Property due diligence – how to avoid risks?
Why is the land and mortgage register alone not enough?
Many investors make the mistake of assuming that checking Parts III and IV of the land and mortgage register is sufficient for transaction security. In the Polish legal system, there are a number of risks that are not disclosed in the land and mortgage register and which can effectively block an investment process or drastically reduce the value of the land. Professional Property due diligence This is a multi-dimensional process that at MONUM Lawyer's Office we divide into several key areas.
Key stages of legal analysis
- Planning analysis (Local Spatial Development Plan and Planning and Development Decision): We check not only the current land use in the Local Spatial Development Plan but also analyse the conditions study. If there is no plan, we verify the chances of obtaining a Zoning Conditions decision by analysing so-called „good neighbourliness”.
- Administrative and legal restrictions We are verifying whether the property is located within a conservation protection zone, in floodplains, or whether it is subject to statutory pre-emption rights (e.g. from State Forests or KOWR).
- Access to public road and utilities The lack of a secure connection from the public road or a servitude for essential utilities is one of the most common reasons for delays in obtaining building permits.
- Reprivatisation risks and third-party claims: We are investigating ownership continuity to exclude the risk of claims by former owners.
The role of a lawyer in the investment process
A comprehensive due diligence report concludes with recommendations. We not only identify risks but also propose mechanisms for their mitigation in the sale agreement – from appropriate representations and warranties, through notary deposits, to conditions precedent to the transaction. A secure investment begins with cool analysis, not with paying a deposit.
