not tell you whether a swimming pool was built without a licence, whether the community of owners is planning an expensive renovation, or whether the holiday rental licence mentioned in the advert is valid. On islands with limited land, protected rustic areas and a tight rental market, those details can change the value of a property dramatically.
The checklist
1. Ownership and identity of the seller
- Confirm that the seller is the registered owner, or that all co-owners and heirs are signing.
- Check marital status: in some regimes the spouse must consent even if they are not on the title.
- If the seller is a company, verify who has authority to sign.
2. Charges and encumbrances
The *nota simple* from the Land Registry shows mortgages, seizures (*embargos*), easements, usufructs and pre-emption rights. Every charge must be cancelled at completion or accounted for in the price.
3. Registry versus Cadastre
The Registry describes the legal property; the Cadastre describes the physical one for tax purposes. Differences in surface area or boundaries are common and should be corrected, or at least understood, before completion.
4. Planning and building legality
This is where most problems appear in the Balearics. Your lawyer should check:
- That every building, extension, terrace and pool has a licence and a certificate of completion.
- Whether the property is on urban or rustic land, and what can legally be built or renovated.
- Whether there are open infringement proceedings with the town hall or the island council.
- Whether any illegal work is time-barred or still exposed to demolition orders.
Our urban and planning law team reviews municipal files directly with the local authority when needed.
5. Habitation and energy certificates
A valid *cédula de habitabilidad* is needed to connect utilities and to rent the property. An energy performance certificate is mandatory for any sale.
6. Holiday rental licence
If you intend to rent to tourists, the licence must be registered, linked to the specific property and compatible with current regulations. Assumptions here are expensive.
7. Taxes and debts
- IBI (annual property tax) receipts for the last years.
- Community of owners certificate showing no outstanding fees; debts from the current and previous three years can affect the new owner.
- Utilities: water, electricity and rubbish collection accounts up to date.
- Non-resident seller: 3% of the price must be withheld and paid to the tax authorities.
8. Tenants and occupants
Confirm whether the property is let. A tenant with a valid contract may have the right to stay, and in some cases a right of first refusal to buy.
9. Community rules and planned works
For apartments and gated developments, read the community statutes and the minutes of recent meetings. Approved but unpaid works (*derramas*) should be settled by the seller.
10. Utilities, access and boundaries
Particularly in rural fincas: legal road access, water supply (well, cistern or mains), electricity connection and any boundary disputes with neighbours.
When does due diligence happen?
Ideally before signing the *arras* contract and paying the deposit. If time is short, the contract should make the deposit refundable if due diligence reveals problems. Our property lawyers usually complete the core checks within a few working days.
Frequently asked questions
Is the notary responsible for due diligence?
No. The notary verifies identities and registered charges at the time of signing, but does not investigate planning, licences or community matters.
How long does due diligence take?
For a standard apartment, a few days. For a rural finca with several buildings, planning checks with the town hall can take longer.
What happens if a problem is found?
Depending on its seriousness, your lawyer can negotiate a price reduction, require the seller to fix it before completion, add a guarantee or recommend walking away.
Conclusion
Due diligence is not a formality. It is the moment when you find out what you are really buying. A structured legal review protects your investment and gives you a clear basis for negotiating with the seller. Castell.law carries out full due diligence for buyers across Mallorca, Ibiza, Menorca and Formentera, in English, German and Spanish.
