Due Diligence Process for the purchase of properties
Undoubtedly, the purchase of properties is one of the most important decisions we people make, from a financial, personal and family point of view.
For the purpose of avoiding a bad investment or setback and ensuring that the property that is going to be purchased meets the purpose for which it is wanted and does not have contingencies, it is essential to carry out the so-called Due Diligence Process.
This is, in general terms, an investigation process on the property, in order to discover possible hidden risks that may harm the interests of the buyer.
In that sense, we will mention the main aspects that should be considered when carrying out the process:
It is fundamental since it will determine if the seller is duly legitimized.
|Property Transfer History||It is very important because it will help us detect any irregularity in previous transfers that could affect the possession of the property.|
|Review of annotations||It is essential to determine what are the effects on the property.|
|Liens Review||We do not necessarily have to discard a property when it presents liens. The study of these will indicate if the matter can be resolved or not.|
|Cadastral Plan Review||It will confirm the size of the property. When the plan is very old it is recommended to hire an expert to conduct an investigation to confirm the measurements. Likewise, a Certification of the Cadastral Zone, issued by the Registry of Real Property of the National Registry, can be requested.|
|Certification of Municipal Taxes|
The property is responsible for municipal debts, so they must always be kept up to date.
|Land Use Certification|
If there are no constructions. It will indicate if this real estate can fulfill the purpose for which it is intended on acquisition. For example: that a condominium can be built or that a business can be established, etc.
|List of Utilities and payment vouchers|
It is important to confirm that the property is always delivered without debts, or that you have knowledge of these and that they are accepted in the sale.
When there are wells it will be important to confirm that the permits are up to date.
|Visit to the Property|
A visit to the property will always be fundamental. Any number of concerns can arise or be ruled out of it.
|Regulatory Plan Review||Same reason as the Land Use Certification.|
|Identification of possible environmental contingencies||It is important to verify that the property is not affected by environmental issues that impede or limit its exploitation.|
|Confirmation that property is not affected by special laws|
It is important to verify that the property is not affected by special laws that prevent or limit its exploitation.
It is important to clarify that each case has its particularities, so this list is not exhaustive. When all the information is available, we proceed with the preparation of a formal and sustained report, by means of which the business of buying and selling the property will be recommended or not.
At ERP Lawyers we will always recommend carrying out the process in order to guarantee the investment, or at least assume the risks in an informed manner. Under no circumstances is it advisable to proceed with the business without such investigation.
If you need any assitance with real state purchases, get in touch with our team!