• Guidance for giving residential property for commercial usage

Type of Property: Private Bungalow.
Intent: Letting out the property to a restaurant for acquiring rent.

Details :
1.) My property comes under R1 Zone. 
2.) It was purchased in 1957.
3.) Total Area of the Property is 1459 sq.yd with built up 5500 square yard. 

Questions :

1.) If I'm paying commercial property tax, does that mean my property is commercial? 

2.) What is change of user from residential to commercial and how to apply for one? 

3.) What license do i require as a landlord to give my premise on rent to a restaurant?

4.) Do I have to pay to any government body for using my residential area for commercial activity?

5.) What are the essential documents required for applying for FL 3 licence and any other required license?

6.) Can i give the whole ground floor (3500 sq ft carpet area + 1000 sq ft outside area) for renting purposes to a restaurant?

7.) As per the new alcohol rules, how much parking space do i need to show as per the details given above?

8.) What is the cost of changing user from residential to commercial?

Hoping for a reply soon. 

Thank you.
Sk.
Asked 7 years ago in Property Law
Religion: Hindu

First answer received in 30 minutes.

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5 Answers

1) you have to apply to muncipal corporation for change of your bungalow from residential to commercial

2) you will be assessed to property tax , electricity , water as commercial user

Shops & Establishment Certificate

2. BMC Health License (to serve food)

3. BMC Health Madira License (to serve Liquor)

4. Maharashtra License under Food and Drug control Act, Govt. of India

5. Grading Certificate namely, I, II or III

6. Weather Frame / Chapra / Sign Board License of BMC under License Department

7. Medical/Health Certificate of the Kitchen Staff on yearly basis (Especially of Food Handlers)

8. Grinding Stone Or Heavy Machine operating permission from BMC

9. Water Connection Certificate as per Grade.

10. Drainage Inspection Certificate once in two years

11. Neon-Sign Board Or Glow Sign Board License-provided it carries any advertisement

12. BMC: Pollution Clearance Certificate-from Environment Department, Worli.

13. Maharashtra State’s Weights & Measurement Department Certificate and its approval every year as per the M.W. & M Act, 1976, 1977, 1985 Amendment Act, 1987 and MRP.

14. BMC-Rationing Permission to obtain food grains like Rava, Maida, Atta, Rice, Sugar etc.,

15. ESIC Registration for the shop employing more than ten staffs under Govt. of India ESIC Rule 50.51 and 1952.

16. Provident Fund Registration, if number of employees is more than twenty.

& Establishment Certificate

2. BMC Health License (to serve food)

3. BMC Health Madira License (to serve Liquor)

4. Maharashtra License under Food and Drug control Act, Govt. of India

5. Grading Certificate namely, I, II or III

6. Weather Frame / Chapra / Sign Board License of BMC under License Department

7. Medical/Health Certificate of the Kitchen Staff on yearly basis (Especially of Food Handlers)

8. Grinding Stone Or Heavy Machine operating permission from BMC

9. Water Connection Certificate as per Grade.

10. Drainage Inspection Certificate once in two years

11. Neon-Sign Board Or Glow Sign Board License-provided it carries any advertisement

12. BMC: Pollution Clearance Certificate-from Environment Department, Worli.

13. Maharashtra State’s Weights & Measurement Department Certificate and its approval every year as per the M.W. & M Act, 1976, 1977, 1985 Amendment Act, 1987 and MRP.

14. BMC-Rationing Permission to obtain food grains like Rava, Maida, Atta, Rice, Sugar etc.,

15. ESIC Registration for the shop employing more than ten staffs under Govt. of India ESIC Rule 50.51 and 1952.

16. Provident Fund Registration, if number of employees is more than twenty.

Register of working staff on daily basis and temporary basis for the inspection.

18. Professional Tax Registration of Employees.

19. Professional Tax Registration for Employer. Certificate of Registration under Sub Sec. 1 of Sec 5 MAH/L Tax on Profession, Trade and Employment Act, 1975.

20. Permission from Electric Supply Companies to operate heavy machine like Air- Conditioners, Cooling Plant, M/C, Grinding M/C etc., (Department PWP)

21. Permission to operate more than two cylinder of gas at a time from BMC, Health Department.

22. Permission & Certificate from CFO from fire department to operate more than two gas cylinders in hotel premises.

23. Insurance of entire shop (Hotel) against natural calamities, fire, theft, robbery or any other damages (Not mandatory but advisable to do).

24. Maintenance of Payment Register as per Bonus Act a & B 1965 (Annual Returns in Form-D)

25. Police Registration Certificate

26. License to keep place of Public Entertainment-by Bombay Police Act, 1951

27. Sales Tax Registration Certificate under Bombay Sales Tax under Sec. 22/22A- 1059.

28. Sales Tax Registration Certificate for Permit Room on Monthly Return basis Bombay Sales Tax Act, 1998.

29. PNR for the said Hotel Or Restaurant Business from Income Tax Department

30. The Indian Performing Rights Society Ltd., Govt. of India. Copy Right Office Department of Education Form II D (See Rule 14B 1952)

31. PPL (Phonographic Performance License) for sound recorded music, Royalty to the singer etc., u/s. 33 (B) of CRA 1957

32. Bank Guarantee Certificate for opening new Permit Room in said Hotel, equivalent to the existing license fee on the date of issue.

33. Nokarnama of each Employee’s Certificate with photograph. Form F.L.XIV Rule 22 (2) 49 40

Ajay Sethi
Advocate, Mumbai
94719 Answers
7532 Consultations

5.0 on 5.0

1.The tax paid does not defne the type of property it is.

2. To change into commercial you will have to apply in the municipal office in a prescibed format.

3.you can either make a rent agreement that is also called as leave and licensence agreement or a lease agreement depending on the terms and no of years of the deal.

4.y ou canot use it or Lent it out without converting into commercial,so in order to lend it out for commercial purposes first get the residential into commercial

5 details of property ,copy of sale agreement/deed,tax paid receipts your details and I'd proofs ,are needed

6.yes you can rent out the whole area belongs to you for commercial purpose

7.parking space is needed to be provided under the existing law.

8The cost of converting into commercial is mostly to the officers for getting the work done depending on the area,no of years the fee will be different

Thresiamma G. Mathew
Advocate, Mumbai
1642 Answers
212 Consultations

5.0 on 5.0

Restaurants also need to show that they have adequate space for car parking's — a 80 sq feet restaurant needs one car park — for a licence. “

2) in your case if you have 4500 square feet area for restaurant you would need at least 55 car parking space

3) as far as charges for conversion from residential to commercial use is concerned in Mumbai is concerned you have to make inquires with BMC

Ajay Sethi
Advocate, Mumbai
94719 Answers
7532 Consultations

5.0 on 5.0

1. Yes.

2. You have to apply to the municipality for change of user nature.

3. If you are the title holder of the property then you do not require any license to lease the property.

4. The conversion charges are to be paid when the property is converted from residential to commercial, but no charges can be levied for leasing a residential property for commercial use.

5. You may rent out your entire property.

6. Only a local lawyer who is well versed with local laws and rules can tell the conversion charges and the parking space required to be provided.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

1. It is clear from your statement that you are paying the taxes applicable at commercial rate hence the property shall come under commercial.

2. It is already assessed as commercial property only hence you need not apply for conversion from residential to commercial. again

3. The tenant who is intending to run a restaurant business shall apply for proper licence from the authorities competent to issue the same. You need not bother about it.

4. For all the commercial activities that are being carried out in the premises, the tenant shall pay them to the authorities.

5. You will be given with the list of documents that are to be submitted for the purpose.

6. It depends on the rental/lease agreement that you are proposing to enter into.

7. This is the responsibility of the liquor vendor and not the owner of the building.

8. Local law involved in this hence it may be clarified from the municipal authorities.

T Kalaiselvan
Advocate, Vellore
84920 Answers
2195 Consultations

5.0 on 5.0

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