Buying a property at auction can be one of the most efficient ways to acquire an asset below its market value. It is also one of the riskiest when you bid without having done your homework. Unlike an ordinary sale, there is no seller answering for hidden defects here, and no room to renegotiate after the award: you buy the property as it stands, with whatever charges it carries and with whoever is inside. The prior due diligence is what separates a good deal from a problem that lasts for years.
1. What due diligence is and why it is critical at auction
Due diligence is the orderly, documented review of everything that affects a property before committing to buy it: its legal, physical, tax and possessory situation. In a sale between private parties there is an identifiable seller, a deposit that can be lost but also recovered, and a notary who warns of charges before signing.
At auction that cushion disappears. You bid on a lot described in a notice, often without being able to view the interior, and the award is final. If a surviving charge, an occupant or a three-year community debt appears afterwards, the problem belongs to the successful bidder. That is why the review is not optional: it is the buyer's only defence, and it must be done before depositing and bidding.
2. The land registry extract: ownership and charges
The first document to request is the land registry extract (nota simple) from the Property Registry. It is informative rather than conclusive, but it reflects the registered situation: who the owner is, the description of the property, its area and, above all, the registered charges (mortgages, seizures, easements, resolutory conditions, tax liens).
It should be read in full and in chronological order, because the rank of the charges —which charge is earlier and which later— determines what happens to them after the auction. A recent extract, requested days before bidding, avoids surprises from last-minute annotations. If anything fails to match between the notice and the Registry, it must be clarified before committing a single euro.
3. Charges that are cancelled and charges that survive
The basic rule in enforcement auctions is one of registry rank: the charge that gives rise to the enforcement (the one being enforced) and all those subsequent to it are cancelled on the award; earlier charges (of preferential rank) survive and are assumed by the buyer. That is why identifying which charge is being enforced is the most delicate point of the whole review.
| Charges that are cancelled | Charges that survive |
|---|---|
| The mortgage or charge enforced in the proceedings. | Mortgages and charges ranking ahead of the enforced one. |
| Seizures and annotations subsequent to the enforced charge. | Easements and rights in rem registered with preferential rank. |
| Preventive annotations of lower rank. | Certain tax liens and debts with a legal privilege. |
This is a general rule, not an automatism: each procedure has its own order of charges and it should be verified case by case against the certificate of ownership and charges. We analyse this distinction in more detail in our guide on charges at auction and reading the land registry extract.
4. Occupancy: checking whether the property is occupied and by whom
A property may be vacant, occupied by its former owner, leased or occupied without title. The difference is enormous, because recovering possession does not cost the same —nor take the same time— in each case.
- Tenant under a prior lease: may have the right to remain depending on the tenancy rules and when their right was registered.
- Former owner or occupant without title: requires seeking eviction, with the judicial timeframes that this entails.
Before bidding it is worth establishing the real possessory status: whether the file records it as a primary residence, whether there are tenants, and which eviction route would apply. Buying an occupied property cheaply without having calculated the time and cost of recovering it is one of the most frequent causes of failed operations.
5. Debts that "travel" with the property: property tax and community fees
Some debts do not appear on the land registry extract and yet accompany the property and end up falling on the new owner:
- Community of owners: the property answers for the unpaid fees of the current year and of the previous years that the law attributes to the acquirer. Requesting the community debt certificate and the minutes of the last meeting is essential: there may be approved levies not yet charged.
- Property tax (IBI) and local taxes: the property remains liable for the most recent years of property tax, regardless of who was the owner when it accrued.
These debts do not appear in the Registry, so they must be traced separately: the community certificate and a query to the local administration. Ignoring them means adding to the hammer price an invoice that was not in the calculations.
6. Physical and planning situation
The legal review is not enough. It is worth checking the property's physical and planning reality before bidding:
- That the registered description matches the real area and boundaries.
- Whether there are works, extensions or divisions undeclared or without a licence that could give rise to planning liability.
- The state of repair and the possible existence of pending renovation levies.
- The planning classification of the land and any restriction affecting its use or value.
When it is not possible to access the interior, the evidence is built from what is available: the cadastre's electronic office, municipal planning information, the façade and images of the surroundings. Every data point reduces the uncertainty about what is being bought.
7. Deadlines and deposit
Bidding requires having set up in advance the deposit established to take part, a percentage of the value of the asset that is lodged and returned to anyone who is not the successful bidder. The winner must complete payment of the price within the set period; if they fail to do so, they may lose the deposit.
All the due diligence must be closed before that moment, because once the asset is awarded there is no going back. The calendar rules: reviewing charges, occupancy and debts after having bid is doing it too late.
8. Final checklist before bidding
Before lodging the deposit, the following should be verified and documented:
- A recent land registry extract, read in full and by rank.
- Identification of the charge being enforced and of those that survive.
- Possessory status: vacant, leased or occupied, and the applicable recovery route.
- Community of owners debt certificate and minutes of the last meeting.
- Status of property tax and other local taxes affecting the property.
- Physical and planning check to the extent accessible.
- Deposit amount, deadline to pay the balance and auction conditions.
- Calculation of the real total cost: hammer price + surviving charges + debts + time and cost of recovering possession.
The hammer price is never the real cost. The real cost is the hammer price plus the charges that survive, the debts that travel with the property and whatever it costs to leave it vacant and clear.
9. How Equus Capital operates
At Equus Capital no bid is made blind. Every auction operation goes through a full due diligence with our own legal team: study of the certificate of ownership and charges, determination of what is cancelled and what survives, analysis of the possessory status and the eviction route, tracing of community and property-tax debts, and verification of the planning situation. With all of that we build the real total cost of the operation and a reasoned recommendation before deciding whether to bid and up to what amount. The aim is simple: that when the asset is awarded there is no surprise, because every one of them was anticipated before the bid.