Budding entrepreneurs often aim to establish their businesses in the comfort of their homes without looking out for a separate commercial space. But there are several challenges in accomplishing it. Failing to adhere to the stipulated rules and laws will result in several legal complications.

Converting a residential property to commercial requires careful planning, adherence to zoning laws, obtaining necessary permits, and understanding legal implications, enabling entrepreneurs to transform their living spaces into thriving business hubs while maximizing investment potential and ensuring compliance with local regulations.

Things to be Kept in Mind, Before Converting the Residential Space to Commercial Property

1. Zoning regulations put forward by municipal authorities of the State
2. Rules established by the local municipality. For instance, the construction of commercial and industrial buildings is discouraged in a few areas which have schools and residential buildings
3. Other factors such as the number of floors or levels in the building, and space between consecutive building structures

The following steps have to be employed when turning a residential property into a commercial property:

1. A thorough research of the municipal regulations and zoning laws should be employed
2. The type of business activity must be disclosed to the municipality and permission should be sought for performing the respective business activity. The area required for the business should also be mentioned
3. Approval request must be obtained from the Town Planning Board 
4. If the individual is in rental premises and wants to use the same for commercial purposes, the landlord’s approval, and agreement to conduct business activities through a No-Objection certificate (NOC) is mandatory
5. If the property is an apartment or a gated community, the commercial tenants may be charged additional maintenance costs or parking fees by apartment complexes
6. The individual intending to carry out the business from a residential space should also obtain a license from the State Government under the Shops and Establishment Act, 1947
7. When the place is converted to a commercial space, the electricity bill may be charged at a non-domestic rate. Several businesses such as guesthouses, housing developments, bed–and–breakfast facilities, houses of worship, co-operative housing societies, and emergency shelters are all eligible to avail of these benefits.
8. Most charges like rent, electricity bills, and other utility bills will be charged at a higher rate as compared to standard charges
9. Property tax will be charged at a higher rate if commercial activities are carried out on residential premises
10. Appropriate permission must be obtained from the housing society before employing commercial activities in the residential property
11. Medical and legal practitioners are exempt from obtaining licenses under this procedure
12. For activities such as painting, teaching, dance, yoga, and tuition classes, the commercialisation procedure mentioned above will not be applicable.

Although the law permits the changing of residential premises to commercial property Verification it has to be kept in mind that the law does not allow banquet halls, activities with inflammable, hazardous, or polluting procedures/substances, retail shops for junk food, activities dealing with building materials, printing, liquor shops, varnishing and dyeing shops, repair shops for cars and bikes, and other professional activities with an exception to doctors, architects, chartered accountants and lawyers to be carried out in residential spaces. Also, it is important to bear in mind that regardless of the commercial activity that is being carried out, the establishments should adhere to the noise limits as specified by the authorities.

It is prudent to take legal advice, follow proper rules and regulations and then take a further step when it comes to converting a residential building to a commercial property. Leaping into a business without learning the legal nuances would push the business and the business owner into deep trouble. At Vakilsearch you can expect proper legal guidance to help you transfer your residential space to a commercial property. We will also ensure all legal compliances are met by procuring the licenses and permissions needed for the business. Do not hesitate to pick up that phone and give us a call or drop us an mail at support@vakilsearch.com. We are more than ready to help you out!

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Also, Read:

• TNREGINET
• Land registration rules in India
• Reasons to invest in Property