Can residential property be used as commercial?

• In India, as per The Zoning Law municipal authorities have the right to decide usage of property.
• Getting approval from the authorities will depend on the nature of business.

• You need to get your company registered for a speedy approval.
• This depends upon the nature of the business and it is necessary to obtain permission from the municipal authority where you are living in your own flat and once you will receive the approval you are liable to pay commercial property tax.
• You can not convert the residential property into commercial property without permission.
• According to law if you are living in a rented apartment and you want to make one for commercial purposes, suppose you want to set up a salon in your apartment. In that case you need to take approval from your landlord. The landlord has to take the permission from the RWA and if RWA allows for that then the landlord has the right to increase the rent. The person is also liable to pay commercial tax on that property.

• Visit the local municipal authority of your city.
• Apply an application to the municipal officer for the conversion of residential property into commercial property.
• Provide the details of your business such as company registration documents, company ID.
• Size of the business and nature of the property.
• Address of the property.
• Once your application is viewed the authorities will investigate your business.
• Your application approval will be in the hand of the Municipal commissioner if he/she finds that there is no harm to the other resident of that locality; only then your application will be taken forward for consideration.

The procedure for changing residential property to commercial property varies depending on the city. The procedure often entails modifying the property's zoning classification before securing the required permits for commercial use. The procedure of how to convert residential plot to commercial in Bangalore is reasonably straightforward here and can be finished in a few weeks. 

Now, coming back to your question:

Yes! You can. However, you will have to follow a few regional rules for the same.

How to convert residential property to commercial in Bangalore?

• The initial step for the conversion of residential property to commercial is to get in touch with the Bangalore Municipal Corporation and request a zoning modification. 

• The property must be surveyed, and the new zoning classification must be approved. 

• The next stage is to apply for a permit from the Bangalore Development Authority once the zoning has been granted. 

• With this permit, commercial buildings can be constructed on the property. 

• The last step is to apply for a trade licence with the city when permission has been received. The property may be used for business purposes with the help of this licence. 

Hope this helps!

Read More:

My brother wanted to convert his non-commercial property to commercial property. So, for that I had been gathering some information online. It was then that I came across the latest supreme court judgement on commercial use of residential property. According to the Supreme Court, if the owners of residential properties that are being used for commercial activities fail to provide the necessary paperwork or licences, those properties must be sealed within 48 hours.

The court noted that the Center's handling of giving advance information to the owner of a property being misused before sealing it amounted to a "non-cooperative" approach. Senior lawyers' recommendations that anyone using residential properties illegally for commercial purposes be requested to show their licence within 48 hours were taken into consideration. However, the premises would be sealed due to the illegal commercial use of residential property if the individuals are unable to provide any authorization or licence. 

They also suggested that an additional 48 hours could be given for this if the owner of the property that was misused provided an undertaking, which would be video recorded, that the misuse might stop and he or she would file an affidavit before the relevant authority that the same would not be misused. 

Renting residential property for commercial use

In some circumstances, renting a residential property for commercial purposes is feasible, but it necessitates careful study and respect for local laws. Getting the required licences, permissions, and approvals from local authorities may be necessary in order to convert a residential property into a business space. The viability of using a residential property for commercial purposes may also be impacted by zoning restrictions and homeowner association laws.

Take the supreme court judgement on commercial use of residential property into consideration before making any decision.

I believe after going through the previously-mentioned responses, it must be clear to you that the residential to commercial conversion is possible if permission is taken from the local authority.

Every state has a separate law regarding converting residential property to commercial; some states may only permit 30% of residential property to be used as commercial property, while others may permit 50%.

In Karnataka, the Commissioner of the Land Revenue Department approves land conversions. The revenue department is in charge of changing the land's use. Through the Bhoomi platform, users can apply online for a change of land use from residential to commercial in Karnataka. Obtaining consent from the responsible revenue authority, such as the Collector, SDO, or Tehsildar, is the first stage in land use conversion in Bangalore.

If you want to know how to convert residential property to commercial, then you can go through Vanshika’s answer. I entirely agree with the steps to convert residential to commercial property. 

The following paperwork must be submitted when you desire to convert residential to commercial one:

• A written application

• Business registration document

• Address proof

• Business ID

If you don't have a permit for residential to commercial conversion of property, you will be required to pay the fine. Different cities have different penalty fees.

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As a small business owner, I worry about the operational cost of basing my office in a new location. I had seen a few people running their businesses from their residential quarters. To cut down on my expenses, I asked a dear friend ‘can a residential property be used as commercial? 

She told me, “Yes, you can most definitely run your commercial business from your residential estate’. Though you will need to obtain a licence under the Shop and Establishment Act, enacted by your state. 

In Maharashtra, you will need to get approvals from the housing society for the same. Up to 30 percent of the area of your house can be commercially used but not more than that. 

Whereas, in Karnataka certain professionals such as chartered accountants, lawyers and doctors don't need permission to run their commercial businesses out of their homes. As their work involves intellectual exercise and not physical labour. Similarly, if you are conducting yoga classes or tuition classes from home, you don't need to take permission as their services don't fall under the ‘ purchase food' benefit.

Different states in India have created a set of rules and regulations wherein a residential property needs to be converted into commercial property for legal use. I would recommend, you check the rulebook of your housing society management to get legal permission regarding residential property for commercial use. You might need to submit a formal application to your residents’ welfare association (RWA). When all the necessary approvals have been attained, your property will be deemed as ‘ commercial’ in government records. You will need to pay property tax under the bracket of commercial property tax. 

If you gain any valuable information about ‘Can a residential property be used as commercial’, leave it in the comment section.  

Read more :

We all know that commercialising residential homes is a cost-effective and time-saving solution. This gives you the opportunity to work from home and make money. Opening a clinic in one of the rooms or a teaching centre from the comfort of your own home is not unlawful because these are not classified as commercial activities. However, there are a few things to keep in mind before starting commercial use of residential premises.

Commercial activity in residential premises:

Vanshika’s opinion is absolute to the point as it clarifies every little thing about property uses. The lease for a property will establish what limitations if any, it has. Before beginning a company in your home, read your lease agreement carefully. Whether there is an instant ban on business use or you only require your landlord's permission, it is critical to follow the lease's guidelines to prevent issues.

There may be certain limitations for change of use from residential to commercial. Several financial institutions may require you to obtain authorization or prohibit you from using the property as a company entirely. Before making any significant decisions, make sure you understand the conditions of your mortgage agreement. You wouldn't want to consider getting your loan cancelled and needing to pay it back.

Things to remember before converting the residential property to commercial property:

• Before launching your business or service, get approval from your property owners association or housing society and its members. This clears up any misunderstandings and provides you with support from your neighbours.

• Check if your client or customers are accessing common spaces like the parking area or other facilities.

• You should get official permission from the local corporation/municipal laws.

• Small firms, like small industries, encourage opportunities for advancement and lower product and service costs. 

• Your business should not disturb the peace or risk the security of the neighbourhood where you are staying.

This is what you should know about the commercial use of residential premises.