Are you dreaming of your own home under the Spanish sun or about to make an investment on the Costa del Sol, Costa Camilida or Costa Blanca? During the buying process, you will quickly encounter various industry terms. Two concepts that are crucial for a safe and worry-free purchase are Subject to Mortgage and Due Diligence.

What do these terms mean in Spanish real estate practice, and why are they so important for you as a buyer? Here is a clear explanation.

1. Subject to Mortgage: Buying Conditional on Financing

"Subject to Mortgage" (often referred to in Spanish as sujeto a financiación) literally means that the purchase of the property is conditional upon obtaining a mortgage.

When you make an offer or sign a reservation contract with this clause, the buyer and seller agree that the purchase will only proceed if the bank approves your mortgage application.

Why is this important in Spain?

In Spain, a deposit or reservation fee (reserva or arras) is generally non-refundable. This means that if the purchase falls through because you cannot secure financing, you typically lose your deposit.

By explicitly including the Subject to Mortgage clause in the contract:

• You remain financially protected if the bank unexpectedly rejects the loan.
• You are granted an agreed timeframe (usually 30 to 45 days) to finalize the financing.
• You receive a full refund of your deposit if the mortgage is not approved.

2. Due Diligence: Thorough Legal and Technical Investigation

Due Diligence refers to the crucial research phase in which the buyer's lawyer thoroughly inspects the property before large sums of money are transferred or the final deed is signed.

In Spain, debts and urban planning violations generally attach to the property rather than the individual. A thorough Due Diligence prevents unpleasant surprises after key handover.

What is checked during Due Diligence?

A specialized real estate lawyer checks, among other things:

• Ownership & Debts: Using the Nota Simple, the lawyer verifies whether the seller is indeed the sole rightful owner and whether the property is free of mortgages, liens, or outstanding debts.
• Permits & Licenses: For new builds, is there a valid building permit (Licencia de Obras) and a License of First Occupation (Licencia de Primera Ocupación)? For resale properties, are any extensions (such as a swimming pool or extra room) legally permitted?
• Cadastre & Land Registry: Do the dimensions on the Certificado Cadastral (Cadastre) match the entry in the Land Registry (Registro de la Propiedad) and the physical reality?
• Utility & Tax Payments: Have local property taxes (IBI), rubbish collection fees (Basura), community fees (Comunidad), and utility bills been paid up to date?

Worry-Free Buying in Spain with ImmoMoment

Purchasing real estate abroad does not have to be complicated, provided you are guided by the right experts. At ImmoMoment, we guide you step-by-step with our Belgian BIV certification and work closely with specialized lawyers in Spain. This ensures clauses like Subject to Mortgage are drafted correctly and that the Due Diligence process runs smoothly.

Dreaming of a home in Spain? Contact our team in Ghent, Marbella, Finestrat, or Torrevieja at info@ImmoMoment.es!