Updated
SRV-RE-DD
PROPERTY DUE DILIGENCE
Property due diligence before the contractis signed and funds are transferred
BRIDGES carries out legal due diligence on residential and commercial property abroad before the buyer assumes material obligations.
Check→Report→Contract→Closing
Title · seller · encumbrances · permits · contract · payments · tax · compliance
We check title, the chain of transfers, encumbrances, the seller, permits and licences, the land and planning status, the contracts, the payment structure and the risks that may affect the purchase, subsequent ownership or resale of the property.
The purpose of the review is to establish exactly what the client is acquiring, which risks exist and which conditions must be fixed before the transaction.
01 / WHEN A REVIEW IS NEEDED
We check before the payments,not after the problem arises
Due diligence matters most when the buyer is acquiring property in another country, is unfamiliar with the local registration system, or takes on obligations before the property has been fully reviewed.
We check who owns the property, whether encumbrances exist, whether the property matches the registered data and whether title can be safely transferred.
We check the bank, the amount and repayment procedure of the debt, and a payment structure in which the charge is released simultaneously with completion.
We check the developer’s rights to the land, the permits, the construction status, the contract, the payment schedule and the mechanisms protecting the buyer.
We check the existing leases, the rent roll, tenant arrears, material terms and the effect of the existing tenancies on the future owner.
In a share deal the client acquires not only the property but a legal entity with its entire corporate, tax and contractual history.
We additionally check the representative’s authority, the inheritance documents, spousal consents and the continuity of the chain of title.
02 / BASIS OF THE REVIEW
The register, the municipality and the bank eachgive a different part of one picture
Ownership is confirmed by the register. The legality of construction is confirmed by permits. Mortgages and the payment procedure require a separate banking review.
None of these sources replaces the others.
We check:
- the registered owner;
- the basis on which the right arose;
- the chain of transfers;
- mortgages;
- charges;
- seizures;
- easements;
- other registered restrictions.
An entry in the register confirms the right, but does not always answer questions about the legality of the construction and the actual condition of the property.
We check:
- the category and designation of the land;
- zoning;
- the building permit;
- the approved design;
- material alterations;
- permitted use;
- the completion certificate — where applicable.
A registered property may contain unauthorised alterations that will create a problem on a sale, a mortgage or when documents are being processed.
If the property is charged, we check:
- the existence of a mortgage;
- the outstanding balance;
- the repayment procedure;
- the conditions for releasing the charge;
- bank confirmations;
- the mechanism for transferring the funds.
The buyer must not transfer to the seller the funds intended to repay the mortgage without an agreed closing procedure.
03 / LEVELS OF REVIEW
We review the property, the seller and thestructure of the transaction itself
The depth of due diligence is determined by the type of property, the country, the ownership structure and exactly how the client is acquiring the asset.
- 01Title due diligenceOwnership
We check title, the chain of transfers, the basis of the right, registered encumbrances and the ability to transfer the property to the buyer.
- 02Property due diligenceThe property itself
We check cadastral data, the land, permits, designation, registered characteristics and the legal admissibility of the intended use.
- 03Seller due diligenceThe seller
We check the identity of the individual or corporate seller, their authority, material corporate data, insolvency, sanctions and other relevant factors.
- 04Transaction due diligenceTerms of the deal
We check preliminary agreements, the SPA, the payment schedule, escrow, closing conditions and the allocation of risk between the parties.
- 05Corporate due diligenceThe company that owns the property
Required where shares or participations in the company holding the property are being acquired.
- 06Tax & AML reviewTax and source of funds
We identify the material tax questions of the transaction and address source of funds, source of wealth and bank compliance in advance.
04 / PURCHASE STRUCTURE
Buying the property, or buyingthe company that owns it
Property can be acquired directly, or through the purchase of the company that owns it.
These are fundamentally different transactions.
ASSET DEAL
Buying the property itself
- What the client acquires
- The property itself.
- What we check
- Title, the seller, the land, permits, encumbrances, the contract and the payments.
- Historic liabilities
- As a rule the buyer does not take on the seller’s corporate history, unless the specific structure of the deal provides otherwise.
- Contracts and tenants
- It is determined separately which contracts pass to the new owner.
- Principal agreement
- SPA / property sale and purchase agreement.
SHARE DEAL
Buying the company together with the property
- What the client acquires
- Shares or participations in the legal entity that owns the property.
- What we check
- The property + the company + tax + liabilities + litigation history + corporate documents.
- Historic liabilities
- The buyer acquires the company together with its existing history and potential liabilities.
- Contracts and tenants
- Many contracts continue at the level of the company itself, but change of control must be checked.
- Principal agreement
- Share purchase agreement.
In a share deal it is not enough to review the property alone. Full corporate, tax and property due diligence is required.
05 / WHAT WE CHECK
Eight areas of legal duediligence on property
- 01Title and the history of the right
We check the registered owner, the form of ownership, the basis of acquisition and the sequence of previous transfers.
Where the chain contains unusual transactions, powers of attorney, inheritance or corporate transfers, we analyse them separately.
- 02Encumbrances and third-party rights
We check:
- mortgages;
- charges;
- seizures;
- easements;
- rights of occupation;
- long leases;
- restrictions on disposal;
- other registered third-party rights.
- 03Litigation and insolvency
We review the available information on disputes connected with the property or the seller, insolvency proceedings and circumstances that may affect the ability to complete.
- 04The seller and their authority
We check the identity of the seller or the corporate authority of the company.
Where necessary we additionally analyse:
- marital status;
- spousal consent;
- powers of attorney;
- corporate resolutions;
- the authority of the director;
- the UBO.
- 05Land and planning status
We check:
- the land category;
- permitted use;
- zoning;
- density and development parameters;
- applicable restrictions;
- special zones;
- restrictions on foreign buyers — where they exist.
- 06Legality of buildings and alterations
We compare the actual state of the property with the registered and permit documentation.
Unauthorised extensions, layout changes and reconstructions can complicate a sale, a mortgage, insurance or registration.
- 07Tax and arrears
We check the available information on property taxes, municipal charges, HOA and service charges and other obligations that may affect the buyer.
- 08Sanctions, PEP and source of funds
Depending on the transaction we screen the parties and beneficiaries for relevant sanctions and PEP factors and establish the bank’s source of funds and source of wealth requirements in advance.
The scope and availability of the review depend on the jurisdiction and the registration system of the specific country.
06 / SPECIAL SITUATIONS
Transactions that requirean extended review
When buying a property under construction we check:
- the developer’s rights to the land;
- the corporate structure;
- the building permit;
- the construction status;
- the contract;
- the payment schedule;
- guarantees;
- the mechanism protecting the funds paid.
We additionally analyse:
- the rent roll;
- the leases;
- the lease term;
- break clauses;
- arrears;
- guarantees;
- service charges;
- change of control;
- the resilience of the cash flows.
We check the corporate history, the owners, tax, contracts, indebtedness, litigation and the potential liabilities of the legal entity.
07 / RED FLAGS
What calls for stopping thedeal and looking into it
A red flag does not always mean the property cannot be bought.
But until the circumstances are clarified, one cannot move forward as though the problem did not exist.
- 01The seller’s details do not match the register
The person selling the property is not the registered owner or cannot evidence their authority.
- 02Unusually frequent resales
Several transfers of title within a short period call for an economic explanation and a review of the documents.
- 03A sale by power of attorney with no contact with the owner
Where the representative’s authority and the owner’s intent cannot be independently confirmed, the risk of the transaction rises materially.
- 04The seller refuses to produce original documents
Material title or permit documents must be available for review.
- 05Unregistered alterations or construction
The actual state of the property does not correspond to the permit or registration documentation.
- 06A mortgage with no agreed repayment mechanism
The property is charged, but the parties have not agreed a procedure for releasing the charge simultaneously with payment.
- 07Payment to a third party
The seller asks for part of the price to be paid to the account of a person who is not a party to the transaction, with no clear legal basis.
- 08Missing permits or completion certificate
A document required for the lawful use of the property is absent.
- 09Restrictions on disposal
There are seizures, prohibitions, third-party rights or other restrictions that prevent a free transfer of ownership.
- 10The seller’s insolvency
Bankruptcy or material creditor claims may affect the transaction or lead to it being challenged.
Where a material red flag arises, BRIDGES recommends suspending signature or payment until the matter is checked and a protective mechanism is agreed.
08 / LIMITS OF THE REVIEW
Legal due diligence does not replacetechnical and financial expertise
BRIDGES is responsible for the agreed legal scope of the due diligence.
Certain questions require licensed specialists in their own fields.
- Market value
An independent valuation is carried out by a licensed valuation specialist.
- Structural survey
Foundations, load-bearing structures, the roof and the technical condition of the building are assessed by an engineer.
- Environmental review
Investigation of the land, contamination and other environmental factors requires specialist expertise.
- Financial model
The future yield of an investment property is not determined by a legal review.
- Personal tax opinion
Individual tax consequences depend on residence, ownership structure and other circumstances of the client.
- A guarantee against future risk
Due diligence records the circumstances identified as at the date of the review, but cannot guarantee the absence of future events.
Where technical, tax, financial or environmental analysis is required, BRIDGES coordinates the involvement of the relevant specialist.
09 / CONTRACT AND CLOSING
The findings of the review mustturn into terms of the contract
Due diligence only makes sense when the risks identified are reflected in the transaction documents.
- 01Conditions precedentConditions to be satisfied before closing
For example:
- release of the mortgage;
- obtaining a permit;
- production of a document;
- settlement of arrears;
- correction of a registration error.
- 02WarrantiesThe seller’s assurances
The seller confirms the key facts about the property, the company, the documents and the absence of undisclosed circumstances.
- 03IndemnitiesCover for specific risks
Where an identified risk cannot be fully removed before the deal, the parties may separately allocate the seller’s liability for its consequences.
- 04Escrow / notary accountControl of the payment until the conditions are met
Funds are released to the seller only after an agreed event or confirmation that the conditions have been satisfied.
- 05Payoff statementRepayment of the seller’s mortgage
Part of the price is paid directly to the bank in the agreed manner, after which the charge is released.
- 06Price adjustmentAdjusting the price
Arrears, a defect or a liability that has been identified may be reflected in the negotiation of the price.
- 07Retention amountWithholding part of the price
Part of the sum remains in escrow until the seller performs a specified obligation.
- 08Title / warranty insuranceInsuring individual risks
Used only in those jurisdictions and situations where the relevant insurance product is available and makes sense.
10 / OUTCOME
What the client receivesafter the review
Not a bundle of extracts and documents, but a structured legal opinion.
LEGAL ASSESSMENT
- principal conclusions;
- ownership;
- the seller’s authority;
- the chain of transfers;
- encumbrances;
- permits and licences;
- contractual issues.
RECOMMENDATIONS
- which documents to request;
- which conditions to include in the SPA;
- how to structure the payments;
- which steps to take before closing;
- which questions to pass to a specialist.
RISK MATRIX
- CRITICAL
The circumstance requires stopping the deal or changing its structure entirely.
- HIGH
The risk must be removed or closed by a specific contract condition before the deal.
- MEDIUM
The risk is manageable but must be reflected in the SPA or in additional documents.
- LOW
No material effect on the ability to complete was identified within the agreed scope of the review.
The principal outcome of due diligence is understanding whether the deal can proceed, and on what terms.
11 / TIMING AND COST
The scope of the review is set afteran initial analysis of the property
There is no universal price for international property due diligence. Cost and timing depend on several factors.
- Jurisdiction
The speed of the registers, the availability of data and the local procedure differ from country to country.
- Type of property
Residential property, commercial property, off-plan and land require different depths of review.
- Purchase structure
An asset deal and a share deal differ materially in the volume of legal analysis.
- History of the property
The more complex the chain of transfers, the owners and the encumbrances, the more documents must be reviewed.
- Additional specialists
An engineer, a valuer, a tax adviser or an environmental specialist are engaged only where necessary and agreed.
After the initial analysis of the property BRIDGES fixes the scope of work, the cost and an indicative timeline before the main review begins.
12 / HOW THE REVIEW RUNS
From the address of the propertyto a safe closing
- Step 1We take in the information about the property
We record the address, the type of property, the seller, the structure of the deal and the documents already available.
- Step 2We draw up the list of documents
We determine what has to be obtained from the seller, the developer, the bank and the other participants.
- Step 3We check the registers and the documents
We work with land, cadastral, corporate, court and other available official sources. Where necessary we engage a locally licensed specialist.
- Step 4We prepare the due diligence report
We record the circumstances identified, the level of risk and the questions to be resolved before signing.
- Step 5We put protective conditions into the contract
We amend the SPA or hand the recommendations to the local lawyer who formalises the transaction.
- Step 6We support the closing
We monitor the performance of the agreed conditions, the payments and the documents within the agreed scope of support.
The review does not end with the report. The material findings must be reflected in the transaction itself.
13 / DOCUMENTS
What is usually requiredto start due diligence
The exact list depends on the country and the property.
- the register extract;
- the document establishing title;
- cadastral data;
- the plan;
- permits;
- construction documentation;
- the completion certificate — where applicable;
- information on encumbrances.
For an individual:
- identification data;
- evidence of authority;
- the necessary consents.
For a company:
- registration documents;
- directors;
- shareholders;
- the UBO;
- corporate resolutions.
- the rent roll;
- the leases;
- service agreements;
- information on arrears;
- operational documents;
- applicable licences.
- the LOI / reservation agreement;
- the draft SPA;
- the payment structure;
- information on the bank;
- the intended ownership structure;
- other transaction documents.
If the seller refuses to produce a material document, that is recorded as a separate risk in the opinion.
14 / GEOGRAPHY
We review property acrossdifferent legal systems
The due diligence procedure is set not by a single international template but by the law and the registration system of the specific country.
- Greece
Review of the national cadastre, title, encumbrances, permit documentation and the correspondence of the actual property with the registered data.
- Spain
Nota simple, Registro de la Propiedad, municipal documents, arrears, taxes and applicable licences.
- Italy
Notarial documents, Catasto, Conservatoria / registri immobiliari, urbanistic and cadastral compliance.
- Cyprus
Title deed, permit documentation, encumbrances, developer mortgage and other matters specific to the property.
- UAE
Title deed / Oqood, land department records, NOC, developer approvals and the registration procedure of the relevant emirate.
- United Kingdom
HM Land Registry, tenure, leasehold/freehold conditions, service charge, planning and other relevant records.
- France
Title documents, Service de la publicité foncière, diagnostics, copropriété and applicable urban planning documentation.
- Portugal
Certidão do Registo Predial, Caderneta Predial, Licença de Utilização and other applicable documents.
The list of sources and documents is refined for the specific property and the law in force at the date of the review.
15 / TEAM
Who runs the propertyreview
BRIDGES coordinates the due diligence.
Depending on the country and the complexity of the transaction, the following are engaged:
- property lawyers;
- local counsel;
- notaries;
- tax advisers;
- AML / compliance specialists;
- where required — engineers, valuers and other specialists.
- the structure of the deal;
- the scope of the review;
- title;
- the contract;
- coordination of the due diligence.
- the tax consequences of the deal;
- source of funds;
- the ownership structure.
- the local registers;
- the registration procedure;
- liaison with the notary and the competent authorities.
Questions
Frequently asked questions
The notary performs the functions provided for by the law of the specific country, and not in every jurisdiction does that include a full analysis of the property’s history, the seller’s corporate risks, planning documentation, the banking payment structure and the terms of the contract. The scope of a notarial check and of full due diligence therefore cannot be treated as the same.
The entry confirms the current registered owner, but the chain of transfers may reveal inheritance disputes, powers of attorney, corporate transactions or other circumstances capable of creating a risk of challenge.
In many countries a significant part of the legal review is carried out remotely through official registers and documents. Where a physical inspection, technical expertise or original documents are needed, a local specialist is engaged.
First the nature of the breach and the possibility of legalising it are established. The client then decides: require rectification before the deal, renegotiate the price, include a specific contract condition, or walk away from the property.
It is insurance of certain risks connected with ownership. It is not available in every country and it does not replace legal due diligence.
Yes. A developer’s reputation does not replace a review of the specific property, the land, the contract, the permits and the payment structure.
These are conditions that must be satisfied before closing: for example, release of a mortgage, production of a document or obtaining a permit.
Yes, where the review has revealed arrears, a defect, a liability or another factor of economic significance. The outcome depends on the negotiations and the agreement of the parties.
In an asset deal the property is acquired. In a share deal the company that owns it is bought, so the corporate, tax and historic liabilities of the legal entity are additionally reviewed.
BRIDGES uses lawfully available sources and engages locally licensed specialists. Where certain information objectively cannot be confirmed, this is stated expressly in the opinion.
Before final obligations are signed and before a material part of the price is transferred.
The repayment procedure, the release of the charge and the payment sequence must be agreed with the bank so that the buyer does not end up owning a property with someone else’s encumbrance.
The term, the rent, arrears, the deposit, indexation, break clauses, guarantees, service charges and other material conditions.
Sanctions status or related restrictions may affect the payment, the bank, the notary and the very possibility of completing the transaction.
Property law is national. Local counsel checks the local registers, documents and procedures where a professional licence or physical presence is required.
A summary of the tenants of a commercial property: area, rent, lease term, arrears, deposits and other key figures.
A document from the bank confirming the sum required to repay the seller’s loan in full and release the charge.
Yes. In that case the property itself is reviewed and, in addition, the corporate structure of the owner.
The rules on the use of land and the parameters of development: designation, density, height, restrictions and permitted uses.
Corporate due diligence, a tax review, warranties, indemnities, escrow, retention of part of the price and other contractual mechanisms are determined by the findings of the review.
Where the transaction requires environmental due diligence, it is carried out by a specialist. The legal review may identify the need for such expertise.
Yes, where this is required by the bank, the notary, the seller or the nature of the transaction.
It does not automatically mean fraud, but the absence of material documents is a risk that has to be resolved before the deal.
The grounds depend on the law of the country: lack of authority, breach of mandatory rules, third-party rights, the seller’s insolvency and other circumstances.
A written opinion, a risk matrix and recommendations on the terms of the contract and the next steps.
The right to use another person’s property or to receive income from it while ownership remains with someone else. In some countries such a right can materially restrict the buyer.
In many jurisdictions it is a mandatory document on a sale or letting and contains data on the energy efficiency of the building.
The rules of the owners’ association, its budget, arrears, forthcoming works and restrictions can materially affect the costs and the use of the property.
Yes, but the timescales and the availability of documents may be significantly limited, so the scope of the review is set by the conditions of the particular auction.
An insurance instrument used mainly in corporate transactions to cover specific risks connected with the seller’s warranties and representations.
No. The review reduces uncertainty and identifies the risks available as at the date of the analysis, but it cannot guarantee the absence of any future circumstances.
INITIAL ASSESSMENT
Tell us what outcome your family needs
We will design a solution for your case, choose the country and the right status, and take the whole process through to the result.
