Is It Legal To Use Residential Property For Business Purposes?

Residential Property For Business Purposes : Residential property can be used as commercial property if permission is obtained from the local authority. Find out how to go about this and other specifics.

Saleha, a dentist by profession, wants to turn her Vasai apartment into a clinic. Several others, like Saleha, want to know how to use their residential property for commercial purposes. Because of the high rental rates, this has become the norm in almost all cities. It saves money on commercial space rental or purchase, as well as commuting time and expenses.

While housing societies frequently oppose full commercialization of residential apartments, a fixed area can be used for this purpose legally. This area, however, varies from state to state and even within cities.


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What is the distinction between residential and commercial property?

 

Let us first define the distinction between residential and commercial property:

  • A residential zone is an area where residential properties such as apartments, plots, independent houses, and floor apartments are located. These areas may contain hotels or motels but no retail stores.
  • A commercial zone is an area that contains shopping malls, commercial shops, office buildings, hotels, clubs, restaurants, and so on. This zone is governed by Commercial Zone legislation, which specifies which business activities are permitted in which zones. Some commercial activities, for example, are prohibited near religious sites such as temples, churches, or masjids.

 

 

Residential Property For Business Purposes : Is it possible to use a residential property as a commercial property?

Yes, if you have legal permission, you can use a residential property as commercial property. The law in each state varies; some states may only allow 30% of residential property to be used as commercial property, while others may allow 50%. Let us wait and see what the law says.

First, let’s clarify who can set up a home office. “Services by resident advocates, chartered accountants, lawyers, and doctors are some of the approved commercial activities in any residential area,” says an MB legal expert. Tutorials, dance, and yoga classes are also permitted to use the space in a dual capacity.

Is there, then, a specific provision for this? “There is no specific provision for converting the use of a flat from residential to commercial,”  The flat may be used for commercial purposes as long as no production or manufacturing activity is carried out and the commercial use is entirely professional. Furthermore, it should not be a nuisance to other members of society.”

However, approval from the housing society is required. “Depending on the nature of the business, it may also be necessary to obtain permission from the local municipal authorities for the conversion of the flat into a commercial establishment,” In addition to standard approvals, tenants must obtain a no-objection statement from the landlord.

 

What does the law say about converting a residential property into a commercial property?

Zoning Law is a law that governs the conversion of residential property to commercial property. It is a law that governs the division of land into zones and the prohibition and authorization of specific land uses. The law is intended to protect against the negative effects of commercial activities. They intend to separate commercial and residential areas. Residential, commercial, industrial, rural, combination zoning, agricultural zones, historic zones, and aesthetic zoning are the various types of zoning.

 

 

What is the Conversion Process for Residential Property to Commercial Property?

Converting a residential property to a commercial property can be a time-consuming process. No matter how long it takes, all of the steps must be completed before beginning commercial activities on a residential property. If you do not, you may be penalised. A step-by-step guide to converting a residential property into a commercial property is provided below.

  • Step 1: You should go to your city’s municipal government. If you live in Delhi, for example, you should go to the Municipal Corporation of Delhi.
  • Step 2: Submit an application for property conversion to the Municipal Officer. It would be helpful if you explained why you want to convert.
  • Step 3: Along with the application, you must submit company registration documents and business IDs. Provide additional information such as the size of the business, address, and nature of the property.
  • Step 4: Authorities will investigate the business; if they find no harm to the neighbourhood or the environment, they will only grant the business a licence.

 

Documents Required for Residential Property Conversion to Commercial Property

 

If you decide to convert your residential property to a commercial property, you must submit the following documents:

 

  • An application in writing
  • Documentation for business registration
  • Address verification
  • Company Identification

 

If a residential property is used for commercial purposes without a licence, a penalty or charges may be imposed.

If a residential property is used as commercial property without a licence, the penalty varies by city. In Noida, for example, the penalty is 1% of the total cost of the property. So, if the property is worth Rs 50 lakh, you will be fined Rs 50,000 for not having a licence.

 

 

Residential Property For Business Purposes -Businesses that are not permitted to be held in residential property

The following activities are prohibited in residential properties, according to Supreme Court orders:

  • A banquet hall cannot be built in a residential neighbourhood.
  • A business cannot operate in a residential area if the environment is polluting, harmful, obnoxious, inflammable, and so on.
  • A liquor store cannot be located in a residential neighbourhood or on a residential property.
  • Timber, marble, iron, steel, sand, firewood, and coal cannot be sold as building materials.
  • Automotive repair and workshop facilities should be located away from residential areas.
  • Architects, chartered accountants, physicians, and lawyers are not permitted to practise in more than 50% of residential areas.

 

Businesses that are not permitted to be held in residential property

The following activities are prohibited in residential properties, according to Supreme Court orders:

 

  • A banquet hall cannot be built in a residential neighbourhood.
  • A business cannot operate in a residential area if the environment is polluting, harmful, obnoxious, inflammable, and so on.
  • A liquor store cannot be located in a residential neighbourhood or on a residential property.
  • Timber, marble, iron, steel, sand, firewood, and coal cannot be sold as building materials.
  • Automotive repair and workshop facilities should be located away from residential areas.
  • Architects, chartered accountants, physicians, and lawyers are not permitted to practise in more than 50% of residential areas.

 

Residential Property For Business Purposes : Conclusion

We can see how critical it is to obtain a licence as well as all of the other permissions required to use the residential property as a commercial property. Residential property used as commercial property is governed by law in India. The Zoning law governs how properties are zoned and what land uses are prohibited and permitted. Some activities, such as selling liquor, automobile products, machines, timber, and so on, are prohibited in residential areas under certain rules.We can see how critical it is to obtain a licence as well as all of the other permissions required to use the residential property as a commercial property.

 

For Business Purposes

Residential property used as commercial property is governed by law in India. The Zoning law governs how properties are zoned and what land uses are prohibited and permitted. Some activities, such as selling liquor, automobile products, machines, timber, and so on, are prohibited in residential areas under certain rules. If you want to use your residential property for commercial purposes, you must obtain a licence from the local government. You will also face penalties if you use the property for commercial purposes without a licence.

 

 

 


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Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. Navimumbaihouses.com does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.
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