Checklist for Buying Commercial Property in 2025 | Legal Docs Explained

Investing in a commercial property is a significant financial investment, whether you're planning to use it for your own business or to generate rental income. While paperwork may seem complicated and time-consuming, a thorough documentation review will protect your investment and prevent future complications.

For both new developments and resale properties, proper verification ensures smooth registration and helps avoid potential disputes. If you are planning on taking out a loan, your financing options will also widen. The time you invest in a proper documentation review today will safeguard your valuable asset for the future.

Every property is unique, and so are the set of documents that you need. Today, in this blog, we will explore the vital documents and methods of due diligence to ensure your investment is safe. 

Who owns the property?

The first objective is to verify the legality of a property. The following documents are required to purchase a commercial property:

Sale Deed

A sale deed is an agreement between a buyer and a seller that states the terms and conditions of a property transfer. 

If you are buying a resale property, a sale deed will be able to establish a proof of sale between the current and previous owner. You will also be able to check the terms and conditions of the sale. This  is the most important paperwork you need to verify when buying a property. 

Title deed

This document helps establish the current ownership situation and whether the present owner has the right to sell you this property. You should always cross-check the ownership details mentioned in the property records and match the seller’s information. The title deed serves a similar purpose to the sale deed in this situation but not in every case. Read the following blog to understand difference between a title deed and a sale deed.

Mother Deed

The Mother Deed lists all the previous owners of a property and traces the entire ownership history. The current owner should also be listed in this parent document. In case any information is missing, you can get a certified copy from the registration office. This information will help safeguard your clear title and avoid future legal claims on the property.

Encumbrance Certificate (EC)

This certificate is a standard legal document in the property buying procedure. It indicates that there are no outstanding dues or legal liabilities like loans, mortgages, legal disputes, and tax payments. It ensures that no such liability is transferred to you and that your property rights are not affected. The sub-registrar issues this certificate.

NA Status or a Conversion Order

Check if the land holds Non-Agricultural (NA) Status. But if the land is used for agricultural purposes, make sure to issue a conversion order to ensure that you can use the property for commercial purposes.

Index Copy

This government-issued document contains the property's complete registration details, including current ownership, transaction history, and exact location specifications. For commercial properties in India, it verifies the chain of property transfers and confirms legal ownership. Available from the sub-registrar's office, it's essential for confirming legitimate ownership before purchase.

Clear Title Certificate

Issued by legal professionals after thorough verification, this certificate confirms the property has no ownership disputes, legal claims, or encumbrances. For commercial properties in India, it protects buyers from inheriting litigation or ownership contests. This document is particularly crucial in urban commercial zones where property disputes are common and significantly impacts financing options from Indian banks.

Verify the Builder's Compliance

RERA Registration (for new properties)

The Real Estate Regulatory Authority issues a RERA number to approved projects. You can cross-check this number online.

This registration is mandatory for developers before advertising, marketing, or selling a real estate project. This procedure helps buyers like you to verify the developers' compliance with the RERA guidelines and ensures transparency. You will also be compensated in case of delays.

Building Plan Approval

The building plan is a sanctioned layout plan that is followed to construct the property. It is approved by the local municipal authority. The plan ensures that the building meets the approved clearance for commercial use and safety standards. This will safeguard your property from violations and future demolition.

Possession Certificate

The possession certificate is issued by the builder only to the first owner. The document is handed over to the new owners when a resale happens. Only when you have this certificate can you establish that the property is free from encroachment and that you can legally occupy it.

Fire Safety Certificate

A fire safety certificate confirms that all fire safety regulations were complied with. This is especially issued in the case of commercial properties to safeguard the high volumes of people who will occupy or use the space daily.

Completion Certificate (CC) and Occupancy Certificate (OC)

1. The completion certificate (CC) is issued first and confirms the building was constructed according to approved plans. 

2. Occupancy Certificate (OC) certifies the property is safe and ready to live in.

Both are required otherwise, you will be illegally occupying it. The banks also require these documents before they issue loans.

Zoning Regulations

If you are planning to start a certain business, make sure that the activity does not violate the zoning regulations. You can find this information on the CERSAI website.

Developer's Land Ownership Document

The 7/12 extract is a land record that proves the legitimacy of the developer’s claim over the property and their ability to sell it. It contains the survey number, area details, and encumbrance information.

Building Usage (BU) Permission

The Building Usage Permission is mandatory for the developer to ensure legal occupancy and construction of a property. It also confirms the property meets safety and infrastructure requirements.

Additional Documents 

Property Assessment Extract: Official valuation document for tax purposes (Shows property classification, size, and municipal assessed value)

PID Number: Unique property identification code in municipal records (Confirms official registration and helps verify exact property boundaries)

City Survey Sketches: Technical boundary drawings with measurements (Reveals access rights, potential encroachments, and relationship to neighboring properties)

Receipts of Updated Tax Payments: Proof of paid municipal taxes and charges (Protects buyer from inheriting previous owner's tax liabilities)

Foundation Certificate: Structural integrity certification for the building (Critical for older properties to ensure long-term safety and stability)

How to verify property documents before buying?

You can approach the registration office and the local municipality for these documents. The official websites for RERA verification and zoning regulations are helpful, too. The best advice is to contact a professional in case of any confusion.

Aside from the above-mentioned paperwork, basic identity proofs and signatures should be crosschecked for authenticity. Whether you are buying a resale or fresh property, you have to verify which documents are required in each of your unique cases and proceed accordingly.

Conclusion

With the rising cases of fraud and violations by builders and owners, you have to safeguard your investment. Follow a systematic approach: first verify ownership documents, then check building compliance certificates, and finally confirm usage permissions align with your business needs. Take professional help and verify each document carefully. This will help you save a lot of money in the future and avoid fines and delays.