What precautions should be taken before and after buying commercial land

My dear friends, Purchasing commercial land is a major investment, so due diligence is more important than rushing into it. To ensure your hard-earned money is protected, be sure to follow the following precautions:-

1. Closely examine legal documents

First, ensure that the land ownership is clear.

Title Deed: Ensure the land is in the seller's name and that they are authorized to sell it.

Encumbrance Certificate: Check records for the past 15-30 years to determine if there are any loans or legal disputes on the land.

Conversion Certificate: Has the land been converted from agricultural land to commercial land? Without Land Use Conversion, doing business there will be illegal.

2. Location and Connectivity

The success of a business depends entirely on its location:

Accessibility: Can trucks, tempos, or customer vehicles easily reach it?

Future Development: Is there a new highway, metro station, or major project coming up nearby? This will increase both the land's value and business.

Infrastructure: Check the power load, water availability, and drainage system.

3. Government Regulations and Zoning Laws

Every land has a master plan.

FSI (Floor Space Index): Check how many floors or how large a building can be built on that land.

Setback Rules: Check with the local development authority (e.g., DDA, JDA, MDA) about the distance you must leave from the road.

4. Physical Verification

Don't rely solely on paper; visit the site to verify:

Demarcation: Check that the land boundaries are correct.

Soil Quality: The soil must be strong enough to support heavy machinery or tall buildings.

Encroachment: Check that the land is not illegally occupied or occupied by old slums.

5. Financial and Tax Aspects

Tax Receipts: Ask for property tax receipts from the past few years.

Hidden Costs: Calculate development charges in addition to registration fees, stamp duty, and brokerage.

Pro Tip: Always obtain a 'Legal Due Diligence' report from a good property lawyer. This small expense could save you from future losses worth lakhs.

Here's a list of precautions you should take after purchasing:

1. Immediate Legal Formalities (Post-Purchase Paperwork)

A sale deed alone isn't enough; get these documents in order immediately:

Mutation: Immediately after purchasing the land, get a mutation registered in your name at the Revenue Office (Tehsil/Revenue Office). This makes you the official owner in government records.

Check the Lease/Conversion: Ensure the land is listed as commercial. If it was agricultural land, obtain a CLU (Change of Land Use) certificate.

New Khasra-Khatauni: Obtain a copy of the new Khatauni or Jamabandi in your name after the mutation.

2. Physical Possession and Security

Your ownership of the land must be documented and documented:

Demarcation: Have a government surveyor or patwari accurately measure the land and mark all four corners.

Boundary Wall: Immediately erect barbed wire or a concrete wall to prevent encroachment.

Place a sign: Put up a sign on the land stating "This property belongs to [your name/company]" and "Not for Sale." Also include your contact number.

3. No-Objection Certificates (NOCs) and Permissions

If you plan to build or start a business there, take these steps:

Electricity and Water: Apply for a commercial electricity and water connection in your name.

Fire and Safety: Obtain an NOC from the Fire Department and Pollution Control Board (if required) before constructing a building.

Local Authority: Get the map approved from the Municipal Corporation or Development Authority (LDA, GDA, etc.).

4. Financial and Records Management

Property Tax: Register your property with the Municipal Corporation and start paying taxes on time. Receipts provide solid proof of ownership.

Safe Document Storage: Keep the sale deed, mutation copy, and chain deed of previous owners in a secure locker.

5. Vigilance

Regular Visits: Visit your land regularly. Vacant commercial land often faces problems of illegal encroachment or parking.

Contact with Neighbors: Build good relationships with nearby shopkeepers or landowners so they can inform you of any suspicious activity.

Pro tip: Always check if there are any old dues (like electricity bills or government loans) on the land, as these liabilities often fall on the new owner after the registration.