Supreme Court Judgement on Commercial Use of Residential Property

If you obtain permission from the local authority, you may use residential property as commercial real estate. Find out the process of going about this and other details. 

Saleha, an employee of a dentist, intends to convert her Vasai apartment into a clinic. Like Saleha, several other people are interested in actively leasing their residential property to businesses. It’s the norm in almost all cities due to the exorbitant rental prices. It reduces the cost of leasing or buying commercial real estate in addition to flight time and related expenses. 

Even though housing societies frequently oppose it, some areas are suitable for full commercial purposes in residential apartments. However, this area varies from state to state or even within a city. 

Residential and commercial properties have different characteristics. 

Let’s examine the distinction between residential and commercial real estate: 

  • Residential Property or Zone: A residential zone is a location with residential properties like apartments, plots, standalone homes, and floor apartments. Hotels or motels may exist in such areas, but no retail stores. 
  • Commercial Property or Zone: A commercial zone is a region that includes shopping centers, businesses, office buildings, lodging facilities, nightclubs, and restaurants, among other things. The Commercial Zone Act, which specifies which commercial activities are allowed in which zones, is in charge of this zone. Near places of worship like churches, mosques, and temples, for instance, certain commercial activities are forbidden. 

Is it possible to use a residential property for business purposes?

You can use a residential property for business with the necessary authorization. Every state has a different law regarding this; some states may only permit 30% of residential property to be used as commercial property, while others may allow 50%. Let us see what the law says. 

Let’s establish who is eligible to use residential property for commercial purposes. “Services by resident advocates, CAs, Lawyers, and Doctors are some of the approved commercial activities in any residential area,” a legal expert from MB states while dwelling on the same. Tutorials, dance, and yoga classes are also permitted to use the space. 

Is there a specific clause for this, then? “There is no specific provision for conversion of the use of an apartment from residential to commercial,” says Asha Basy, a partner at S Jalan & Company. You may use the apartment for business purposes, but such use shall be professional and shall not produce or manufacture any goods. Additionally, it should not bother other members of the community. 

However, the housing society must first grant the necessary approvals. Depending on the type of business, Basu says it might also be essential to obtain permission from the local municipal authorities to turn the flat into a commercial establishment. The landlord’s no-objection statement is necessary for tenants in addition to the usual approvals. 

What does the law say about converting residential property to commercial property?

Zoning law is a regulation that directs the transformation of residential property into commercial property. A piece of legislation that designates specific land use zones, either forbidding or allowing it. The law aims to safeguard against the detrimental effects of business operations. They try to keep the two distinct (commercial and residential). Residential, commercial, industrial, commercial, industrial, rural, combination zoning, agricultural zones, historic zones, and aesthetic zoning are just a few of the different zoning types. 

How does a residential property become a commercial property? 

A residential property’s transformation into a commercial property can take a long time. It is necessary to take all steps before starting commercial activities on residential property, regardless of how long it takes. It may lead to a penalty if you do not. This blog will walk you through turning a residential property into a commercial one. 

  • As a first step, go to the municipal authority in your city. You should visit the Delhi Municipal Corporation if you reside in Delhi. 
  • Step two is to submit a written application to the municipal officer to convert. It would be beneficial if you explained why you want to convert. 
  • Step three is to include the necessary paperwork for registering your business. Include additional pertinent information, such as the size of the company, its address, and the type of property. 
  • Step 4: The authorities will look into the company; if they discover no damage to the neighborhood or environment, they will only grant the company a license. 

Maha lawmaker lauds SC order on Campa Cola Society

capMumbai: Maharashtra State Assembly legislator Vinod Tawde lauded the Supreme Court of India’s verdict to say the demolition of illegal flats in Campa Cola Housing Society, South Mumbai, till May 31, 2014.

The state government is trying to act like a dictator and trying to save it self, added the legislator.

The NCP leader Tariq Anwar also welcomes the order and said the innocent public is suffering in the political ties in the country and also called for formulating proper rules to prevent such heinous acts.

There must be new construction rules need to be added and rules to be taken care off so that the innocent people might not suffer, the minister added.

Another NCP leader DP Tripathi said there should be a balance solution and the issue should be resolve through talks between the Govt and the residents.

The views of the regulatory class came after the apex court stayed the demolition of illegal flats, after taking notice from several media reports.

After the verdict came scenes of euphoria and bursting of fire crackers seen in the premises of Campa Cola.  Before the order, the the Brihanmumbai Municipal Corporation(BMC) officials bulldozed its way inside the compound by breaking open the gate to gain access as the residents tried to block the entrance.

The apex court ordered officials of civic body not to go ahead with the demolition till May 31, 2014.

Residents were completely raging in anger and pleading for help, when the apex court verdict came as a relief for them.

With the pressure increasing on the State Government, CM Prithviraj Chavan sought legal help from the attorney general to save the homes.

The residents have declined to move out of the compound even as the deadline given by the Supreme Court to vacate the flats has ended.

The civic body decided to bring down 35 illegal floors in the seven high-rises in the compound after the Supreme Court refused to regularize them.

Supreme Court Halts Proceedings On Saharas’ Pleas

After hearing the request of the Securities and Exchange Board of India; the Supreme Court has asked SAT and Allahabad HC to halt all proceedings on the pleas filed by Sahara firms.

The Supreme Court, after hearing the request filed by Securities and Exchange Board of India, halted Allahabad High Court and the Securities Appellate Tribunal from hearing all the pleas filed by SHIC, SIREC and Subrata Roy. Continue reading

SEBI asks for SC hearing on all Sahara Cases

Securities and Exchange Board of India- SEBI, in a new petition requested Supreme Court to hear all cases against the Sahara firms and its chief.

Filing a new petition, Securities and Exchange Board of India– SEBI asked the Supreme Court to hear all the cases against the two Sahara Firms and its chief. Continue reading

Sahara Firms, Roy asked to reply SEBI within a week

The Supreme Court on Monday asked Subrata Roy Sahara and two Sahara firms to reply to the contempt petition filed by SEBI.

On Monday, Supreme Court gave one week time to both Sahara firms and Subrata Roy for replying to the contempt petition filed by Securities and Exchange Board of India. Continue reading

SEBI Wants Sahara Chief’s Arrest, Asks for SC’s Permission

Securities & Exchange Board of India, SEBI the market regulator, asked the Supreme Court of permission to arrest Subrata Roy, the chief of Sahara Group of companies.

SEBI demands the arrest of Subrata Roy, the chief of Sahara.

SEBI demands the arrest of Subrata Roy, the chief of Sahara.

SEBI has decided to go harsh against the Sahara Group of companies. This was all the more clear with their appeal to the Apex court for permission to arrest the Sahara Chief. SEBI has demanded the arrest of Subrata Roy Sahara.

Along with the Sahara Chief, other two directors like Ravi Shankar Dubey and Ashok Roy Choudhary also are likely to be arrested soon, if the Supreme Court permits the market regulator; for their failure to comply with the SC order, given on August 31 last year.

As per the August 31 order, two Sahara Group firms– Sahara Housing Investment Corp and Sahara India Real Estate Corp were ordered to pay a fine of over Rs.24000 Cr to the investors. The fund was raised through OFCDs.

However, the apex court; finding some illegality in the list of investors, asked these firms to pay off the fund with the market regulator. The order further had empowered SEBI to seize the properties of the firms, in case of failure from their part to pay the amount in time. Continue reading

Sahara Group in Deep Troubles: Delhi-Based Investor Moves SC

Leading Sahara group in to more trouble, a Delhi-based investor approached the Supreme Court last day. He requested the SC to give directions to redeem his investments.

Sahara to face more troubles

Sahara to face more troubles

Requesting Supreme Court to give directions to redeem his investments; the petitioner claimed that he is one of the real OFCD investors in the Sahara List, a Delhi-based investor approached SC. The petitioner claimed that he had invested in one of the Sahara group companies.

He requested the Apex court to direct the Sahara group firms – Sahara India Real Estate Corp (SIRECL) and Sahara Housing Investment Corp (SHICL) to pay back his due.

Though there were around 3Crore investors as per the list produced by Sahara before the SC and SEBI, this is the first time one of the investors came up against the firms. However finding some dubious facts in the investors’ list, SC had ordered the subsidiary firms of Sahara to refund over Rs.24000 Cr to the investors as a fine. Continue reading

Supreme Court Discards Sahara’s Appeal To Review

Supreme Court discarded Sahara’s appeal to have a review on the refund – case. Supreme Court finding no valuable reasons for a review, dismissed the appeal.

Supreme Court discards Sahara's appeal

Supreme Court discards Sahara’s appeal

Sahara’s appeal, against the SC verdict which orders Sahara firms to refund nearly Rs.25,000 Cr to its investors, was turned down by the Supreme Court of India.

Two subsidiary firms of Sahara- Sahara Housing Investment Corporation Ltd (SHICL) as well as Sahara India Real Estate Corporation Ltd (SIRECL) were fined Rs.24000 Cr as they were found guilty of amassing investments. The SC had found that many of the investors’ details lacked clarity.

Being suspicious over their investors’ details the SC had asked the Sahara- firms to pay the fine. Later Sahara claimed that they had already repaid their investors. Continue reading

Real Estate Investors Are Already Refunded: Claim Sahara

Real estate investors are already refunded, claimed Sahara firms. Subrata Roy, the chairman of Sahara groups, claimed that Sahara real estate firms have already refunded the amount.

Sahara Claims to have refunded the real estate investors.

Sahara Claims that they have refunded their OFCD  real estate investors.

A December 9 advertisement showed that both Sahara firms – Sahara India Real Estate and Sahara Housing Investment – have paid SEBI Rs.2,620 Cr. The real estate firms have paid an additional Rs.2500 Cr as well in defense in form of buffer amount.

Last week Supreme Court has granted more time to both Sahara group firms to refund. The SC has given 3 months’ time to refund. As per the SC order the Sahara real estate firms are to pay the entire amount back in two installments. They are given the time up to February first week. Continue reading

Sahara Real Estate Firms Granted More Time to Refund

Supreme Court granted some more time to Sahara to pay off the fine. SC asked SEBI, the market regulator of Securities and Exchange, to accept the extension application of Sahara Real Estate Firms.

Dance time comes back to Sahara

Dance time comes back to Sahara

Sahara Real Estate Firms finally had some breath of relaxation. Accepting Sahara’s plea, SC asked SEBI to accept their application for more time to pay off the amount.

Sahara Real Estate Firms were ordered to refund the money collected through debentures. Nearly 3-Crore investors are said to have investment in these firms. Continue reading

Delhi Government comes up with Fresh Directive on Sale of Properties

Government of Delhi issued a fresh directive to the revenue department asking it to allow sale and purchase of immovable properties only through proper sale and not allow any such transactions by way of General Power of Attorney.

The direction issued by Divisional Commissioner Vijay Dev came as registration of properties at 13 sub-registrar offices across the city had slowed down drastically due to confusion on the issue following issuance of an advisory last month by the government clamping down on property transaction through GPA. “In today’s direction, the government has asked all concerned officials to strictly comply with the Supreme Court order on the issue. The order has been issued to remove the confusion,” said an official.

The government had put restrictions on GPA as a mode of property transfer following the apex court order on October 12 last year but such transactions had been taking place despite the order, prompting the government to issue the advisory. Following the advisory, registration of properties has come down at the sub-registrar offices.

The Supreme Court had on October 12 last year ruled that sale transactions carried out in the name of GPA will have no legal sanctity and immovable property can be sold or transferred only through registered deeds.

Hopes Revive for Housing , Infra Projects in Patwari

With the Supreme Court on Wednesday dismissing as withdrawn a special leave petition (SLP) filed by a group of Patwari farmers ,who challenged the Government ‘s move to work out an out of court settlement with farmers , The greater noida industrial development authority (GNIDA) is confident that the crises in Patwari will be resolved soon. There’s relief for 20,000 homebuyers who have booked flats in projects coming up in Noida Extention’s paywari village.

The Dismissal of the SLP and the indications that the Allahabad high court will begin hearing the Noida and Greater Noida land acquisition cases only after two weeks have allowed the government more time to make more and more Patwari farmers fall in line.
Not only homebuyers but projects like Metro line which is proposed from Noida to Greater Noida road (140 Metre wide, 28 Kms long) , a Greater Noida – Ghaziabad road (60 Metre wide , 22 Kms Long) will also get a new lease if life.
The authority had allotted 3,000 residential plots to people , plus there are number of corporate offices , besides schools and other institutions in that area. A section of farmers in Patwari , where the state government on August 6 struck a higher compensation deal to revive real estate projects , had moved the Supreme Court against the arrangement. Greater Noida chief executive officer Rama Raman termed the SC order “a positive sign”.
A two judge bench of the same court on July 19 quashed forcible acquition of 589 hectares of land in Patwari. But another two judge bench of the same court , while hearing some remaining petitions from Patwari on July 26 , referred the matter to the higher bench for hearing. The court also allowed the contesting parties time till August 12 for the settlement.
Farmer Layer Mr Parminder Bhati said “our contentions was when the HC had quashed acquition in Patwari village , the remaining petitions should have got the same relief. In the name of out of court settlements , government, officials and its heavy weight politicians have been putting pressure on farmers”
Farmers also claimed the court’s stand on Wednesday as victory for them. Ranveer Pradhan a farmer said “we thought we might not get back our land.but the court has approved of the july 19 verdict of the high court”.”The court has said the July 19 verdict was in favour of farmers and assured if the high court’s higher bench ruled against the interest of farmers they can move the Supreme Court.” Said Bhati.

Buyers of Houses in Noida Extension on Roads for Full Refund.

The buyers who had invested their money in houses which were to be constructed in Noida extension have come out over the roads to plea the Supreme court for their justice. The builders who have been affected with SC’s decision are refunding money to buyers but after certain deductions. The buyers are the most affected ones because of this decision.

The buyers have moved on to the roads to demand justice for the same. They are requesting the Supreme court to make a statement to builders to refund their entire money without any deductions. The builders have intimated the buyers that if they want to take back their money for their properties those are booked in Noida extension then they will have to bear some charges, for which the buyers disagree. These deduction means approximately 2 lakhs of the amount would be treated as cancellation penalty for a flat. So, the buyers are demanding justice from the Supreme Court.

SC’s Decision About Noida Extension Land Deals Broke Buyers’ Dreams

The Investors and the buyers are in panic after the decision of Supreme Court came up, of upheld the Allahabad High Court judgement. They are under huge shock as the judgment had rejected the possession of over 156 hectors of land for developing a township in Greater Noida or can say Noida Extension. Supreme Court’s judgment jointly comprising of Justice  G.S. Singhvi and Justice A.K. Ganguly has given a set back to Mayawati’s government and the builders.

About 6,000  buyers have been affected by the judgment of the reverse of the projects and the developers will take steps to compensate the buyers by shifting them to other projects or by refunding them the money. However, buyers are in a complete state of panic as developers are very sure of themselves as they say their projects are safe. For instance, Mr. Pandey booked a house in November 2010, in Mahagun Mywoods project. The developers are sure their project is very much safe but the buyer wants his money back but the developer says if they cancel the booking, 10% of the booking amount will be levied as cancelation penalty. This would be approximately INR 2 Lakhs. Other buyers too have similar opinions.