Legal due diligence before acquiring land in the Canary Islands

Land is the most legally complex asset an investor can buy in the Canary Islands. Its value depends less on what is physically there than on what the law allows to be built, and on whether the seller can transfer clean title. Due diligence is the process of confirming both before money changes hands.

1. Title and ownership

The starting point is an up-to-date Land Registry extract (nota simple) for each plot. It identifies the registered owner, the description of the property and any registered charges such as mortgages, attachments or easements. Investors should confirm that the seller is the registered owner, or understand exactly why not, and that the chain of title is coherent.

2. Physical description and boundaries

The Registry, the Cadastre and the physical reality on the ground do not always match. Area discrepancies, overlapping boundaries or missing plots are common in rural and older urban land. A survey compared against cadastral cartography helps identify problems early.

3. Planning classification

Whether land is classified as urban, developable or rustic determines what can be done with it. The investor should obtain the applicable planning instruments and, where possible, a written planning certificate from the municipality describing the plot's classification and permitted uses.

4. Sectoral restrictions

• Coastal law easements for land near the shoreline.
• Protected natural areas and environmental designations.
• Road, airport, water course and heritage protection zones.
• Agricultural or rural land regimes limiting building.

5. Existing permits, liabilities and occupation

Investors should review any past licences, ongoing planning proceedings, unpaid municipal charges, urbanisation costs attributable to the plot, and whether anyone occupies or uses the land under lease or informal arrangement.

Hypothetical scenario: the example below is invented for illustration. It does not describe any real property, project, company or person. An investor agrees a price for a plot marketed as 'building land'. Due diligence reveals that the plot is in a sector whose development plan has not yet been approved, so no building licence can currently be granted. The investor renegotiates the purchase into a conditional agreement tied to plan approval rather than paying in full upfront.

How findings shape the deal

Due diligence rarely ends with a simple yes or no. Its findings typically feed into price adjustments, conditions precedent, seller warranties, retentions or escrow arrangements. The value of the review lies in negotiating from knowledge rather than discovering issues after completion.