“Security is a fundamental human anthropological need that consists of ‘knowing what to expect’…,” quotes the prominent Spanish jurist Antonio Enrique Pérez Luño in his work “Legal Security” (1991). In real estate, this means valid, defensible, and predictable transactions, without “surprises.” Due diligence is the process of verifying, documenting, and mitigating risks before listing, reserving, or signing. I present a minimum checklist for agents, investors, and buyers.
In the real estate market, the typical mistake isn't "not knowing": it's believing that due diligence is expensive. That's why it's important to be blunt: legal certainty is the goal; due diligence is the method, and the best way to achieve it is with proper advice that can verify and apply the appropriate due diligence.
The method I call the SIC Triad (Subject–Property–Cause) is based on a simple idea: You have to turn every decision into evidence. Therefore, before publishing, reserving, or signing, the first filter is the Subject: Who am I negotiating with? Here, identity and legal capacity to enter into obligations are verified, whether it's a natural person or a legal entity. If it's a company, you don't negotiate based on assumptions: you validate its existence, current Taxpayer Identification Number (RNC)/Commercial Registry, its corporate purpose, and who has the actual authority to sign according to its competent body. Equally critical is confirming the representation: a valid power of attorney and express authorization to sell or commit.
And in a market where money can also be risky, a preventative approach is applied: identifying the ultimate beneficiary and ensuring the consistency of the source of funds. Added to this is a point that many underestimate: track record and structure. Delivered projects, verifiable references, approved permits, and formal payments speak louder than any campaign. "Reputation" may be marketing; execution is the proof.
The second filter is the property itself: what is being sold? Because a property isn't just what you see; it's what legally exists and what physically corresponds to that right. This requires reviewing ownership, description, area, boundaries, and encumbrances: mortgages, liens, pending lawsuits, usufructs, and easements. Then comes the cadastral and physical verification: site visits, boundary inspections, access checks, and occupancy verification, to ensure the paperwork matches the reality of the property. Where applicable, land use and easements are also considered, because many "surprises" don't arise in the contract, but rather in the actual state of the property.
Tax validation completes the picture: obligations linked to the property, including property tax and capital gains tax where applicable. And for the investor—and the serious agent—there's an added benefit that makes all the difference: the valuation. It's not enough for it to be legal; if it's overvalued, it's not an investment, it's expensive wishful thinking.
The third filter is the Cause: how is the transfer made and with what funds? Here, the legal vehicle that supports the right is defined: promise, sale, conditional sale, lien, trust, among others. This vehicle must be secured with clear suspensive conditions—release of encumbrances, financing, permits/licenses, construction milestones, delivery—and a realistic timeline, balanced penalties, and defined repayment terms.
If it is not understood "what it is built with", the risk of non-compliance increases.
This article was originally published in the print edition of El Inmobiliario , issue no. 14.
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