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Real estate due diligence in the Netherlands

Real estate due diligence in the Netherlands

Real estate due diligence in the Netherlands includes obtaining and analyzing all the available information on certain real estate property, be it legal, technical, or financial, in order to enter into an informed real estate transaction.

Due diligence is performed by obtaining and analyzing documents of ownership, as well as special construction permits, and financial documents, among others, all before concluding the real estate transaction.

A team of real estate experts, along with our lawyers in the Netherlands, are able to provide clients with a comprehensive verification of the commercial or residential property, before the client enters into a purchase agreement with the property’s owner.

Real estate due diligence in the Netherlands has an important role, due to the fact that it allows clients to rest assured that the purchase is a safe one.

Below, our lawyers briefly describe the process, as well as the general steps for property acquisition.

Our full-service law firm in the Netherlands offers complete solutions to those interested in purchasing property, as well as those interested in other types of services, such as trademark registration.

The real estate due diligence process

Real estate due diligence in the Netherlands is recommended for all property acquisitions, as part of the pre-purchase stages.

It is a useful process both for individual property buyers, looking to purchase a home or an apartment in a Dutch city, as well as corporate investors or entrepreneurs interested in making more substantial real estate acquisitions.

When properly performed, this verification process will uncover any issues with the property, as well as any hidden encumbrances.

The real estate due diligence verification can be a complex one, especially if the client opts for a comprehensive review.

In most cases, our lawyers in Netherlands will mainly review the acquisition documents from a legal standpoint, as well as make inquiries into any tenancy, mortgage and insurance issues.

With the help of a construction expert, the process can also include a complete and detailed investigation of the legal regime of the building.

The following items are commonly verified during real estate due diligence in the Netherlands:

  • Purchase agreement: a lawyer reviews the letter of intent (the preliminary agreement), as well as any other documents or contracts that are relevant to the process;
  • Title matters: an inspection of the documents obtained from the Land Registry, such as data about the rights on the property;
  • Physical property inspection: an analysis of the physical condition of the property usually includes a report on the functionality of the good in order to assess the building’s maintenance investments, which would have an impact on its value;
  • Other issues: services contracts, contracts with tenants, financial matters concerning the property, litigation (if any), and insurance matters.

As far as the physical property review is concerned, the following are taken into account: the foundation, structural frame, roof, infrastructure, water supply, drainage, electric and gas systems, and other associated utilities, and others, which contribute to the understanding of the physical and technical condition of the building.

Such property inspection analyzes are useful both to negotiate the cost (price) associated with a property, and for financial planning in terms of the future works required for the property.

Our clients receive professional legal advice from our team concerning the legal documents required for the transaction, drawing up these documents, verifying the terms of the acquisition and negotiating with the seller, as appropriate.

The lawyers involved in real estate due diligence in the Netherlands can also provide guidance and information on the most important issues concerning the construction law in the country.

How to purchase property in the Netherlands

Buying a home or another type of property in the Netherlands is a multi-step process that starts with preliminary research.

Foreign nationals, as well as foreign investors or foreign companies, are not subject to any restrictions on owning Dutch property, however, they are subject to the same procedure for proper property deed registration, as well as the conditions, to obtain a mortgage.

Some of the most important steps for property acquisition are the following:

  1. Find the property: individuals, as well as investors, are advised to take the needed time to evaluate their options in a particular Dutch city;
  2. Sign the preliminary contract: this is the presale agreement that sets forth the main clauses; it can be reviewed by one of our lawyers;
  3. Perform due diligence: the comprehensive verification described above can take place between the moment the buyer sets in place the mortgage details and the moment the final purchase agreement is signed;
  4. Sign the deed: the buyer will sign the deed of the property, as well as the transfer agreement in front of a Dutch notary.

We can provide more details concerning these steps upon request.

Our team of lawyers can assist individual clients with a number of other matters concerning property, such as the division of property following separation. Discussing with a divorce lawyer in Netherlands from our team can be helpful before your separation.

The real estate market in the Netherlands in figures

The association of real estate agents and appraisers in the country offers a glimpse into the property market in the country on a quarterly basis.

According to reports from previous years, the number of houses offered for sale each week in 2020 fluctuated and, in general, there were more houses available for purchase in 2020, compared to 2019.

In 2020, brokers enlisted with the association of real estate agents in the country sold 154,000 houses, more than the number of houses sold in 2019, but not as many as in 2016.

Other data made available by the association of real estate agents shows the following:

  • 35.940 homes were sold in the second quarter of 2022 by the brokers who are part of the association;
  • the square meter price for a mid-terrace house was EUR 3.63/m2 living space in the second quarter of 2022;
  • the square meter price for an apartment in the second quarter of 2022 was EUR 4.93/ sqm living space;
  • all prices per sqm living space have increased compared to 2021;
  • according to the same report, the time needed to complete the sale for an apartment was 24 days (the time between the moment a house is offered for sale and the date of sale).

The number of transactions, the median square meter price, as well as the time needed to sell the property presented above, should be used for informational purposes only.

When buying property, there are many factors that can influence the total time needed to conclude the real estate transaction, considering that the sale is completed once the deed of the property is signed by the new property owner in front of the broker.

If you are interested in buying property in the Netherlands, our team specializing in real estate law and real estate litigation can assist you.

Contact us for further details and information on real estate due diligence in Netherlands, as well as a complete offer of our services.

Our team of lawyers also assists clients interested in company formation matters such as VAT registration.

When you need real estate diligence in Netherlands, count on our experienced team specializing in real estate law, real estate, and estate litigation due diligence.

Contact us for further details and information.