Property Due Diligence - Restrictions on Property Use

Explainer Sep 16, 2022

Property due diligence is the process of investigating facts related to a given property, including ownership history, and obligations or encumbrances the property may be under.

It is essential to carry out adequate due diligence of a property before you make a purchase, so as to avoid unforeseen issues - legal or otherwise after the purchase has been complete.

As part of this process, it is essential to consider whether the property you are planning to purchase is under use as directed, as there are legal implications for making improper use of the property in question.

To illustrate with an example, an agricultural property cannot be used for residential or commercial usage, and vice versa, without obtaining a conversion certificate.

What Categories is Property Usage Generally Divided Into?

Property usage is generally divided into the following categories:

  • Agricultural
  • Commercial
  • Residential
  • Residential cum Commercial

In order to check what category the property you are planning to purchase falls under, you would have to check with the local authority (such as the Municipality) in your area.

If you plan on using the property for a use other than the one it is demarcated for, you would have to apply for a conversion/change of land use certificate.

At TEAL, we are building the next generation of property due diligence using big data analytics and machine learning. We provide reliable information about property ownership, registration status, disputes, tax compliance history and all other information that you will need to make a safe and secure property investment. To learn how TEAL can help you in your journey, get in touch with us.

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